Penalty Rate Cuts Are Class War; It’s Time For Students to Push Back

By Emily Strange

The recent decision from the “Fair” Work Commission to slash penalty rates in retail, fast food, hospitality and pharmacy industries has been met with widespread disapproval, and rightly so.

Workers who get penalty rates stand to lose up to 20% of their income in the biggest wage cut since The Great Depression, when the Basic Wage was slashed by 10% in 1931.

The broader context paints a stark picture.

Wage growth is at 1.9% (inflation is at 1.5%). Wages have not grown in real terms since the 70s. Fake debts of thousands of dollars are being delivered to Centrelink recipients and are being aggressively collected on. Meanwhile, the Australian economy has been growing for 25 years, and is closing on a world record for the longest period of economic growth since records were kept. Corporate profits are up 20.1% in the final quarter of 2016. Given this environment, is it any wonder that 80% of people oppose the cuts to penalty rates, and 60% think penalty rates should be increased?


And this isn’t the first cut. On May 14 2014, the “Fair” Work Commission cut Sunday penalty rates for hospitality workers by 25%. This decision is estimated to have put $112 million into the pockets of restaurant and cafe owners.

Mary*, an international student at UNSW, is one of hundreds of thousands to be affected by the cuts. She works in hospitality, and penalty rates cover her rent. She can’t work more than 20 hours a week because of her visa requirements, and with a full-time load of four subjects and volunteering commitments to help secure a job in future, she doesn’t have the time to work more, even if she could. The cuts mean that she won’t be able to save to go home to see her family this year.

Denise*, a first year at UNSW, still lives at home. Travel to uni can take up to two hours. She works at a grocer on Sundays and is trying to save to be able to move out. She’s at uni studying everyday for her full-time course load. Penalty rate cuts mean that she won’t be able to move out until her degree is finished.

These stories, and hundreds of others, have come out since the decision was announced, all describing various ways in which the cuts squeeze them and often their families.

Incidentally, the Justice making the decision won’t be affected at all by the cuts. Justice Iain Ross sits on a cool $500,000 per year. Neither will any parliamentarian, with a base salary of $199,000, plus cosy expenses accounts that they all make use of as much as possible (think Bronwyn “Helicopter” Bishop, or Sussan “Investment Property” Ley). Nor will the cafe, restaurant or bar owners who benefit from these cuts (including such corporations as Maccas, Woolies, Coles etc).

It’s the Haves who benefit, and the Have-Nots who don’t. It’s that fundamental class division in society. If you’re in the Haves, you’re set for life – just inherit a mine (Gina Rinehart) or a property portfolio and a small loan worth a couple of million dollars (Donald Trump).

However, getting a better deal as a Have-Not is a more complicated prospect.

It’s not a simple matter of convincing the right people to change things. The system is working just fine for them, and the divide has been growing for years; there’s no reason for them to stop now. It takes a concerted fight back in order for Have-Nots to demand a better deal, and it’s not something that can be done on an individual basis. Individuals can be intimidated, fired or alienated. Cooperation in struggle, however, is a different matter. It’s the fundamental basis of the trade union – cooperation and collaboration amongst the Have-Nots in order to resist such attacks on people’s livelihoods.

The reason that the Haves are having such an easy time cutting isn’t because people agree with them, it’s because there hasn’t been a serious, organised, large-scale fight for wages and conditions since the 70s. It’s not going to turn around in an instant, but it has to start somewhere, and with 80% of the population on our side, there are few better places to start a fight back.

The first step? Joining your union. Divide and conquer is a common tactic of the Haves to keep the Have-Nots in their place, but it has a logical corollary: unite and liberate.

*names changed for privacy reasons