Choice and the impact of changes to Sunday premiums in the Australian retail and hospitality industries

Abstract

We assess the effects of reductions in wage premiums (‘penalty rates’) for Sunday work and some of the ideas underpinning them, first by reference to evidence from official and other quantitative data about its likely impact, and second by reference to qualitative data concerning the nature of the choices available to Sunday workers in those industries. We investigate who retail and hospitality employees are (e.g. are they mostly students who can ‘afford’ a cut in penalty rates?). We then find significant and widespread income losses arising from cuts to penalty rates, even after allowing for contested employment gains, though we cannot quantify all possibilities, such as the potential effects of ‘loaded rates’ (though if implemented these would intensify losses for people working public holidays or Sundays). Many workers in retail and hospitality were under financial pressure, had little ‘control’ or found Sunday work difficult, but some were concerned about the effects of refusing Sunday work. Our study has implications for the meaning of ‘choice’ and contributes to understanding uncertainty regarding labour supply behaviour amongst low-income workers.