Cutting penalty rates was supposed to create jobs. It hasn’t, and here’s why not

After three years of submissions, hearings and deliberations, Australia’s workplace relations umpire, the Fair Work Commission, decided in 2017 to decrease the penalty rates paid to retail and hospitality workers on the safety-net award for working on Sundays and public holidays. For years employer groups had argued that high penalty rates (up to double standard pay) were an unaffordable anachronism in the modern economy, and the commission essentially agreed. In particular, it concluded the evidence was that cutting penalty rates (by between a quarter and a half) would lead to more trading hours and services on offer on Sundays and public holidays, “and an increase in overall hours worked”. In other words, reducing penalty rates would create more jobs. Two years on, with cuts to public holiday penalty rates fully implemented and Sundays partially implemented (being introduced over three to four years) how many extra jobs have been created? Our research suggests basically none.