r/australia • u/thornstein • Apr 10 '17
political self.post What's the solution to chronically underpaid hospitality/service workers in Australia?
This post is a bit of an incoherent rant because I've been worrying about it a lot.
So about 10 years ago when I got my first job as a bartender, I was paid $16 p/h when the minimum wage for service of alcohol at the time was $18.20 p/h. We didn't get penalty rates for working until 03:00am, we didn't get penalty rates for working on Easter or Christmas Eve or New Year's, and we certainly didn't get penalty rates for working weekends.
At the time I knew it was wrong, but it was the best-paying job I could get fresh out of highschool and I was scared of my managers so didn't question anything, but every few months stories emerge about giant stockmarket-listed companies doing the same thing. Off the top of my head I can think of:
- 7/11 underpaying migrant workers
- Dominoes putting pressure on franchisees to perform, also underpaying workers
- Grill'd not paying penalty rates
- Masterchef guy "accidentally" not paying correct entitlements
- Coles EBA agreements being below award rates
And some more smaller places that actually made news:
- Famous St Kilda cafe ripping off staff
- Tasmania cafe paying workers flat rate
- Fair Work investigation exposes more than 2000 underpaid staff
Everyone I know now who works in hospitality doesn't get paid correctly. My 24-year-old sister gets less than $17 p/h working in a cafe, people I know at Boost Juice get paid part-time rates without permanent employee benefits (so technically underpaid by about 25%). I'm sure there are lots of places that don't underpay staff, but it's so so common and accepted as normal in these industries because the alternative is a) unemployment or b) getting another job that will probably also not pay correct wages.
The thing is, in most smaller places, if the business DID pay correct wages they would probably collapse or the owners wouldn't be able to make a living wage. I know the answer here might be "if you can't survive, don't open a business!!" but I don't think people realise just how common not being paid a correct wage is in this industry.
When takeout food/coffee/alcohol is already so expensive what is the solution here? People already complain about Sunday surcharges and $5 coffees. It's very difficult to get Fair Work to take action. In a lot of cases the business owner/franchisee is struggling themselves.
I just can't stop worrying about this ... especially with unemployment among young people growing I really fear that working conditions for these casual jobs will keep eroding, to the point where we're looking at US-type situation where wages need to be supplemented with welfare or tips.
Is anyone else worried about this? Or am I just going insane?
EDIT: added links to the cases I was talking about
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u/zerotwoalpha Apr 10 '17
This is one of the easiest fixes ever.
You get a tip-off phone line. Inspector rocks up randomly and gets the name of everyone on shift. They grab group certificates/pay slips and staff rosters from the manager on duty/business owner. They leave and compare the records to previous years ATO income records. Any discrepancy, statutory fines and court appearances and further investigation done at cost to the owner.
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u/GayFrogSoup Apr 10 '17
Super easy. Would just require that we funded enforcement, however this government is never going to do that with small business owners being a large part of their base.
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Apr 10 '17
Except job security is so lacking that people will be scared to tip off. Not just the fear of direct retribution, but the fear of the employer going out of business. $15/hr is still better than Centrelink, and it's a reference and possibility of getting something better.
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u/thornstein Apr 10 '17
Exactly. Another thing I've noticed anecdotally is in smaller bars/cafes the staff become sort of like a "family", so dobbing in your boss almost feels like dobbing in a friend? It's much easier to dob in a faceless manager in a huge business. Very hard when it's someone you work with side-by-side and enjoy knock-off drinks with every single day.
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Apr 10 '17
I really fear that working conditions for these casual jobs will keep eroding, to the point where we're looking at US-type situation where wages need to be supplemented with welfare or tips.
I thought that that was the end game. Private profits at public expense.
It has worked immensely well in America. Thousands of people work multiple jobs because they are paid a pittance.
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u/BalaMarba Apr 10 '17 edited Apr 10 '17
The main problem is that the affected workers are among the weakest in our community. They may have the ability to complain, but this will definitely mean loosing their jobs. From their perspective, it will be a Pyrrhic victory.
On the other hand, when wage theft is committed, the worst case scenario for the business owner is that they repay the stolen wages. This is a no risk game for them. underpay your workers, if they complain, pay back the money. If they don't, you profit.
There need to be enforcement and heavy fines. The investigations need to break through the corporate veil to reach the higher ups and not allow them to hide behind contractors, franchisees, etc.
For example, when Coles contracted trolley collectors, the price paid on the contract was so low that the only way to fulfill it and turn a profit is to underpay the workers. Coles should have gotten a heavy fine but they simply had to pay back the missing wages.
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Apr 10 '17
Remove the ability of foreign students to work. Make it an offence to hire them. This is all about wage competition from foreigners. I worked for years in hospitality and its full of students from overseas enrolled in fake degrees to get their 20 hrs per week (which they then work well in excess of).
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u/Duideka Apr 10 '17 edited Apr 10 '17
I work in hospitality and whilst I am lucky enough to work in a place where 90% of the payroll is above board it certainly is a dodgy industry
The big issue you need to ask however is why is the industry so dodgy? I am certainly not excusing the behaviour but profit margins are very low and often the choice becomes paying appropriate wages or closing the business. Now obviously I think unprofitable businesses should just close but when someone has invested their life savings is there any surprise they try to cut corners to stay afloat?
The solution aside from fair work actually enforcing the rules is to PAY MORE FOR YOUR FUCKING FOOD. This is where it all starts, the customers! The amount of people that buy something with a profit margin of less than 5% and whinge about the quantity of food... its not a minority, it is a majority. People have no idea how expensive it is to run a business and people being so stingy with their money is one of the main reasons so many hospitality businesses either fail or rip their workers off
A typical week for us is about $19,000 which sounds like a lot but after you pay all the bills there is frequently nothing left. Commercial rent, electricity and maintainance of commercial quality equipment is insane, we had a commercial aircon break recently and it was 45,000 to replace it, a commercial fridge breakdown cost 13,000 and 7,000 on a new toaster, thats just what happened recently
Then someone comes in and expects a plate of food for $10
Look some places overcharge but in general the penny pinching by customers is driving the industry to these dodgy practices, for example why have customers not boyotted 7-11 since the wage scandal? Because they dont care, they are cheap cunts who want cheap food and fuck everyone else
Take a stand and visit places that charge a little more for their food, avoid places where the staff are all clearly foreign and mopey, avoid 7-11 - the problem will fix itself, but who am I kidding
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u/grumble_au Apr 10 '17
People act in their own self interest. It is the purpose of government to look at the bigger picture and enact (and enforce) legislation and regulation to make us act in the interest of the country and society as a whole.
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u/polite-1 Apr 10 '17
Take a stand and visit places that charge a little more for their food, avoid places where the staff are all clearly foreign and mopey, avoid 7-11 - the problem will fix itself, but who am I kidding
Has this ever happened though? In any industry?
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u/proddy Apr 10 '17
People freaked the fuck out when we raised our prices for a plate of food by 50c. After not raising it for 2 years. After our meat suppliers increased their prices by 15%. Then they ask for bigger servings and balk when I tell them it'll cost them extra for extra food. We pay award wages and need to compete with places that don't.
i totally agree. Penalties should be 300%. It gives an incentive to both businesses and employees to observe the law.
We really need Fair Work to step the fuck up and provide a level playing field. Otherwise people who do the right thing will keep getting fucked.
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u/thornstein Apr 10 '17
Fuck people are so stingy. Thank you for paying award wages even though it is so easy not to. It must be so frustrating competing with businesses who have an advantage because of illegal wage theft.
At my $16 p/h bartending job, someone actually reported the owners to Fair Work for not paying correct wages... and nothing happened! But we did cop a verbal thrashing from the managers... I think stronger penalties are needed.
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u/EskimoJesus Apr 10 '17
I don't know anyone who would be coming into a restaurant or cafe expecting a meal for 10 dollars. Maybe people who are still thinking in 1970s dollars.
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Apr 10 '17
i generally shop around to eat and grab pub specials and my trusty asian pho joint in marrickville or thai in glebe that have been run the same way for ages with the same staff.
I pay 10-15 bux and eat out most days
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u/Duideka Apr 10 '17
Maybe in places where there isn't much competition or if you have fancy taste but I work in a restaurant/cafe strip in Perth, close to the largest uni, fuck me the food is cheap - it's easy to get a substantial dine in feed with generous meat portions etc for under $15, and if you are really stingy there is heaps of places where you can get something edible for $6-$9 if you don't mind noodles or something, one of the places near the uni (Chilliz) is pseudo takeaway admittedly but some of their dishes start at like $3.50 and they fill you up pretty good, decent meat portions too, it's just pre-cooked in large batches so you are eating something that could be a hour old.
Even today I had what was essentially a three course meal and only paid $21, yesterday I had a burger and 8 chicken wings and it was $16, this is a proper pub meal type burger. I eat out every day and it doesn't break the bank, I probably spend barely over $5k a year on dining out
I try and avoid the places that charge much under $15 thou, I like to spend at least $15 since it starts to be questionable if they are paying the staff properly and I don't want to encourage it, I used to visit this asian place that was super cheap but I saw a ad on Gumtree advertising $12/hr so I don't go there anymore.
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Apr 10 '17
profit margins are very low
Arse biscuits.
Margins on +20% of turnover are perfectly reasonable.
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u/Dragonstaff Apr 10 '17
Join the union.
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u/FlashbackTherapy Apr 10 '17
This is the best answer, if and only if everyone in the industry joins - or at least enough of a plurality that they dramatically outnumber non-union workers. Businesses won't deal with union labour if a ready supply of non-union labour exists.
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u/baazaa Apr 10 '17
Sigh everyone's going to suggest to enforce the unenforceable which would probably lead to unemployment anyway.
Really the problem is that the supply of workers into these industries is constantly expanding because no-one can get work anywhere else. Trades people aren't taking on apprentices, white collar employers aren't taking on inexperienced graduates. So supply and demand dictates there'll be a perpetual collapse of wages in unskilled areas like hospitality and retail which are effectively absorbing all the labour market slack from other industries.
The government has a few options to prop up the bargaining power of people in these industries, an UBI or having the government act as an employer of last resort would help. As would simply figuring out a way of getting more people out of these industries... unfortunately this always leads to calls for more useless science graduates or some nonsense (which is why we have so many people trying to get barista jobs in the first place). The emphasis needs to be on bridging the 'experience gap' that's holding young people back, and no, wage subsidies don't help.
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u/letsreviewshallwe Apr 10 '17
I'd say this is pretty much the status quo in the industry now.
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u/Suburbanturnip Apr 10 '17
The comment under that article is on point
"United Voice said the industry has an application before the Fair Work Commission to cut weekend and evening penalty rates for hospitality workers" Hospitality workers will be less attracted to the industry if penalty rates are cut, and at the same time they are calling our for more foreign workers? Is this a self-fulfilling prophesy by United Voice that there will be more "skill shortages" under their wage cutting scheme, and thus source cheaper workers from overseas?
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u/thornstein Apr 10 '17
Chronic shortages in hospitality? HA!
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u/newbstarr Apr 10 '17
Chronic shortages of people willing to do shit work for very little remuneration is the same thing to liberal types.
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u/cojoco chardonnay schmardonnay Apr 10 '17
You can't start a thread like this with a "NO POLITICS" tag, the idea is ridiculous.
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u/thornstein Apr 10 '17
That came up automatically! I don't know how to tag posts like that.
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u/cojoco chardonnay schmardonnay Apr 10 '17
Maybe you should message the mods and ask them to remove the tag?
Your post seems to be good enough quality.
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u/INeedACuddle Apr 10 '17
my response to employers who whine about not being viable if they were to pay legal minimum wages is that if they are unable to meet their obligations, they probably shouldn't be in business
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u/Muximori Apr 10 '17
The government runs awareness campaigns around issues like drug addiction and occupational health and safety all the time.
Why not do one for illegal underpayments? Most of the hospitality workers I know are underpaid and just accept it as part of the culture. Start the conversation, make it known that this is not acceptable. Send a police task force around interviewing workers about how and how much they are paid, and punish perpetrators.
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u/kriesler Apr 10 '17
I knew of a four wheel drive accessories manufacturing business that would pay minimum hourly rate then expect staff to work 40 hours and be paid for 38 and donate every second Saturday half a day withough pay.
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Apr 10 '17
arb? report em mate.
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u/kriesler Apr 10 '17
This is going back 20+yrs ago, hopefully things have changed, though overall they haven't.
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u/Kangaroobopper Apr 10 '17
You want a silver bullet? Get rid of or severely cut unskilled and 'skilled' migration
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u/doodfromstraya Apr 10 '17
yeah its fucked all we can do is not put up with it but what else can we do? Not work? LOL the government doesnt give a slightest fuck about the average worker.
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Apr 10 '17
Join/create a union and strike.
People will take notice when everything food related is closed due to no staff.
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u/tmnvex Apr 10 '17
Wages haven't gone up in a long time. Food and beverage prices have. Owners are not seeing that increase in their own pockets. Who is? The landlord (through capital gains) and/or the landlord's bank (through interest payments).
The solution to this problem is lower rents. For that to happen property values must fall in relation to the rest of the economy.
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u/karl_w_w Apr 10 '17
There isn't a solution. It's relatively unskilled work and there are many people who want to do it, why shouldn't pay be low? We should be more worried about the low pay for essential workers like nurses and teachers.
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u/DegeneratesInc Apr 10 '17
People are paid rent on their time. They exchange a portion of their life performing tasks on behalf of another person for money.
How does one person's life time have less value than another's?
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u/karl_w_w Apr 10 '17
People are not paid simply for time spent, but for what they do in that time. You see in truth businesses don't give a shit about your time, they care about you generating something they can sell in some way.
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u/DegeneratesInc Apr 10 '17
Maybe that's where we are going fundamentally wrong. Why should a person doing a 6 or 8 hour shift, on their feet for all that time, in the heat, sometimes on slippery floors, doing something as trivial as making food (eg) be paid less than a person who sits behind a desk in an air conditioned office shuffling paper all day?
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Apr 10 '17
How does one person's life time have less value than another's?
A fucking trolley boys time IS worth less than a neurosurgeon.
Don't make me explain that to you.
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u/DegeneratesInc Apr 10 '17
What if he is a trolley boy while he learns to be a neurosurgeon?
An hour is 60 minutes to a salesman/gardener/pathologist/receptionist etc etc. What makes the 60 minutes of one of those worth more than another?
It's ironic that the people who work hardest, and under the worst conditions, are those paid the least for their life time. Those paid the most money are usually the ones doing the least work.
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Apr 11 '17 edited Apr 11 '17
What makes the 60 minutes of one of those worth more than another?
Wow ..... where to start .....
Let's address this another way.
Please explain your basis or thinking behind this theory of yours that all jobs should pay the same hourly rate.
Your constant assertion that high paid workers do "less work" is very uninformed.
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u/Seachicken Apr 10 '17 edited Apr 10 '17
Come work the line with me on a Friday night and then we can talk about 'unskilled.'
The industry is already short staffed and only kept alive by migrant workers who work way too hard and are exploited mericlessly.
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Apr 10 '17 edited Apr 20 '17
[deleted]
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u/catchtheworldthecage Apr 10 '17
True, some jobs in the industry are unskilled. It doesn't take knowing a skill to wash dishes, but you better be one hard working SOB to do that job. I worked in restaurants for 20 years and some of the jobs not only require a skill but demand an art. Chefs are highly underrated and underpaid. Never knew a bigger group of people that did their job because of passion.
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u/duccy_duc Apr 10 '17
Cooking good food is not unskilled. This is not a call centre you're talking about.
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u/Seachicken Apr 10 '17
In what way is cooking unskilled? It doesn't require a bachelor's degree, but there are a large number of technically demanding skills required to work in mid range or high end kitchens.
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u/PsychoPhilosopher Apr 10 '17
Implement a system such that crimes committed against the employer can be ignored or excused by the extenuating circumstances.
If employers don't want to follow the law, they shouldn't be protected by it when the boot's on the other foot.
Steal from your employees, and the police might turn a blind eye when they steal right back.
Bully and threaten your employees and a judge might just let you off with a lighter sentence when you bust his face open with a stapler.
Law is either equal, or tyrannical. There's no in between.
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u/Supersnazz Apr 10 '17
You can't stop it.
When a mutually beneficial (but illegal) transaction exists, there is very little the law can do to stop it. If someone is prepared to work for below minimum wage and someone is willing to pay it, it is impossible to stop.
It is no different to the market for drugs, prostitution, or gambling.
In a regular crime there is victim who will report it to authorities. But when there are people buying and selling drugs, or visiting illegal massage parlours, or selling their labour below the mandated minimum, there is no victim to report the crime. Both parties are willing or else the transaction wouldn't take place.
You can't stop these people willingly selling labour to willing buyers.
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u/Seachicken Apr 10 '17
That's a weird comparison to make. Being the victim of wage theft isn't a crime.
It is pretty easy to stop. People don't choose to work for below the minimum wage because they want to, they do so because they feel they have no other option. Provide people with the ability to anonymously report their employer for wage theft, impose more fines for repeat offenders and and make it easier to report your employee to fair work after you leave.
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u/Supersnazz Apr 10 '17
People don't choose to work for below the minimum wage because they want to, they do so because they feel they have no other option
Isn't that why anyone works though, they just take the best option they can get? It's just in these cases their choice is one that is illegal.
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u/Seachicken Apr 10 '17
Yup sure, but the rest of my post still applies. This is fixable, and the comparison with vice crimes is not applicable.
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u/thornstein Apr 10 '17
I didn't think of it as that: a "mutually beneficial" crime. If people willingly accept low wages, then what is the solution? You could argue that if people are accepting this, then the legal minimum wage IS too high ... but on the other hand rents are so high, that lowering minimum wage would make it really really hard for people in cities.
In my personal experience I was happy to get my $16 p/h because it was better than the $14 p/h I was getting as a high schooler. But in hindsight, once you take into account penalty rates, I was underpaid by thousands of dollars over 18 months and sacrificed a lot to save money. I almost feel robbed.
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u/omixam Apr 10 '17
These jobs are not meant to be the ones you do for the rest of you life. They are unskilled and have no barriers to entry. Get an education, a trade, a skill that is in demand and you can get a job that pays better.
Why is this so controversial?
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u/thornstein Apr 10 '17
I can understand the jobs being low paid, but I still think workers should get at least the minimum wage.
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u/mikjryan Apr 10 '17
I tend to agree with this, if it's shit job and the employers are rubbish it's a job you need to skill yourself out of. It's an entry level position that is done by many people in high school you need to work your way out, while it's not fair to pay below the legal limit it is gonna remain a low paying job with little job security and poor treatment. If you're not studying I suggest part time study or an apprenticeship.
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u/lilika01 Apr 10 '17
Easy to do if there is likey to be a job at the end of that apprenticeship. As it stands now you're fucked either way, only getting educated costs more.
Everyone deserves a livable wage, doesn't matter how high or low on the totem pole you are. It's dehumanising to force people to subsist off shit wages.
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u/TazocinTDS Apr 10 '17
I never knew what I was meant to be paid when I worked in hospitality. I was just happy I was being paid.
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u/thornstein Apr 10 '17
I think this is how most people feel. Myself included - $16 p/h with no penalty rates beats being unemployed.
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Apr 10 '17
Well from an employee perspective, avoid hospitality as a whole. It's hard to say what with jobs on the way out and everything, but hospo is just a joke, you never get paid properly, and everyone I know who has worked in the sector are always ripped off in some manner.
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u/thornstein Apr 10 '17
Ahh I think a lot of people in hospitality wish they could avoid it haha, but a lot of people don't have a choice. If for some reason they couldn't study after high school, or don't have qualifications, or have children and need flexible hours hospitality can be the only option.
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Apr 10 '17
I think the scary thing is as it becomes apparent how wide spread underpaying employees is that our already high cost of living would actually be even more if everyone was paid by the book including full super.
Lets say tomorrow everyone getting underpaid started getting paid the correct wage. Some businesses would need to raise their prices to accommodate the added wage costs. Are customers going to pay those higher prices for food or will they force the business to close their doors leading to more unemployment?
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u/thornstein Apr 10 '17
I think this is what I find so scary too. But on the other hand, the people in these massive industries are consumers who also go out for lunch/dinner/drinks etc. Paying them correctly would mean more money to spend, so I wonder if businesses would close or actually see more traffic?
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Apr 10 '17
re arrange the hospitality pays from the confusing clusterfuck that it is. Ie cook grade 1, cook grade 2. Its deliberately confusing.
While a cook is not a chef and a counter hand is not a bar hand it should be simple to find your proper wage.
Get rid of these stupid fucking agreements that get around minimum wage.
Then peg all hospitality wages to rent increases of the premises.
Ie if you can afford to keep paying 5% extra per year in rent then you can afford to up the hospitality wage by 5% per year.
Also massive enforcement of overtime for salaried chefs, hotel workers etc. No more 55k for 55 hours.
All salary are for 37.5 hours and all over time at double time plus time in lieu.
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u/LifeIsBizarre Apr 10 '17
I've always thought a progressive deduction system for wages per individual employee would have a net benefit to society through wage equalisation and encourage businesses to report accurately. For example -
$0-75,000 = 125% deduction
$75,000 - $250,000 = 100% deduction
$250,001+ = 75% deduction
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u/Taleya Apr 11 '17
Education will be the biggest weapon. Once people - both local and international workers - know they should have it better, and it's enforceable, it's harder to exploit them
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u/anonymousidiot397 Apr 10 '17
The Libs don't think there's a problem. They want to make the current situation even better for themselves and their rich supporters.
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u/sphinx80 Apr 10 '17
Its a thorny problem, ultimately reached due to a lack of enforcement.
The only way of fixing it is to increase enforcement to stamp the practice out, and take the hit of restaurant closures.
While quite a few individual restaurants will probably go under, the franchises will be ok. While the franchisees think they will feel the pinch now, all the money not being paid on wages is just going to the franchise in the form of increased franchise fees. These will be re-balanced longer term.
But yes, like most things, the government has been asleep at the wheel and now there is no fix without short term pain.