Round-the-clock consumption no reason to cut weekend penalty rates

If only cafes and restaurants didn't have to pay such high wages on Sundays, they could employ more staff and do a better job looking after customers, right?

It's an argument that seems to have found a sympathetic ear in Employment Minister Michaelia Cash. While any changes to Sunday pay rules would go to an election first, she says penalty rates "certainly seem to deter weekend work".

Well, yes, they probably do. But it's not that simple, not by a long shot.

What we do with penalty rates strikes at an issue that is much more profound and affects just about all of us: preserving the weekend against the pressures round-the-clock consumption.

So if penalty rates are really up for debate, as the government wants, let's acknowledge what is also at stake here.

This isn't just about the number of jobs that might (or might not) be created.

It's about how we value those two days when most of us are off work – Saturday and Sunday – and compensate those who miss out.

Penalty rates are perhaps the most contentious aspect of the Productivity Commission's draft report on the workplace relations framework.

The commission agrees weekend penalty rates are fair in principle. But it wants them cut on Sundays for workers in cafes, bars, restaurants, entertainment, and retail.

Why are these staff singled out for wage cuts?

Well, the first step in the commission's argument is to say that being open on a Sunday is now par for the course in these industries.

"Australian society expects to be able to shop, go to a pharmacy, and eat at cafes and restaurants on weekends. The value of supermarket shopping on Sundays now exceeds some weekdays," the report says.

All true. However, the next leap in the argument is the bit we should be very wary of.

"This trend will not diminish. Consequently, the workplace relations system should embrace the concept of seven-day weeks in the relevant services industries," it says.

"It should provide penalty rates that take account of the types of jobs and skills needed in these industries and that are proportionate to the impacts on their employees."

Hmmm. This might be heresy to some business types, but since when did the expectations of consumers justify pay cuts for the people who are providing the service?

As University of Queensland economics professor John Quiggin says in a submission to the commission, the fact that people expect services are provided on the weekend "has no obvious relevance to the question of whether employees should be compensated for providing such services".

He makes a good point. To embrace the concept of the seven-day working week, I'd like to see stronger evidence than: people like shopping on Sundays.

Quiggin, who has provided expert evidence to the Fair Work Commission for the union United Voice, also points out a big inconsistency.

The Productivity Commission says workers in essential services are also expected to work every day but their penalty rates should remain unchanged because these are in "lock-step" with community expectations.

I agree. People providing essential services should of course be compensated well for giving up their weekend.

But why are they more deserving of the extra pay on Sunday than others?

People who wait tables, pour beers or stack the supermarket shelves are giving up the same thing – time off work, often spent with friends and family. So why should their Sunday pay be assessed differently?

And that brings us to an inevitable consequence of any cuts in penalty rates: it would hurt the wages of low-paid staff more than better-paid professionals.

The Productivity Commission acknowledges these concerns, saying "most existing employees would face reduced earnings". But it says we need to balance these costs for individuals the more widely dispersed gains to society.

These would include more jobs being created and gains for consumers such as better service, it argues.

"They may get better service if employers choose to use more experienced staff and less juniors on Sundays, and face fewer queues due to potentially higher staffing ratios."

So, customers may get better deal on Sundays but it comes at the expense of the (mostly lower-paid) staff serving them.

If we accept the logic of cutting penalties in the consumer-heavy part of the economy, it can become a slippery slope.

The relentless expansion of consumption into the weekend is unlikely to be confined to hospitality, retail and entertainment. Other services will probably follow, all the while pushing more people to also work on weekends.

Indeed, the commission says we should look into which other industries should also have Sunday penalty rates rolled back over time.

Sound like the direction we want to be heading in?

I don't think so.

There is indeed undeniable evidence that consumption is increasing on weekends as a result of changing customer habits.

However, that doesn't mean we should further entrench the process through workplace rules.

What are presented as the "gains" of cutting penalty rates – job creation and shorter queues for a coffee on a Sunday – need to be weighed against the risk of accelerating the erosion of the weekend.

Ross Gittins is on leave.