Fair Work: 47% of regional anus economy stealing wages

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A whopping 725 workers have been back-paid more than $330,000 after a series of Fair Work Ombudsman (FWO) raids identified worrying levels of wage theft in regional Victoria and NSW.

Less than three weeks after recovering $580,000 in stolen wages from regional businesses across Australia’s eastern seaboard, the FWO has unveiled the results of another series of inspections in Albury-Wodonga, Ballarat and Wollongong.

It found nearly half (47%) of the 489 businesses that received surprise door knocks were in breach of workplace laws, including retail outlets, takeaway shops, cafes and bars.

Over a third (35%) of audited businesses were found to be underpaying workers their minimum hourly rates, while 12% weren’t paying correct penalty rates.
The findings are just the latest in a long line of FWO audits identifying widespread wage theft and non-compliance with Australia’s workplace laws, particularly in regional areas.

Wage theft was the most common breach identified by FWO inspectors, followed by record-keeping failures, often used as a tactic by dodgy operators looking to cover their tracks.

Echoing findings from similar campaigns in the past, the ombudsman said a “lack of awareness” was behind the “majority of non-compliant cases”, including the 31% of firms caught stealing wages.

More than half (63%) of employers audited were “unaware” of all applicable workplace relations obligations, 15% had “misinterpreted” award requirements and 9% stole wages because of a “business decision” such as paying a flat rate.

Fair Work focused on specific areas in regional Victoria and NSW with large numbers of university student residents attending nearby campuses, once again demonstrating the link between vulnerable workers and dodgy employers.

“Like many workers in the hospitality industry, young workers in these regions were potentially vulnerable due to their age, visa status and reliance on local jobs to support themselves,” fair work ombudsman Sandra Parker said in a statement circulated on Thursday.

“Australia’s minimum pay rates are not negotiable, and employers in the fast food, restaurant and café sector need to actively check that they are paying their staff correctly before we visit their business.”

Fines totalling $30,360 were handed out in 37 cases, alongside 35 format cautions and nine compliance notices for back payments.

In a similar audit last month, which saw 1,300 regional businesses visited by inspectors, one-in-five (22%) were found to be stealing wages from their workers.

This will come as no surprise to MB readers who long ago probed the anus of the services economy:

It struck me as I sat there that it was wonderfully convenient to have a Thai massage joint just around the corner, especially given my local shops are not very large. I briefly surveyed the other shops and realised swiftly that what I was looking at was the lion’s share of the Australian services economy supply chain. Nearly all of it was directed not at the production of anything, nor the supply of anything, nor the inputs to some factory, but at servicing my person. Specifically, it was mostly targeted at various components of my body. There was an inordinately expensive organic grocer for my stomach. A retro barber for my head. A manicurist for my nails. A tatooist for my ink. A specialist wine purveyor for my tongue. A gift store for my birthday. A shop front personal trainer for my flab. An Asian tailor and presser for my clothes. Any number of cafes of course. And a real estate agent on every corner.

I realised that it was I that was the factory. My body, or more to the point, my mind, my intellectual property, was being supported my an extensive supply chain of services that plumped, fattened, thinned, preened, pressed, fluffed, trimmed and massaged me into the ongoing production of ideas.

There was one thing more that was obvious. These various services were not just the slapdash Aussies of yesteryear. There were no lackadaisical loafers working for the man and hanging for a smoko. Each of the services on display was a finely crafted specialist, an artisan in his and her craft, immensely serious with extraordinary attention to detail. The massage offered a limitless array of options right down to your chosen incense and its specific impact upon your chakras. The barber wore a perfect replica suit from the 1920s and sported enormous mustaches to match. The personal trainer rippled in the window. The grocer glowed with ruddy peasant health and one could almost smell the fresh loam on her fingers. The cafe’s were a rival for Tate Modern in their timberwork and ceramics, and one could literally choose a vintage decolletage in which to hang as if riding in a time machine.

The amount of effort and innovation going into finding a competitive edge for the privilege of servicing my sagging flesh was spectacular.

And that’s the thing. All of these local shops are a hive entrepreneurial beavering. But all of them are directed inwards in an endlessly dividing paradox of insignificance. None of them is tradable, as services mostly are not, so none has the chance to flower much beyond the local shops, let alone nationally or internationally. That poses a problem for the economy because if all you ever do is service one another in more elaborately infinitesimal detail then there is no actual wealth generation going on. There was no organic capital generation, no capital deepening nor breakthrough’s in efficiency. The capital that drives this machine by definition comes from outside of it in the form of a visitor, a new buyer of a local asset or someone that has borrowed to invest.

In short, this bulging prolapsed anus economy is based upon population growth to supply illegally cheap labour, more warm bodies in the absence of income growth and debt for houses to create wealth. It is a near complete waste of everybody’s time and effort other than for a very few oligarchs.

There are jobs but they all lead nowhere beyond the confines of your own date and are endemically underpaid. Corrupt authorities’ answer is to back-fill this lack of income growth and demand with ever more people, intensifying the “capital shallowing” and slicing the income pie into ever thinner pieces.

It is a doom loop that will eventually see the low rent services rectum distend until it engulfs and smothers the host.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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    • The idiots who run the show think that if you bring the denizens of the third world to Australia, they will become dinkum Australian cobbers the instant they step off the plane. This is because of magic.

      As any normal person can understand and clearly see with their own eyes, what actually happens when you bring the third world to Australia is that Australia becomes like the third world. Corruption, violence, stupidity, ethnic and religious conflict and every other negative aspect of these putrid societies is plonked down in great blobs all across the nation.

      The negative effects are obvious everywhere…as shown by this particular post.

      My personal Australian hero is Warrant Officer Kevin Wheatley VC of the AATTV. My kids know his story well. While in the service of his country Dasher Wheatley gave his life for his mate Butch Swanton. If he could see what’s become of his country, I wonder if he’d think it was worth it?

      • You really need a historical review old boy.

        Seems the dramas is about whom the ideological effects are applied too and not the ideology itself it seems.

  1. ‘Date’ as term for anus is tragically underused. Good on you for bringing it back.

    • Yes, except too much juvenile imagery severely limits the chances of this genuinely valuable article being replicated anywhere normal people might read it.

      Lose the anus references please!

  2. Isn’t it as simple as saying:
    Australian city based labour adds zero value outside the bubble?
    The regional areas work in a very different economy to the city. Regional businesses are still connected to the globally economy and need to define/price local labour within that global frame work, or everyone suffers.
    By contrast most Aussie big city dwellers define their labour added value in very localized terms most of which have almost zero relevance to the global economy.
    This is a dysfunction that we’ve deliberately created and nurtured for largely Political reasons, falling wages (wage theft…) are just one aspect of the broader syndrome. The root cause is that most Aussie labour is not globally competitive (in any sense of the word) . Our cities mask this fact by selling that which doesn’t actually belong to them, unfortunately Regional areas don’t have that same luxury so they’re forced to create their own rules only to be judged and found wanting by their betters in the city.
    It’s beyond comical

  3. Fines totalling $30,360 were handed out in 37 cases

    Geez, what a waste of time. Wouldn’t even cover the investigation costs, let alone act as a deterrent

    • Correct. But that’s the whole point. There’s really no intention for this to act as a disincentive to others taking advantage of our ‘growth’ and ‘vibrant’ workforce.

  4. This is a natural consequence of having so many different awards with different payment rates and approaches to penalty rates. The system is ridiculously complex and makes it difficult and costly to identify the actual right wages to pay.

    If they want to actually fix it, the best approach is to ban the payment of cash wages (full stop), require weekly single touch payroll through Xero or MYOB, and require all businesses to use the Deputy App (or similar) so that wage rates are incorporated straight from the Awards into the payment rates used by employers in their systems. Then hold all accountants (not just businesses) accountable for making correct payments, including large minimum fines (150% of the business’s revenue over the last year) with jail terms too.

    The problem with this is that it would actually solve the problem and make it known that:
    a) many current ’employees’ are unproductive and unemployable at current award or minimum wages. This will lead to a large rise in unemployment.
    b) many businesses are unviable if they have to pay current award or minimum wages. Again, this will lead to a large rise in unemployment.

    Because of (a) and (b) above, they will never actually address this problem head on, and token responses of ‘hard line’ investigations with piss weak fines will remain the status quo.

  5. reusachtigeMEMBER

    The filthy hand of communism getting involved here where it is definitely not wanted. The free hand of the market had already decided on the rate for labour and did not need socialism to destroy this equilibrium and twist it against business. Every day we lose freedoms.

    • SupernovaMEMBER

      Never thought I’d ever get a chance to agree with you Reusa but it actually does have a positive spin for your benefit: If the feds didn’t socialise (centralise) the Aussie wage structure and ensure continuation of over generous wage & penalty rates (utterly out of keeping with global competition) the plebs mortgage application would never be approved by financial institutions to ensure the continuously upward movement of property prices. You see centralised wage structure and ponzi house prices are directly linked. Astounded you missed this one Reusa!

      • Disagree Supernova …

        Wages have nothing to do with lending credit for RE or did you miss the whole saving and loan thingy and the machinations leading up to the GFC emanating out the U.S.

      • DominicMEMBER

        Please avail us of your take on the savings and loan scandal. I have a strong feeling I know exactly what you’re going to say.

    • The free hand of Capitalism is busy giving $50 wristies in a shopping strip near you.

  6. Why are the awards the same in Sydney as in regional Aus? The economics are hugely different and so too should the minimum wages.

    • DominicMEMBER

      +1 The cost of living is so vastly different only the terminally stupid would have awards set as standard. No wonder the regionals are exploiting backpackers and other itinerant workers. Minimum wage and the various ‘awards’ are to blame for much of the unemployment in the country.

  7. – And this is PRECISELY the reason why property prices won’t go higher any time soon. People borrowing money for a(n) (investment) property need to have an income. That way they are able to pay Interest (and Principal) on those loans/mortgages. Those mortgage costs have to come out of their INCOME. As a result of the wage theft those incomes will feel a downward pressure, will be lower. And lower/falling income/wages also mean that people/workers/households are less able to afford the current (high) property prices. Especially those insane property prices that we see currently in Sydney & Melbourne.
    – In that regard immigration actually a force pushing property prices LOWER instead of HIGHER and undermines demand for houses. Yes, immigration will mean an increase in demand for housing but it is wages/income & credit that determines at what prices properties are being sold/bought.

    • DominicMEMBER

      No, no, Willy. It’s all about supply and demand. More people = instantaneously higher property prices! 😉

      • – That’s the view of the good MB folks as well. More immigration = higher property prices.
        – We (still) have a record high inflow of immigrants. Then why have property prices been falling since mid 2017 ? Perhaps it is a lack of good solid income ?
        – I assume you’re joking, right ? LOL.

    • DominicMEMBER

      Yes, I was being sarcastic. The view of a number of people on this blog (who shall remain unnamed) believe that immigration can shore up property prices indefinitely but this is not the case. The truth of it is that the quality of immigrants imported has been in decline as the years roll by, meaning that less of them actually qualify to buy at our ludicrous prices and well-paying jobs are increasingly hard to come by as the economy deteriorates, exacerbating that very problem.

      We are actually in the early stages of a death spiral that no government will be able to contain and when people start to realise this we will see selling pressure intensify and the market crack for good.