Government needs a lot more jails for bosses

A lot more. Via Domain:

Attorney-General Christian Porter says he is prepared to legislate “significant” wage theft penalties – likely to be up to 10 years’ jail – to deter the “unacceptable” practice of persistently underpaying workers, as the government grapples with stagnant wages and a slowing economy.

In a wage theft discussion paper to be unveiled on Thursday, Mr Porter, the Industrial Relations Minister, promises “strong and effective criminal sanctions” while saying his promised legislation must not create “unintended consequences”.

“For example, we do not want employers who make genuine mistakes and move swiftly to rectify them to end up with a criminal record,” Mr Porter said.

…The paper says the government “believes there can be no excuse for deliberately exploiting workers” and the bill became necessary after a taskforce set up to investigate migrant worker exploitation found “strong evidence of systematic and deliberate underpayment”.

“Wage underpayment and employee exploitation deny employees their legal entitlements and have the further effect that there is not a level playing field for employers,” the paper says.

“The overwhelming majority of employers who are trying to do the right thing are competing against those that underpay or exploit workers.”

Cue Migration Council head Innes Willox with a panicked response demanding no penalties at all.

If the legislation took this form I would support it. But there is about as much chance of that as there is of me be invited to dinner with Xi Jinping.

Consider, there are 90k hospitality businesses in Australia of which it is estimated half are stealing wages.

The Australian prison population is today around 44k spread across 111 institutions. So, allowing for a few mistakes, we will need another 111 prisons just to jail the barista bosses.

Now consider that there are 2.3m businesses in Australia. Let’s be generous and say that only 10% of them are guilty of wage theft. That’s another 300 prisons give or take.

The construction boom would be impressive if not terribly productive.

But it might be better if we just cut immigration.

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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