This article tests the employment impact of recent reductions in Australian wage premiums, or penalty rates, using surveys of 1828 employees and 236 employers in Retail and Hospitality sectors. In applying wage premium reductions for Sunday work, the national regulator, the Fair Work Commission, anticipated improvements in trading hours, employment and hours worked as a consequence. However, the authors found no statistically significant evidence for these predictions. Nor did difference-in-differences methods indicate substitution of workers subject to cuts for those who were exempt. The authors present the first systematic purpose-designed empirical evidence on the employment impact of wage premiums. In the absence of empirical evidence, the regulator had referred substantially to minimum wage research. This study also has implications for minimum wage research, and contributes to it with a novel methodology examining both aggregate hours and employment, comparing those subject to cuts with those not, and surveying both employees and employers.
Bibliographical noteFunding Information:
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Financial support for this project was received from the Australian Council of Trade Unions (ACTU), the Shop, Distributive and Allied Workers' Union (SDA) and United Voice (now part of the United Workers Union).
© Australian Labour and Employment Relations Association (ALERA) 2021 SAGE Publications Ltd, Los Angeles, London, New Delhi, Singapore and Washington DC.
Copyright 2021 Elsevier B.V., All rights reserved.
- Labour markets
- minimum wages
- penalty rates
- wage premiums
- wages and employment