WHEN Kim Beazley needs new socks, he has a range of options. With his parliamentary salary of just over $205,000 a year – plus allowances – the Opposition Leader can hit a high-priced boutique department store or slum it in a discount chain. But Australians who don't have that option or Mr Beazley's income need to rely heavily on shops that sell at a discount to do their shopping. One of the ways such businesses manage to keep prices low is through labor costs. But under Australia's antiquated centralised wage-fixing system, employers have until very recently had little choice in striking a balance between their staffing and service levels. Under the old regime when a company such as Spotlight, which recently found itself the victim of an ALP beat-up over its plans to move workers onto AWAs, wanted to cut labor costs, it could fire workers or slash plans to hire in the future. Either way, the end result would be higher prices and lower service for the customer.
It's a basic rule of economics which Kim Beazley fails to grasp. Discount stores such as Spotlight rely on lower- and middle-income Australians for their patronage. When employers are forced by the government to pay workers $35 an hour (effectively almost $70,000 a year) just for showing up on Saturday, consumers ultimately pay the price. And it is less well-off consumers who bear the brunt of this labor premium. Furthermore the inequities of the old awards system meant that someone who staffed a till on a Saturday afternoon could be paid far more per hour than a bartender pulling beers and mixing drinks on a busy Saturday night. By demanding a return to the bad old days of collective bargaining, Mr Beazley is essentially telling less well-off Australians that they should pay more for the goods and services they buy. Contrast this with the Howard Government's approach to economics and employment which has been to liberalise industrial relations while developing a strong safety net to subsidise low-income families. With unemployment now down to 4.9 per cent, it's pretty clear whose approach leads to jobs and whose leads to penury.
