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Paying the Penalty? The High Price of Penalty Rates in Australian Restaurants

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  • Phil Lewis

Abstract

As a result of decisions by numerous state and federal commissions and tribunals, most recently the Fair Work Commission, penalty rates have become an important influence on the labour market in Australia. The paper investigates how relevant are the myriad penalty rates to today's social mores and the modern service-based economy. What are the consequences of penalty rates for employment, productivity, profitability and consumer welfare? What would be the impact of their removal? A number of data sources are analysed in the context of the economics of labour markets to answer these questions. The restaurant, cafe and catering industry is used as a specific example to illustrate the effects of penalty rates.

Suggested Citation

  • Phil Lewis, 2014. "Paying the Penalty? The High Price of Penalty Rates in Australian Restaurants," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 21(1), pages 5-26.
    • Handle: RePEc:acb:agenda:v:21:y:2014:i:1:p:5-26
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    File URL: http://press-files.anu.edu.au/downloads/press/p302941/pdf/Paying-the-Penalty-The-High-Price-of-Penalty-Rates-in-Australian-Restaurants.pdf
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    References listed on IDEAS

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    1. repec:adr:anecst:y:2012:i:105-106:p:2 is not listed on IDEAS
    2. Bjarne S. Jensen & Paul de Boer, 2006. "Long-Run Patterns of Demand: The Expenditure System of the CDES Indirect Utility Function - Theory and Applications," DEGIT Conference Papers c011_056, DEGIT, Dynamics, Economic Growth, and International Trade.
    3. Ana Rute Cardoso & Daniel S. Hamermesh & José Varejao, 2012. "The Timing of Labor Demand," Annals of Economics and Statistics, GENES, issue 105-106, pages 15-34.
    4. Andrew Seltzer, 1997. "An Evaluation of the International Evidence on the Employment Effects of Minimum Wage Legislation," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(2), pages 208-214, June.
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    Cited by:

    1. Martin O'Brien & Raymond Markey & Eduardo Pol, 2018. "The Short Run Impact of Penalty Rate Cuts on Employment Outcomes in Retail and Hospitality Sectors in Australia," Economic Papers, The Economic Society of Australia, vol. 37(3), pages 270-286, September.

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