We’ve pointed out in the past that Myer CEO Bernie Brookes sometimes makes exaggerated claims when complaining about what people get paid when penalty rates apply. It seems Harvey Norman boss Gerry Harvey suffers from the same affliction.
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Over the weekend, Harvey popped up on the ABC’s Business Insiders program and made the following claim:
I know people like myself where we’ve got resorts or we’re in the hospitality business and we just can’t make money because you’re paying someone minimum $42 per hour or something on a Sunday. You’ve got to open on a Sunday but at the end of the day you’ve just lost a lot of money by opening on the Sunday so it’s very, very difficult to make money when you’re paying unskilled people $42 per hour.
Two points to make here. Firstly, there are very few jobs that are completely “unskilled”; I would need considerable training to be an effective waiter, for example.
But the more important point: just who is earning this $42 figure? Blogger Matt Cowgill last year did a comprehensive analysis of similar claims by chef George Calombaris and concluded that they were wildly exaggerated. Award rates are not as high as is often claimed.
In the hospitality industry, the absolute maximum you had to pay under the award was $34.49 an hour, and that was for a fully-trained chef with all loadings included. For waiters — a more representative example of “hospitality workers” — the figure starts at $27.93.
It’s to be expected that business owners will complain about what they have to pay people; we see the same phenomenon at work in IT when jobs are offshored. However, it doesn’t help to exaggerate the scale of the problem. In percentage terms, there’s a big difference between $27.93 and $42.