A growing call for a pay rise for thousands of retail workers came to a head this week with a national protest that could mean big for the retail sector.
There are concerns of another blow to the retail sector’s bottom line after hundreds of thousands of retail workers took to the streets of Melbourne, Sydney and 20 other cities nationwide on Tuesday to fight for increased wages.
The protest comes after a staunch push from the Australian Council of Trade Unions (ACTU) for sector-wide reform of the system of enterprise bargaining – a change which could mean big for the retail sector.
The union is calling for a change to the rules to see a fair bargaining system, an increase to the minimum wage and the restoration of penalty rates.
According to Sally McManus, secretary of the council, wage growth is at near record lows and four out of five workers are not getting pay rises which keep up with the cost of living.
“Working people in Australia are demanding that the rules are changed,” she said.
“This political protest is aimed at making Scott Morrison and Federal politicians listen – Our wages are going backwards, families are struggling, too many people are stuck in insecure work. We need to bring back balance to the system so working people get fair pay rises.”
These echoes from labour unions could have big implications for retailers, Brian Walker, founder of Retail Doctor Group told Retailbiz.
Mr Walker said he has “some concern” over the escalating push for wage growth given retailers are “not only faced with increasing wage costs but also dealing with landlords pushing harder for increased rent, their customers are dealing with higher utility prices all the time.”
“We’re seeing a more conservative, some would argue downward trending retail economy in the past few months. This would only continue to place greater pressure on that dampening down,” he said.
It’s this volatile environment that has created tough market conditions for retailers, that would only get worse with wage increases, Mr Walker said.
“What we’re seeing I think is the cycle of effectively a more regulatory government coming in and as a consequence we’re seeing retailers who may well have to bear the brunt of some of this and the way they will bear the brunt could be higher wage costs, in particular more penalty rates which inevitably causes pressures on retailers particularly smaller scale retailers.”
Higher penalty rates would inevitably increase this crunch on retailers’ bottom lines, he said.
“That impacts on a decision as to whether these should be passed onto the consumer or borne in lower margins or a mix of both. It compels retailers to be in some cases regrettably reducing staff hours and reducing staff hours in a climate where it’s tough out there for a lot of retailers.”
But the move would be good news for some retail employees, he says.
“For many people who might not have seen a wage increase for a long time it’s probably quite a good thing but for small medium retailers and in an incredibly competitive environment where they’re seeking every dollar and margin return they can it can be pretty punishing.”
While the Opposition Party supports the union’s plea, the Morrison Government has fervently pushed back against it.