May 16, 2016

Horse 2112 - All Hail The Market, Praise Be!

No. Just, no.

Don't you dare frame this as restaurant workers being "bludgers" when you are the ones who openly called for the end of penalty rates, Daily Telegraph. I'm sorry but if the market is the be all and end all of all transactions, and praise be the market Amen, then you shouldn't be surprised when people who supply labour make rational choices and decide that it's not worth their effort to supply that labour because the market price is too low.

In any given market, there are suppliers and customers who demand that particular good or service. Customers tend to demand more of that particular good or service as the price falls and suppliers tend to be more willing to supply more of that particular good or service as the price rises. These two forces of supply and demand will push each other until both parties find a mutual point of agreement and this point is called the equilibrium point.

The truth is that employers who are the ones demanding labour, would like to pay nothing if not as little as possible for that labour if they can get away with it. The labour market is one of unequal power and so the law has had to step in and proscribe minimum conditions under which someone can be employed. These minimum conditions also happen to include the minimum wage for a particular job.

Employees, the ones who supply labour, generally have underlying reasons for doing so. Those underlying reasons are pretty rational, like needing to pay for things like rent, utilities and groceries. If employers are to tight-fisted to pay a wage which meets these requirements, then they shouldn't be surprised when people start supplying less labour.

In most markets the rational choice for demanders is to raise the price that they pay for that particular good or service but labour is a sticky sort of thing with regards to prices. Instead of having a whinge in a daily newspaper like a bunch of six year olds, most demanders would simply pay more for those goods and services but for some reason, employers are allowed to demonise their employees in mass media. The Daily Telegraph who receives its advertising revenue from mostly larger firms and corporations, naturally will side with employers, which is rational considering they are the ones who pay their bills.

If as the Daily Telegraph complains like a clarion on its front page and again on the editorial page, that the modern generation of workers are "loafers", then how exactly is cutting the salaries of the staff, going to incentivise them to do better and work more productively? If anything, that's going to trash employee morale and with it performance and perhaps the bottom line.

DESPITE what one may gather from various cooking shows, the life of a chef isn’t all television cameras and cravats. Indeed, running a kitchen is physically and mentally demanding, requiring intense concentration and creativity in conditions that are often unavoidably hot and cramped. There are several reasons why chefs are known for occasional grouchiness.

All signs point to the chef shortage being due to another shortage — of a willingness by young Australians to put in the hard yards before gaining their due rewards.
“I think it’s a generational thing myself,” high-profile chef Colin Fassnidge, of Surry Hills’ 4Fourteen, told The Daily Telegraph.
-  Daily Telegraph, 16th May 2016¹.

So this chef shortage is due to a shortage of a willingness by young Australians to put in the hard yards before gaining their due rewards? Really? Did anyone consider what those "due rewards" actually are? All in all, I think that they're pretty horrid.

Across industry generally, there is a lack of businesses wanting to take on apprentices. They want someone to fulfill a role instantly and they don't to bother with the effort to train someone.

According to Fair Work² the Minimum hourly wage for an Apprentice working in the Hospitality industry is just $11.07. This means that the minimum weekly wage for a first year Apprentice is just $420.70 a week. No offence but it is impossible to live alone and rent anything in Sydney on that sort of wage. If you are living alone; which might be the lot for someone who has left university or in their early 20s, then on a wage like this, you're forced to share an apartment with someone else.
On the first rung of the ladder, as a Food and Beverage Attendant grade 1 or Kitchen Attendant grade 1, then it does improve to $675.90 but that's still not brilliant.
Is that really going to be worth it if you're being yelled at by head chefs, standing on your feet for several hours at a time and in temperatures of circa 45°C?

If what the Daily Telegraph claims to be true that a restaurant group recently went on a mission to the Philippines to hire 30 chefs, then isn't that just justifying restaurateurs paying their staff even less and employing them under even more horrible conditions? Doesn't that just lead to exploitation of workers who don't know that there are such things as minimum wages, as it did in the case of 7-Eleven employees?
I'm betting that it was poor wages and nasty head chefs which led to the shortage in the first place because employees don't like to be treated and paid like dirt. I think that this is the market providing and answer to the question of labour, and the answer is being yelled loudly.


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