The government is genuinely confused on wage stagnation, pulled in one direction by the hard evidence of the damage it is doing economically (and politically), and pulled in another by its neoliberal instincts. It supports the Fair Work Commission cutting penalty rates. It has slapped real wage cuts on its own public servants. So has the Reserve Bank, mere days after the RBA governor urged workers to demand higher pay rises — just like business thinks pay rises for workers are good — except in their own businesses.

But yesterday’s bizarre announcement by Employment Minister Michaelia Cash that “up to” 10,000 jobs would be created by retailers participating in the clumsily titled “Youth Jobs PaTH (Prepare-Trial-Hire)” program, with retailers getting “up to” (that phrase again) $10,000 a pop if they hire someone after a twelve week “internship”, actively undercuts wages in a sector where they are already under huge pressure from penalty rate cuts. One wonders exactly how complex retail has become that we now need “internships” in that sector.

If this indeed creates 10,000 positions, that’s less than 1% of the retail workforce, well below the quarterly volatility of employment in the sector. But it does mean, for 10,000 lucky retail workers, losing their jobs, or missing out on being hired, because retailers can have an “intern” for twelve weeks and get a handout from the government for doing so.

Remember this is the sector that is enjoying the luxury of being able to cut its workers’ wages with impunity courtesy of the Fair Work Commission’s penalty rate cuts. It’s the sector where franchisees have been found, across a number of companies, to systematically rip off their workers by substantially underpaying them. In particular, underpaying young, vulnerable workers, frequently foreign students who lack the language skills and local knowledge to obtain redress. 

And what’s the government doing to address systematic ripping off of workers by franchisees? Well it said it was going to take action, but business has successfully lobbied it to put its bill on hold.

Meantime, business is acting like nothing has changed. James Pearson of the Australian Chamber of Commerce and Industry — a serial offender in this regard — continues to attack the Fair Work Act as too pro-employee, criticises unions and complains to the usual stenographers that business is being victimised for daring to express an opinion.

Business is enjoying record profits, real wages are falling, the industrial relations umpire is cutting the wages of the lowest-paid, the government is encouraging employers to replace paid workers with “interns”, the profit share of national income has never been higher — but business still portrays itself as the victim and professes puzzlement at why the community is so hostile to it.

It’s all more evidence to voters that our economic system has stopped working for them and instead is working only for companies. The political consequences of this have only just begun, and the government is playing with fire by encouraging it.