The local economy could suffer if penalty rates for retail workers are cut, according to the Dubbo Chamber of Commerce.
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The Economic Impact of Penalty Rate Cuts on Rural NSW study, conducted by the McKell Institute, found retail workers across rural NSW would lose between $89 million and $315 million each year in take home pay if penalty rates were entirely or partially cut.
Chamber President Andrew Toole said the drop in disposable income would lead to reduced levels of spending within the community.
"Forced reduction in spending is never a good thing in rural communities, especially when we're already so affected by things such as weather," Mr Toole said.
"A loss of income puts enormous stress on families and that has a far reaching impact, not only economically."
However, Mr Toole said penalty rates, which compensate people for working public holidays, on weekends or late at night, are a double-edged sword.
"You don't want employers taking advantage of employees, expecting them to work without being compensated, but the businesses need to be profitable," he said.
Shop, Distributive and Allied Employees' Association NSW Branch Secretary Gerard Dwyer said rural and regional communities would be hit much harder compared to the city and local economies across NSW would be up to $111 million worse off each year if the proposed cuts go ahead.
"The recent narrow debate from employers on penalty rates has been about the cost to business. It completely misses the untold story of the loss to local workers, local communities and local economies across regional NSW if penalty rates are cut," Mr Dwyer said.
He said the cuts would result in an average loss of 4.6 to 16.5 per cent of take home pay for a low-paid retail worker.
"Penalty rates would increase the pressure on balancing already tight family budgets trying to pay for essentials like electricity and food..
"Ironically, it will be discretionary retail spending that will be among the first to feel the pinch as people spend less in their local community. Retail workers make up about 12 per cent of the workforce in rural NSW so if they tighten their belts the flow on will hit local businesses and economies hard," Mr Dwyer said.
Mr Dwyer said retail workers will lose compensation of higher pay for lost families and community time will have to try and chase more hours of work at lower pay to make up for it, leading to the loss of even more family time.
He said whichever way you look at it the families, communities and local economies of regional and rural NSW will lose if penalty rates are cut.