Key Points
- The ACTU and some individual unions are campaigning to scrap junior wages for 18 to 20-year-olds.
- Junior workers are paid a percentage of the relevant adult pay rate, which the ACTU says is “discriminatory”.
- New Zealand, Canada, South Korea and Belgium have removed or restricted sub-minimum wages for young people.
Unions are pushing to scrap junior wages for people aged 18 to 20 years old, saying the between adults only a few years apart is unfair and disadvantaging young people.
In June, union groups met in a forum organised by the Australian Council of Trade Unions (ACTU) and agreed to a range of reform proposals for junior pay rates, which the ACTU described as “discriminatory”.
The ACTU said that a 21-year-old waitress will get paid $29.04 an hour while her 18-year-old co-worker will get paid $16.26 per hour for the same job.
Joseph Mitchell, the assistant secretary of the ACTU, said that eliminating junior wages for these could help ease pressure on younger workers,
“What we want to see at the other end of this is workers who are better off, workers who are able to pay the bills and are actually able to enjoy a good standard of living as a result,” he said.
Living on the junior wage
Jenny (who requested only her first name be used) is 20 years old and has worked at Target since she was 17 — assisting customers, picking up online orders and working at the registers.
She said her current rate of pay — $31 per hour — feels adequate and she can save money. But when she started working for the company, she was paid $16 per hour.
When Jenny was 18, this rate was raised to around $20 per hour.
“It made it quite hard to save, and I was paying board and stuff like that, and it was hard to live a life outside having to work because a lot of the money just had to go to living expenses rather than saving,” she said.
Jenny said the difference in her pay as a 17-year-old and a 20-year-old doesn’t make a great deal of sense to her, as her responsibilities haven’t changed from those she was performing three years ago.
“Since I started, even at 17, I was doing the exact same role, same responsibilities and all that. Literally nothing has changed at all,” she said.
Jenny said she has seen a lot of friends leave the retail and pharmacy industry to take up other because the pay wasn’t sufficient.
“You always need retail workers, so I think having that extra just like $10, even $5 an hour would help a lot, just to keep people in the industry.”
Gerard Dwyer, the national secretary-treasurer of the Shop, Distributive and Allied Employees’ Association (SDA) said the union has multiple due to their parents having health issues.
He says junior wages aren’t sufficient for such workers to meet these challenges.
“These guys at 18 they can drink, they can drive, they can vote, they can go into the armed services. They’re an adult for every purpose in our community except their wages,” he said.
The Australian Council of Trade Unions has described junior wages for adult workers as “discriminatory”. Source: Getty / Kobus Louw
How much are junior workers paid in Australia?
From 1 July, the national minimum wage for employees who are 21 years old and over is $24.10 per hour — or $30.13 for casual workers.
Junior workers (workers under the age of 21) are paid a percentage of the relevant adult pay rate.
Some awards, enterprise agreements or other registered agreements may not have junior rates, in which case junior workers are paid the same as adult employees.
But 75 awards do have junior rates, including those covering fast food, hospitality and retail workers.
The percentages that apply are usually based on the employee’s age and increase on their next birthday.
Under the age of 16, workers will make around 36 per cent of the national adult minimum wage — or $8.87 per hour. With 25 per cent loading for casual workers, this comes to $11.09.
By 18 years old, workers will make $16.46 per hour, or $20.58 for casual workers, and 20-year-olds make $23.55 or $29.44 for casual workers.
How are young workers paid in other countries?
New Zealand, Canada, South Korea and Belgium have removed or restricted sub-minimum wages for young people entirely or for young people 18 and over.
In New Zealand, junior rates were abolished in 2008, but then in 2013, a new ‘Starting Out’ wage was introduced that pays young workers who have less than six months of continuous employment with an employer 80 per cent of the full adult minimum wage.
In Canada, all provinces pay people under 18 the same adult rates, except in Alberta and Ontario, where workers under 18 are paid 85 to 95 per cent of the adult minimum wage.
Industry pushback
There has been some industry pushback against the union-led campaign.
The Australian Retailers Association (ARA) said the SDA’s bid to abolish junior rates for workers between 18 to 20 years old has been launched “without any industry consultation”.
ARA chief executive officer Paul Zahra said changes to wage structures need to be carefully considered to ensure sustainable outcomes for employees and employers.
“Junior rates are used to incentivise employment of young people who are less skilled, giving them an entry point for their careers,” he said.
“Without these rates, these young people may otherwise struggle to compete against older, more experienced applicants.”
Angela Knox, management professor at the University of Sydney Business School said that junior wages were first introduced to encourage employers to provide opportunities to younger workers.
“It does provide a pathway and an entry point for younger workers to gain experience in organisations and perhaps create that first foothold for them, which can be difficult to obtain when they’re relatively young,” she said.
“However, on the flip-side, you could certainly say 18,19,20-year-olds aren’t as inexperienced as 15,16, 17-year-olds, and perhaps that is then a point at which they should be considered adults.”
Seventy-five awards have junior rates in Australia, including those covering fast food, hospitality and retail workers. Source: Getty / The Photo Commune
Mitchell said that while much of the debate around junior workers’ wages has been framed around the burden of taking on young employees, they should be considered an “asset”.
“They’re energised, they’re enthusiastic, they’re hungry and they want to contribute a lot. And what junior rates do is deeply under-value that hunger and that contribution,” he said.
The Fair Work Commission’s decision
Dwyer said the case for scrapping junior wages for workers aged between 18 to 20 will be heard by the Fair Work Commission through 2025 after employers file their reply to the unions at the beginning of next year.
“This is a long road and as we talk to our young members, they understand that, but they’re determined to bring about a change for those who come behind them — to change what is an unjust application of age,” he said.
Mitchell said that while many employers pay above the junior pay rates, the ACTU will continue to push for a change to the laws.
“There are too many young workers who get paid far below the minimum wage who have to work harder and longer just to make ends meet,” Mitchell said.
“A young worker who’s 18 has to work 50 hours to get the same full-time wage as an adult and it’s deeply unfair and needs to change.”
