The Australian Council of Trade Unions (ACTU) has endorsed a policy aimed at addressing the inequities in junior rates of pay. 

The initiative seeks to create a fairer work environment for young Australians, many of whom currently receive significantly lower wages compared to their adult counterparts despite performing the same tasks.

Under existing regulations, junior workers are often compensated with a percentage of the adult pay rate as stipulated in various awards. 

If an award does not specify junior rates, these young workers receive the same wages as adults. 

Currently, junior rates are applicable to 75 different awards, notably affecting industries with high concentrations of young employees, such as fast food, retail, and hospitality.

The disparity in pay rates has significant financial implications for young workers struggling with the rising cost of living. 

For instance, an 18-year-old waiter earns only $16.26 per hour, while a 21-year-old in the same role makes $29.04 per hour. 

This gap forces younger workers to work more hours to achieve a full-time adult wage. Currently, an 18-year-old retail worker must work over 50 hours a week to earn an adult's full-time salary.

In comparison, other countries handle youth wages differently. 

In New Zealand, workers aged 16 to 19 earn 80 per cent of the minimum wage for the first six months before moving to the full rate. 

In Canada, most provinces have eliminated youth rates, with students under 18 receiving between 85 per cent to 95 per cent of the full minimum wage in Alberta and Ontario.

The ACTU also highlights the issue of low apprentice wages. 

Union representatives argue that apprentice wages, already minimal, should not be reduced further. 

Additionally, they urge the government to tackle exploitative training practices and end ‘sham traineeship’ arrangements, where employers exploit young trainees for cheap labour while providing inadequate training.

The ACTU is calling for the elimination of unpaid internships and student placements, which it argues contribute to economic insecurity among young workers. 

The union also criticise the current superannuation system that excludes workers under 18 unless they work over 30 hours a week, advocating for changes to ensure even young workers can benefit from superannuation contributions early in their careers.

“Young people don’t get discounts on their rent or youth grocery bills, so why should they get youth wages?” asked ACTU Secretary Sally McManus.

“Eighteen-year-olds have the same social and legal responsibilities as other adults and deserve the same minimum pay rates. 

“The cost of living and housing disproportionately falls on young workers. Wage discrimination in the forms of youth wages, discriminatory super rules, and forms of unpaid work such as internships, are compounding economic insecurity for young people. 

“The cards are already so heavily stacked against young workers. It is unfair for them to have to work harder and longer to pay the same bills as other adults.”

However, the proposal has met with opposition from employer groups. 

Innes Willox, Chief Executive of the national employer association Ai Group, argued that removing junior and apprentice pay rates could harm the job prospects of young workers. 

“The union push to abolish junior and apprentice pay rates is a short-sighted plan that will hurt the very workers they are trying to help,” he said. 

“Younger workers already face more than double the unemployment rates of other workers, and in the currently weakening labour market youth unemployment has risen much faster than the national average.”

Willox further noted that the Fair Work Commission and the Productivity Commission have consistently upheld the necessity of junior rates, which provide an essential incentive for employers to hire young and inexperienced workers. 

“There are 526,000 employees on junior rates and 236,000 on apprentice rates in the economy. They overwhelmingly work in industries which are currently struggling the most such as retail, accommodation & food services and construction,” he said.

Willox also cautioned that altering apprentice wages could undermine the ability of employers to offer these training opportunities, which are crucial for developing a skilled workforce. 

“Such a fundamental change to our workplace relations system would create a major barrier to delivering the workforce the skilled people that our economy needs. It would undermine a crucial pathway to well-paid and rewarding careers for younger workers,” he said.