Young people could get a massive pay boost in a 'totemic' wage case, but businesses warn it could cause a collapse in employment.
Hardworking young people are eagerly awaiting a key wage case that could significantly increase their pay, while businesses are concerned it might lead to a decline in hiring.
'Junior pay rates' apply to individuals under 21 in agreements covering sectors with a high number of young employees: retail, fast food, and pharmacy.
These discounts result in 18-year-olds receiving 70% of the award rate, 19-year-olds getting 80%, and 20-year-olds earning 90%.
Ben Walker, a 20-year-old working at a Woolworths supermarket in Sale, Victoria, for the past four years, highlights the unfairness of the situation.
"I have a car, I pay rent, and I have a motorbike. Despite this, I'm still earning a child's wage," he said.
The high staff turnover in supermarkets often means Walker works alongside less experienced colleagues who are over 21.
"I don't think it's fair," Walker added, "considering I've gained more experience, yet I'm still paid less."
Some of Australia's largest and most public businesses are worried about the impact of this case, which they've dubbed 'totemic', on the employment structure.
Many big employers, like McDonald's and Coles, serve as stepping stones to full-time employment, with Woolworths alone providing jobs to about one in eight Australians.
Ai Group's Innes Willox, representing employers, warns that any significant shift increasing staff costs will have dire consequences for young people.
"If there are substantial changes, it becomes incredibly challenging for employers to hire young people," Willox stated.
"Young people won't be hired for jobs, and that will harm them and the workforce and economy."
Willox argues that the compensation businesses provide to employees is based on their capabilities and contributions.
"Their output, their contribution to the workplace, and the fact that they are new to the workforce, learning new skills, are all factors considered," Willox explained.
"This is often the first step into the workforce for young people."
Unions argue that a similar argument was used when women were paid less than men for the same work.
Sally McManus, secretary of the Australian Council of Trade Unions (ACTU), compared the cheaper rates paid to juniors and employers' fears of change to the situation over 50 years ago when women's lower pay for equal work was outlawed.
"Employers argued that if women were paid the same, there would be fewer women in the workforce, and they would hire men instead," McManus said.
"But that turned out to be untrue."
Australia has seen record-high workforce participation rates in recent years, with both men and women working at unprecedented levels.
Adulthood is legally defined as 18, but full wages only start at 21.
Advocates argue that at 17, one can enlist in the armed forces and at 18, individuals are legally entitled to vote, drive, smoke, and drink alcohol.
However, youth wages continue to limit the earnings of those under 21.
Decades ago, some of these rights didn't begin until age 21, but that has been reversed.
McManus believes changing wage laws would align with reality.
"In the 1970s, 21 was the legal adulthood for many things, and we got rid of that," she said.
"We made 18 the age of adulthood for everything except pay.
"There should be a clear line drawn regarding when someone becomes an adult, and adults should be paid the same."
Societal trends have also shifted, with more people completing higher levels of schooling compared to 20 years ago.
In 2021, 58.4% of people aged 17 and over had completed Year 12, up from 39.1% in 2001.
Half a million workers could be affected by this case.
The Shop, Distributive and Allied Employees' Association (SDA) represents supermarket workers like Ben Walker and brought the case to ensure that anyone aged 18 or older receives the adult rate of pay.
SDA national secretary Gerard Dwyer stated, "It's about ensuring that anyone aged 18 or older gets paid the adult rate of pay."
The Fair Work Commission's full bench heard evidence in October and November, aiming to vary three broad agreements covering working conditions in entire industries.
If successful, junior wages would be changed for workers under the General Retail Industry Award 2020, Fast Food Industry Award 2020, and Pharmacy Industry Award 2020.
These agreements cover almost half a million young people, but the application could expand further.
If the union wins, around 70 other awards with provisions allowing employers to pay younger people less will likely be challenged and changed.
"We hope that a positive outcome for young Australians here will lead to better pay for other young workers who deserve adult rates of pay once they turn 18," Dwyer added.
This case is significant for several reasons.
The SDA has been controversial in the union movement due to accusations of cozy deals with big employers under former leadership and using union funds to campaign against abortion access and marriage equality.
Businesses and unions dispute the potential impact of a change, with Ai Group's Willox arguing that it would be substantial.
"You can't pay a 16-year-old the same as a 21-year-old with five years of experience, who is more productive, skilled, capable, and able," she said.
The SDA clarifies that the claim does not seek to change rates for 16 or 17-year-olds.
Woolworths, in a statement, expressed pride in being one of the nation's largest employers of young people.
"The junior pay rate system has been crucial in promoting and incentivizing employment opportunities for young people for decades," a spokesperson said.
Woolworths pays the full adult rate from age 20, rather than 21, and pays supervisory roles at adult rates.
"While Woolworths is committed to paying its junior team members above award rates under its retail enterprise agreements, any changes to junior pay rates must be introduced sustainably and responsibly."
The supermarket calls for a balance between customer value and 'career pathways' for young people.
McManus from the ACTU believes it's a matter of fairness for hundreds of thousands of hardworking young people.
"Consider those workers," she said.
"They don't get discounts on rent or at supermarkets; they pay full amounts."
"This change will significantly impact them, and it's about time."
Hearings before the Fair Work Commission have concluded, allowing academics, employers, peak bodies, and workers to express their views.
The decision is pending, and no release date has been set.
