JENI O’DOWD: Paying kids more in their after-school jobs, as the ACTU wants, will backfire badly

Jeni O’Dowd
The Nightly
Getting a job while still at school is a rite of passage for young people in Australia. But the ACTU’s demand for the abolition of junior pay rates will ruin us.
Getting a job while still at school is a rite of passage for young people in Australia. But the ACTU’s demand for the abolition of junior pay rates will ruin us. Credit: The Nightly

When my daughter turned 15, she landed her first job at a fast food restaurant, where she was paid the princely sum of $11 an hour.

After a few months and with customer service experience under her belt, she changed jobs (she is Gen Z, after all), earning $13.70 an hour at a local restaurant.

A few months later, she changed jobs yet again because she wanted something closer to home and one where she would get tips. She left a little while later when she entered her HSC year.

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I’m unsure how her managers in those three jobs who trained her felt about her decision to leave after such a short time, but I reckon they were used to it. And despite the low wage, my daughter saved enough from her part-time work (the tips certainly helped) to buy a second-hand car.

My friend’s daughter managed a few shifts at a restaurant after turning 15. But she kept declining shifts as they interfered with her weekends and was actually surprised when she lost the job.

waitress, taking orders, outdoor dining
Our very first after-school job is a rite of passage as young Australians and gives us so much. Credit: icsilviu/Pixabay (user icsilviu)

Getting a job while still at school is a rite of passage for young people in Australia. They quickly learn what it’s actually like to do real work and the value of money. Do I really need that $10 Boost juice after it took me nearly an hour to earn the money to pay for it?

So, it was with great interest that I read the ACTU’s demand for the abolition of junior pay rates for more than half a million 18- to 20-year-olds working in the fast food, pharmacy, and retail sectors and an increase in the hourly rate for workers under 18.

Under current workplace rules, employees younger than 21 are not paid the total rate across the General Retail Industry Award, Fast Food Industry Award, and Pharmacy Industry Award.

Those aged 20 are paid 90 per cent of the award rate, 19-year-olds receive 80 per cent, and 18-year-olds get 70 per cent.

The union’s bid seeks to lift the pay rate of this cohort to the full award rate. For workers under 18, the proposal argues that 17-year-olds should receive 75 per cent of the award rate, up from 60 per cent, while workers 16 and under should receive half the award rate, up from 45 per cent.

In today’s economic climate, with the jobs market deteriorating and a 3.75 per cent minimum and award wage increase already slated to start on July 1, this is not only a tough call but incredibly bad timing.

A few days ago, The Nightly reported some of Sydney’s top restaurants are shutting their doors, victims of the ongoing cost-of-living crisis. They’ve also blamed the looming workplace regulations as part of the reason for their decision.

And, not only is the rate of insolvencies for hospitality businesses already at a five-year high, they are expected to accelerate.

So there is no doubt any move to increase junior wages across the board would hit both big and small businesses hard, with mum-and-dad operators already severely challenged.

As I said, incredibly bad timing.

Australian Retail Association boss Paul Zahra argued the change to junior pay rates would hurt young people seeking their first job.

“Junior rates are used to incentivise employment of young people who are less skilled, giving them an entry point for their careers,” Zahra said.

“Without these rates, these young people may otherwise struggle to compete against older, more experienced applicants.”

Well, yes — to a point. I don’t think “older, more experienced applicants” are queuing up to turn hamburgers at McDonald’s or polish glasses at the local restaurant. Those types of jobs are reserved for very young workers.

A waiter carries a burger.
As much as abolishing junior pay rates could make hiring first-time young workers a boon for some employers, but ‘older’ applicants aren’t lining up to do these jobs. Credit: Dan Peled/AAP

But after the ages of 18 and 19, young people have left school and have a few years of work experience under their belts. Some are even supervisors by this point.

So why shouldn’t they get the same pay? We don’t live in a utopia where everyone is supported by their parents. Many young people are out on their own, struggling to pay rent and buy food. The cost of living does not discriminate.

So here’s where the ACTU got it wrong. Apart from the ill-thought-out timing, increasing the rates for 15, 16, and 17-year-olds is unnecessary in today’s tough economic climate when employers already provide opportunities and training.

The argument for boosting the wages of those over 18 is valid. However, considering the potential impact on small businesses, perhaps a phased approach to increasing junior pay rates should ensure that young workers are fairly compensated while giving businesses time to adjust.

The ACTU, in its usual chest-beating way, is trying to do too much at once. A more measured approach focusing initially on raising rates for those 19 and older would respect the learning curve that junior jobs provide, without placing undue strain on the very businesses that offer these crucial first opportunities.

The goal should be to support young workers in gaining both fair compensation and invaluable experience, ensuring they are prepared for the future without destabilising the present.

Plus, it might give my daughter a bit more incentive to stick with one job — at least for a little while longer.

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