According to the Howard Government, young people should be grateful for being paid peanuts. The “youth wage,” it claims, gives them a foot in the door and reduces unemployment. But does it create jobs or slaves?
International labour standards and human rights conventions prohibit workplace discrimination on various grounds, including age. Similarly the Australian Industrial Relations Act (1988) outlaws unequal treatment on this basis. However “junior rates” of pay are exempted from this legislation. An estimated 50% of workers under 21 years old are employed on these depressed rates — the retail, food and clerical industries being the largest employers of teenage labour.
Since the late 1980s, there has been a significant decline in the average real incomes of 15- to 19-year- olds. Overall, junior wages, in relation to adults’, has dropped from 55% to 47%. In some cases, young full-time workers receive as little as $180 per week!
Equal pay not good for business. In 1999 the Australian Industrial Relations Commission (IRC) launched an inquiry into junior wages with the aim of preparing a report on the “feasibility of replacing junior rates with non-discriminatory alternatives.” The commission heard oral presentations from large retail chains, such as McDonald’s, whose workforces are predominantly teenaged. The Master Plumbers and Mechanical Services Association of Australia, which covers employers of young apprentices, told the inquiry that wage increases would add to industry costs and would have to be “recovered from customers” through higher prices. The then Minister for Employment, Workplace Relations and Small Business Peter Reith was not prepared to wait for the results of the IRC inquiry and proposed a Youth Employment Bill which would enshrine junior rates.
The Howard Government argues that wage increases contribute to high levels of unemployment. This is a fallacy. Information from almost every country in the world shows no direct relationship between low wages and employment growth. For example, a study done in 2001 revealed that Spain had the highest official unemployment rate in Europe (more than 50% among youth), yet its wage levels were 20% less than most European countries.
If lower wages and higher profits create jobs, then why are big companies, like banks, sacking workers after announcing record profits! The main contributor to unemployment is the quest for profits in our highly competitive economic system. Companies must constantly strive to reduce production costs by lowering wages and investing in labour-saving technology. They do this by cutting their workforces and making them work harder, for less.
Junior rates not only mean low income for young people, they also keep all wages down. With the threat of being replaced by cheaper labour, many older workers accept lower wages. So the younger generation competes with their parents for jobs!
All working people are short-changed. The push to entrench the youth wage is part of the Government’s wider social and economic attack on young people. Howard has also tightened the screws on welfare payments for the young. Policy initiatives, such as Work-for-the-Dole, the Common Youth Allowance which makes young people dependent on their parents, and cuts to employment training programs have all made life harder for young people who are studying or out of work.
Howard has described the family as “the natural welfare unit.” This ideology forces many people — working, unemployed or studying — into economic dependency on their families. By undermining young people’s independence, it subjects them to problems hidden within the nuclear family, such as domestic violence and sexual abuse. For their parents, it prolongs an economic responsibility they can ill afford.
Real jobs and wage justice for everyone! Approximately one in four young people are unemployed. Unemployment figures released by the Government in March show a significant rise in youth unemployment since November. In all states, it hovers around 25%. Queensland and Tasmania are the highest, at 27.3% and 39.6% respectively. The problem is not a lack of work that needs to be done or young people’s inability to do it. Work-for-the-dole schemes, such as the rejuvenation of degraded land, illustrate this. But these jobs should pay real wages and offer real futures. To solve youth unemployment, there needs to be a massive creation of socially useful jobs — and employment must be by choice, not coercion.
The Howard Government’s youth wage traps young people into chronic poverty and sets an unlivable benchmark for working people of all ages. A trade union campaign for equal pay for work of equal value would lift young workers out of the abyss. It would advance the struggles of all workers whose pay packets have never matched those of their straight, white, male, able-bodied counterparts. This would bring us together in the ultimate fight for wage justice — an end to the profit system.