Should the Youth Wage be Abolished?

In Australia, the Age Discrimination Act 2004 prohibits discrimination against persons on the basis of their age in a range of areas of public life including in employment. However, there is an exception in respect of the payment of a lesser wage to workers who are under 21. There is now growing public pressure for that exception to be abolished. This page deals with the youth wage and the debate around whether it should be abolished.

Prohibition on age discrimination

Section 18 of the Age Discrimination Act 2004 prohibits employers from discriminating on the basis of age when offering a person when determining:

• the arrangements made for determining who should be offered work
• determining who should be offered work
• payment or remuneration for work.

It is also unlawful to discriminate on the basis of a person’s age when determining:

• the terms or conditions of employment
• by denying or limiting opportunities for promotion, transfer, training or other benefits
• by dismissing the employee
• by subjecting them to any other detriment.

The Act provides for several exceptions to this prohibition on age discrimination in employment. These are where the employment is for domestic duties within the home, where the inherent requirements of the job mean it is not possible for a person to do the job because of their age, or where the person is younger than 21.

‘Youth wages’ exception

Under section 25 of the Age Discrimination Act 2004, there is an exception to the prohibition against discrimination in employment on the basis of age in respect of the payment of a ‘youth wage’ to a worker who is under 21. This exception allows employers to discriminate on the basis of age in respect of a young worker when determining:

• the arrangements made for determining who should be offered work
• determining who should be offered work
• payment or remuneration for work.

Rationale for the ‘youth wages’ exception

The rationale for the ‘youth wages’ exception is that young workers are less ready for work and require additional training and support. It is also argued that young people find it harder to find employment and that the ‘youth wage’ exception gives employers an incentive to hire young people, giving them work experience that will be valuable to them in the future.

Awards and ‘youth wages’

Not all employees who are under 21 are paid a lesser wage than their older counterparts in Australia. Under some industry awards, all workers over 18 are required to be paid the same wage for the same type of work. However, under the Retail Industry Award, the Fast Food Industry Award and the Pharmacy Industry Award, workers below 21 are paid a lesser rate for the same work.

The Shop, Distributive and Allied Employees’ Association has applied to the Fair Work Commission to change three of the Awards, removing junior rates for workers between the ages of 18 and 21.  

Criticisms of the ‘youth wages’ exception

The ‘youth wages’ exception has been criticised as discriminatory and as contrary to the principle of a fair day’s wage for a fair day’s work. Opponents of the youth wage argue that employers take advantage of it without providing with any additional training or support, and that many young workers do not in fact have a lower level of skill or experience.

Opponents of the youth wage also point out that many young adults have significant responsibilities, incur just as many cost-of-living expenses as older people, and that the youth wage contributes to generational inequity. It has been observed that the economic impact of abolishing the youth wage could be relatively small. A parallel has been drawn to the ‘equal pay for equal work’ campaign of the 1960s and 1970s, which called for women to be paid the same as men, claimed that doing so would lead to economic problems, which never eventuated.   

The Australian Council of Trade Unions (ACTU) has voiced its opposition to the youth wage and its intention to lobby the government to legislate for change. The Greens have also expressed support for abolishing the exception.

Other jurisdictions

In New Zealand, the youth wage was abolished in 2008. It was replaced with a ‘first job’ wage, under which workers in their first paid employment position may be paid a training wage of 80% of the full rate. Belgium, South Korea and most Canadian states have also abolished the youth wage.

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