Retailers hiring junior staff in the future could be impacted if a union application to the Fair Work Commission gets approved.
This is according to the Australian Retailers Association (ARA) and the National Retail Association (NRA), after conducting a survey with retailers in response to the Shop, Distributive and Allied Employees Association’s (SDA) application to equalise junior pay rates in line with adult wages.
The SDA’s submission focuses on those aged between 18 and 20 years old working in the retail, fast food and pharmacy spaces, arguing that an adult age should equal an adult wage.
Results from the ARA and NRA’s survey revealed that 77 per cent of retailers would likely cut junior hiring if junior and senior rates were equalised. More than half (56 per cent) of retailers surveyed also said such a move would increase costs for their businesses, raising concerns these costs would ultimately be passed on to customers.
The ARA and NRA noted this is a particular concern for smaller retailers, many of which are battling to keep their business running in the face of rising wages, leasing, energy, insurance and supply chain costs.
The pair added that a significant proportion of retailers in the survey also cited the change would force them to reduce store opening hours. More than half of respondents (57 per cent) were small businesses with fewer than 20 employees.
“Retail is the single largest employer of young Australians, employing more than 500,000 workers under the age of 24 years,” ARA CEO Chris Rodwell said. “If junior rates are tampered with, the impact on already high youth employment could be dire – particularly in regional areas.”
Rodwell added that equalising junior and senior rates will narrow critical pathways into work for young Australians, “especially in small and family-run businesses that operate on tight margins and can’t absorb additional costs,” he said.
“Importantly, retail work equips young people with the skills needed to succeed in the workforce, regardless of where their career takes them. Young retail workers learn skills such as communication, teamwork and collaboration, planning, customer service and problem solving – all of which are essential general workforce skills.”
Rodwell said the current junior rates reflect lower levels of experience and are an incentive for employers to take a chance on younger, less experienced workers and provide them with the supervision and support to develop important workplace skills.
“Removing this structure would undoubtedly make it harder for young Australians to enter the workforce, meaning employers are likely to favour more experienced applicants.”
According to the SDA, employer representatives like the ARA and the NRA are using “scare tactics devoid of facts” to try to deny 18 to 20 year olds the adult wage they deserve.
The union is campaigning for workers aged 18 and over in retail, fast food and pharmacies to be paid adult wages.
The hourly pay rate for a level 1 full-time or part-time worker aged 18 years of age is $18.59 according to the latest award rates from the Fair Work Ombudsman. Meanwhile, the adult level 1 weekly pay rate for those aged 21 and above is $26.55.
According to the SDA, 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, even though they have adult responsibilities to vote and can hold a driver’s license
The SDA added that its submission does not affect the pay rates for those under the age of 18.
“When women were fighting for equal pay half a century ago, employers said it would squeeze them out of the job market – now they’re using the same tired argument about paying 18 year olds adult wages,” SDA national secretary Gerard Dwyer said.
“It wasn’t true then and it won’t be true now. Nor was it true when employers campaigned in the last decade to cut penalty rates.
“18 year olds are adults. They struggle with the same cost of living pressures as every other adult worker.
“They do not receive a discount on their rent or bills because they happen to be 18. They should be paid the same as other adults.
Dwyer added that most workers in the sector are highly experienced by the time they are 18, and most likely began their working life at 15 or 16.
“There is no justification for paying them 30 per cent less,” Dwyer said. “For some employers it’s never the right time to do the right thing.
Rodwell reverted, arguing that employers already have the discretion to make wage exceptions where higher skill levels exist amongst junior employees, claiming that many do this already.
“However, in the majority of cases, younger workers can’t compete with more experienced applicants,” Rodwell said.
“Retail has long been the place where young Australians begin their working lives, and we want to ensure those opportunities are not lost on future generations.
“When viewed alongside the waning support of governments across the nation for supporting skills development in the retail sector, the abolition of junior pay rates would also work against the Federal Government’s plans to raise productivity.”