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Howard attempts to entrench youth wages

By Ruth Ratcliffe

The Howard government has proposed legislation which would entrench junior wages and extend them to the 200,000 workers under 21 who currently receive adult wages.

The vast majority of young workers are paid junior wages. On average, junior wages are less than half the adult wage in those occupations where they apply.

Junior wages are allowed because they are exempt from the federal Anti-discrimination Act. This exemption lapses in the year 2000.

An inquiry into alternatives to junior wages is being undertaken by the Australian Industrial Relations Commission, which is due to report its findings next year. However, the Howard government is not prepared to wait for the inquiry results. It wants its legislation through parliament before Christmas.

The government's argument is that youth unemployment is so high because youth wage levels are too high, pricing young people out of the job market. Further, the government argues that junior rates of pay reduce youth unemployment because employers will make more profits if they can pay lower wages and therefore will be willing to employ more workers.

The government has even produced "experts" to prove its arguments: Professor Dan Hamermesh was quoted in the November 22 Sydney Morning Herald saying that Australia's youth and minimum wages were high compared with other countries, and cutting them would promote jobs.

It is true that if employers are given a choice, they will pay workers as little as possible. Indeed, they would be overjoyed to do so. It's also true that no employer would turn down an offer to make more money legally and so easily, especially with a government guarantee. So, it's no surprise that they're all gung-ho for youth wages.

But it is not true that cutting wages (and increasing profits) will lead to job growth. More often than not, the extra profits are pocketed by shareholders.

If lower wage bills result in more employment, why is a bank like ANZ still closing branches and sacking staff after announcing a record $1.1 billion profit last month?

Youth wages are no solution to unemployment. Rather, they're a recipe for even greater exploitation — and impoverishment — of young workers.

Already falling incomes have contributed significantly to young workers' increased dependence on their parents. A study by University of NSW academic Judy Schneider showed that 65% of 15-17 year olds in full-time work were still financially dependent on their parents in 1994-96, compared to 11% in 1982.

Further, entrenching youth wages will have a detrimental effect on the wage levels of all workers because wage levels are built from the bottom up.

Unions have so far opposed the entrenching of youth wages. The ACTU's youth convener, Tim Ayres, has said that the arguments being used to justify paying young people less are the same as those that were used in the 1960s and '70s to deny women workers equal pay.

The Greens, Australian Democrats and Labor Party have all indicated their opposition to the proposed legislation, but they are relying on the vote of independent Senator Brian Harradine to defeat it in the Senate.

Because the government's push to entrench youth wages is just one part of its wider social and economic agenda to increase corporate profits, (all aspects of which impoverish and marginalise young people), the defeat of this bill would be an important but only initial step towards ensuring wage justice for young people.

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