Youth Wages Suck!

April 24, 2009

Business doesn't want to rip off young workers. We have deputy Prime Minister Julia Gillard's word for it.

On April 21, Gillard told the media: "I would note that I've never had a business person in this country say that they thought this nation's economic prosperity should be based on ripping off young Australians."

But if Gillard hasn't heard a business person say this then its because they don't need to — they know the federal government is committed to policies that make ripping off young workers legal. Youth wages are a case in point.

Gillard told ABC Radio the same day:"People of course do support youth wages regimes and we've kept the youth wages regime".

Ripped off

Youth wages simply mean young people are paid less for the same work as older workers.

Recent experience shows that businesses are ruthless in trying to find ways to best rip off young people.

In 2007, the NSW-based Chili's restaurant chain was found to have underpaid 27 of its young workers by the amount of $45,000.

The Workplace Ombudsman alleged the chain forced workers to sign individual contracts, made workers attend before their rostered start time without pay, and even made workers pay the bills of customers who left without paying.

In February, Saya Cleaning, an Adelaide cleaning company, was fined $288,000 for paying nothing at all to two young workers for a total of 45 shifts.

Business has an interest in ripping off workers where they can. The less they pay in wages, the more profit they can make.

Young workers are especially vulnerable and prone to being exploited. In many cases this is because young workers aren't represented by unions who will fight attacks by employers.

With Australia entering a recession, the plight of young workers will become worse.


An April report by the Organisation for Economic Co-Operation and Development (OECD) found people aged between 15 and 24 will be unduly affected by the economic crisis.

The youth jobless rate is set to rise twice as fast as adult workers.

The OECD report said: "The key priority for the coming months should be to avoid the build-up of a large pool of youth at risk of becoming long-term unemployed".

But the problem, says the OECD, will be made worse if young workers get a fair wage!

"Care should be taken to avoid discouraging bargaining at the workplace level and pricing low-skilled youth out of entry-level jobs", the report said.

The OECD urged the government to bring back the individual contracts allowed under John Howard's hated Work Choices laws because they "increased the labour market competitiveness of low-skilled youth".

So, the theory goes, if young people are just paid less and give up even more their conditions, more of them will get jobs!

The OECD's proposals are part of the standard mantra of capitalist economics. Young people must work for less if they expect employers to give them a job.

In Australia, the youth unemployment rate is 9.4%, well above the overall unemployment rate of 5.7%. In Wollongong, however, youth unemployment is approaching a frightening level of 40%.

Race to the bottom

Scrapping youth wages will increase the living standards of young people and will even help "stimulate" demand in the economy.

The only "problem" with ending youth wages is that it would eat into the profits of big business, and protecting big business profits seems to be holy writ for this government.

However, beyond this, if the market is failing to offer young people employment, then this "market failure" must be solved by the government through a policy of positive job creation, and direct public investment.

Especially in the face of the climate emergency, the government should embark on a program to train a generation of young people to work in sustainable, green industries.

If nothing is done to transform our economy and move away from burning fossil-fuels young people will inherit a world ruined by runaway climate change. What better way to resolve youth unemployment than to give them the means to help avert one of the biggest threats facing humanity?.

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