The Youth Wage and Age-Base Discrimination: Rights vs Jobs

Article excerpt

The full-time youth labour market that existed until the mid-1970s has now disappeared, producing a significant decline in the average income of young people and a growing gap in wages between older and younger workers. Data on labour market trends indicate that more young Australians (16-24 years) are unemployed than any other age cohort -- 38 percent of all unemployed people in 1998 (Sweet 1998: 5-21). The implications for income poverty among 16-24 year olds have been significant.

It is in this context that elements of the Labour movement, the Democrats and others have mounted a rights-based argument for the abolition of Australia's traditional system of junior rates of pay, otherwise known as the `youth wage'. The youth wage actively discriminates against young people by ensuring that their rates of pay are determined by their age. (Currently junior rates can only be applied because of special exemptions from anti-discrimination state and federal legislation.)

It is not surprising that the Howard Coalition Government, hostile to so many other rights-based arguments and favouring a market-based approach to policy in general, has declared its commitment to the youth wage. The Coalition's own Workplace Relations Act 1996 nevertheless prohibited discrimination against employees on the grounds of age. Recognising, like its predecessor, that this created a problem for junior pay rates, the Coalition Government indicated from 1998 its legislative intention to exempt the payment of lower wages to young people from federal anti-discrimination law. As the Minister for Employment, Workplace Relations and Small Business, Peter Reith explained (1999a: 1): `.. the Government is absolutely determined to press ahead with ... our proposal to extend junior wage rates into industries which currently do not have them.'

Junior rates of pay have been a part of Australia's wage fixing system for the best part of the twentieth century. Why and how did this aspect of the labour market become a problem? What are the policy issues at stake? What does the activity of Australian governments who regularly legislate to abrogate the rights of young people demonstrate about the civic status of young people? In this paper I analyse the various arguments that have been mounted in favour of maintaining age-based discrimination in the labour market via a youth wage. I suggest that young people continue to suffer the civic status with which women and Indigenous people have struggled throughout the twentieth century.

Wage fixing principles and the `youth wage'

The Harvester Judgement of 1907 authorised the idea of a distinction between an adult wage rate given to adult male breadwinners through the mechanism of a basic wage. In his benchmark decision, Justice Higgins, the first judge of the Arbitration Court, rejected the employers' argument based on industry's capacity to pay and instead argued for `the needs principle'. Higgins found that the needs of an average family were such that a `basic wage' should be set at a level that allowed an `average family' (with a male breadwinner, his wife and three children) to purchase the necessities for `at least frugal comfort'. On the basis of this judgement, adult women, Indigenous people and young people were all deemed ineligible to receive the breadwinner's wage. At no time during the period when the needs principle dominated in Australia's wage fixing tribunals have people under 21 years of age of either sex been eligible to be treated as adult breadwinners. The youth wage became an incontestable part of the award system developed by the Arbitration Court and its successors.

From the early 1970s, however, this discriminatory principle came under attack. The rise of social movements like feminism raised significant questions about the fairness of such practices and about discriminatory methods of determining wages using age, gender, sexual orientation to deny equality of employment opportunities (Thornton 1990). …