Union bid to abolish youth rates risks ‘pushing young people out of retail’

(Source: Bigstock)

The Shop, Distributive and Allied Employees’ Association (SDA) – the retail and fast food workers’ union – has launched a case to abolish junior rates for workers, which retailers believe will pose challenges for young people getting their first job.

The SDA is seeking to ensure workers 18 and over in retail, fast food and pharmacy are paid the full rate, the Australian Financial Review reported.

Under existing policies, an 18-year-old is paid 70 per cent of the adult wage and a 19-year-old is paid 80 per cent. Workers aged 20 and over get the full adult rate in the retail sector, while fast-food and pharmacy workers do not get it until 21.

According to the National Retail Association (NRA), junior rates incentivise young entry-level workers with little to no experience to start their careers in retail. The removal of such rates will risk “pushing young people out of the retail labour market”, it added.

The Australian Retailers Association (ARA) shared a similar opinion, stating that young people may struggle to compete against older, more experienced applicants without these rates.

The two associations also expressed their concerns about the impact of this change on retailers amid the current labour shortage crisis and high labour costs.

“Abolishing junior rates will exacerbate both issues, creating a situation in which both retailers and their current and potential employees lose,” said the NRA.

“Many employers in the retail, fast food and pharmacy sectors are small businesses – mum and dad operators – who are severely challenged and simply can’t afford another wage hike,” added ARA CEO Paul Zahra.

He said industry must be consulted on proposed changes of this nature and that he was “disappointed” about the lost opportunity to have input into this proposal.

The case is expected to take about a year, with evidence from worker witnesses and economists. Any changes are expected to be phased in over several years.

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