The Fair Work Commission has announced that it will gradually abolish the discounted wage system for young workers, benefiting over 500,000 employees under 21, with some receiving pay increases of up to 42%. The new arrangement will be implemented in four stages starting this December.
Under the current system, youth wage rates apply to industries such as retail, hospitality, and pharmacies: 18-year-old employees earn only 70% of the adult rate, 19-year-olds 80%, and 20-year-olds 90%. The new policy will gradually raise wages for the affected age groups until they align with adult rates. However, the wage structure for employees under 16 will remain unchanged.
The union proposing the reform, the Shop, Distributive and Allied Employees Association, stated that many young people enter the workforce at 15 or 16 and already possess practical work experience. The current discounted system fails to reflect their labor value. The union described the move as “historic,” saying it will help improve living standards for low-paid groups and is comparable in significance to the introduction of equal pay policies in the last century.
However, the business community has expressed concern that rising labor costs could reduce employers’ willingness to hire young workers, particularly affecting small and medium-sized enterprises. Analysts suggest the measure may require trade-offs between higher incomes and employment opportunities.
The Fair Work Commission noted that phased implementation will help businesses adjust to the increased costs while ensuring a smooth policy transition. As the reform takes effect, Australia’s labor market structure and youth employment landscape are expected to undergo significant changes.