The debate around junior pay rates for young adults has resurfaced, with calls to scrap this system entirely. This article explores the arguments on both sides, examining the potential issues with the current approach and considering possible solutions, such as gradually lowering the age threshold or increasing wage percentages over time. Drawing insights from New Zealand’s experience, the article highlights the need to ensure young workers are fairly compensated for their efforts and contributions, rather than bearing the burden of intergenerational inequity. Minimum wage and labor force dynamics are also discussed.
Challenging the Status Quo
And the traditional arrangement of hiring younger workers for less pay – even if they do the same job – is being scrutinized. However unions and some politicians claim this two-tiered “youth wage” system is redundant in the modern era, when living expenses are high, and young people need a basic decent pay.
Historically this has been because ‘Z workers are not work-ready’ and need more intensive support from their employer to develop the necessary skills. Things began to change as younger generations entered the workforce having undertaken technical training and education, frequently financed by themselves. In such cases, the “wage discount” their age may no longer be valid or reasonable.
Reconsidering the Role of the Employer
Now, of course employers offer important opportunities for young people, such as teamworking and more general life skills; but the question is does that alone justify a large wage drop? The debate harks back to the 1960s and 1970s when similar claims were made about equal pay for work of equal value, based on good reasons why women should not be paid the same as men, which never amounted to anything in the end.
A possible model for reform could be New Zealand’s elimination of the “youth wage” and introduction of a youth rate, set at 80% of the full award rate, along with a training wage. A study not long ago showed scant effect on job prospects for young workers, leading some to suggest the changes may be less apocalyptic than predicted.
Onward to Greater Equality
The push for reform is gaining momentum and there is an increasing acceptance that younger workers should not have the burden of intergenerational unfairness placed in their laps. Reducing full adult wages for younger terms of age over an extended period or increasing the wage percentages gradually could provide a more balanced approach which does not prevent young adults from being adequately compensated for what they do their part.
This is about paying people for labor, but the broader question is how we recognize and back our kids up. Exploring a junior wage structure is an opportunity to reimagine our labor market to reflect that young workers bring with them a form of diversity i.e. — different skills and experiences.
