Millions of Australians May Get Big Pay Boost From Wage Case
Synopsis
Australia is confronting a “totemic” transformation in the way young Australians are paid. Today, an 18-year-old can vote and drive but cannot make more than about 70% of the full adult wage. One of the biggest cases is currently before the Fair Work Commission, and has implications for more than half a million retail, fast-food and pharmacy workers. Unions argue that “adult costs require adult wages,” while big business has warned that pulling the discounts could result in a “collapse in employment” for the people it is intended to benefit.
MELBOURNE — A high-stakes decision that could spell the end of “discounted” wages for adults under 21 is all that stands between millions of young Australians and a major shift in their working lives, as they await word from the Fair Work Commission. The Shop, Distributive and Allied Employees’ Association (SDA) argues the current system is outdated and unfairly penalises young workers.
An employee aged 18 in retail or fast food can legally be paid just 70% of the adult rate under existing rules. This rises to 80% at 19 and 90% at 20. For workers like Ben Walker, 20, who works at a Woolworths in Victoria, the gap is increasingly frustrating. “I’m paying adult fuel on a child’s wage,” he said, noting he often has more experience than older colleagues who earn more simply because they have already turned 21. Is it time to treat 18-year-olds as financial adults in the workplace?
Business Warns of a ‘Hiring Freeze’
Major employers and business groups are sounding the alarm, arguing junior rates are the main reason many young people get hired at all. Groups such as Ai Group say the lower wages compensate businesses for the cost of training workers who are new to the workforce and may be less productive than experienced staff.
If hiring an 18-year-old costs the same as hiring a 25-year-old, businesses warn they will naturally choose the more experienced candidate. This could lead to:
• Higher youth unemployment, with fewer entry-level roles available.
• Higher prices for consumers at chains like McDonald’s, Coles and Woolworths.
• Broader economic effects, as changes to retail, fast food and pharmacy awards could flow into more than 70 other industries.
The “Equal Pay” Argument
Unions reject the claim that paying young people less is necessary for a healthy economy. ACTU Secretary Sally McManus likened the current system to the 1970s, when women were paid less than men for the same work. Similar warnings were made then, and they did not come true.
Supporters also point to a clear contradiction: at 18, Australians are legally adults. They can vote, drive, join the military and apply for a mortgage. Since there are no “junior discounts” on rent or groceries, unions argue it is discriminatory to pay adults a junior wage. Once someone reaches adulthood, they say, pay should be based on the work performed, not age.
What Happens Next?
The Fair Work Commission has finished hearing evidence from unions, businesses, academics and young workers. If it rules in favour of the unions, it would be a “totemic” win that could immediately lift the incomes of nearly 500,000 people.
Companies such as Woolworths, which already pay full rates to 20-year-olds, say any changes must be “sustainable and responsible” to avoid damaging career pathways. The commission has not yet set a date for its final decision, but for many young Australians, the outcome will determine whether they begin 2026 with a long-awaited pay rise.
Key Highlights
- The case seeks to grant full adult wages to all workers aged 18 and over.
- Some 18-year-olds currently earn as little as 70% of the adult rate.
- Business groups warn that the change could reduce job opportunities for young people.
- The ruling could eventually affect more than 70 industries nationwide.
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