Saturday, May 2, 2009

At a Minimum

I was talking to one of my honours students the other day. She told me that she would soon have more time for her thesis project because she was losing her job as a waitress. I asked why. She said, "oh, you know, I'm turning 21." As if that explained everything! I reminded her that I am an American eager to know more about Australia. Well, it turns out that when she turns 21 the employer must pay her more, and because of that, they will make up the excuse that slower business means that she is no longer needed. The student didn't seem particularly bothered by this. Indeed, when I checked with other students, as well as some Aussie colleagues, they all gave me a look of "well, of course!"

So, I did a little research and discovered that there are in effect several minimum wages in Australia. With the exception of certain professions and union agreements (and that covers quite a few people), the standard Federal Minimum Wage (FMW) is $14.31 per hour, or $543.78 per week. [As a comparison, on July 24th this year, the U.S. minimum wage will increase to $7.25 per hour, or $9.82 per hour in Aussie dollars].  However, people under 21 are considered 'junior employees' in Oz, and thus are not entitled to the full FMW:
A junior is any employee who is younger than the age set down in an award, or in other industrial instruments, defining adult (or senior) employment status - typically this can be an age between 18 and 21 years. Most awards and agreements set different wage rates for each age group up to senior status.  Usually a junior would receive a percentage of the appropriate minimum adult rate. source here
An example of these percentages from the Queensland web site are: 
  • 17 years and under or 1st year of experience as an apprentice: 55% of FMW
  • 18 years or 2nd year of experience: 65% of FMW
  • 19 years but less than 3rd year of experience: 75% of FMW, etc.
I find this all a bit strange.  Why should a 20 year old who starts working at a coffee shop on the same day as an 18 year old be paid $4-5 more an hour, simply because she is older? (By the way, "years of experience" only apply to special apprenticeships).  And, surely the common practice of sacking people when they turn 21 must raise some eyebrows in union and government offices?

I think being a small business owner in Australia must involve a lot of bureaucratic frustration. And I belong to a union!  (More on that later).

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