Union campaign against junior pay rates out of touch with economic reality

At a time when record numbers of small businesses are collapsing, the ACTU and SDA's relentless campaign against small business owners shows contempt and complete lack of empathy for what they're going through.

Here are some facts to start with: small business owners work longer hours, spend more time doing unpaid work and take home less pay in this current economic climate than their own employees.

The Australian Small Business Ombudsman reports 75 per cent of small business owners made less than the average Australian despite clocking in more time at work. The Small Business Matters report also found 43 per cent of small businesses were making zero profit, the worst rate since 2012.

Small business owners don't get sick leave, maternity leave, penalty rates, or a minimum wage. What they do get is extra admin and more pressure to dip into their business coffers and take home pay to pad the pay packets of their employees. One study found the average business owner wasted an incredible 81 days on admin alone.

Who is getting exploited here? Consumers aren't spending, and the price of doing business grows by the day. The cost of labour aside, there's also inflation-affected materials, utilities, and insurance to pay for. Meanwhile, the government is ruthlessly pursuing small businesses over tax debt which had been put on hold since COVID.

The problem is many businesses haven't recovered since the pandemic since conditions have steadily gotten worse.

Though the government claims to back small business, its campaign of terror against SMEs suggests otherwise. Taking the advice of unions over small business owners is misguided, to say the least. One is Australia's biggest employer responsible for hiring 5 million people or over 42 per cent of the private sector workforce. The other is an increasingly irrelevant lobby group with dwindling membership.

The number of non-employing businesses has risen by 2.3 per cent, the ABS says. One does not need an economics degree to see why. In an alternate universe where common sense prevails, it is understood there's a hierarchy in the business world and it exists for a good reason. This isn't about exploitation, it's about a mutually beneficial arrangement where young people are hired at competitive wages so they can gain a foothold into the working world while businesses keep their costs down.

In this exchange, business owners are happy to give young people the opportunity to gain experience and develop skills to get them on their way to earning a higher wage. Scrapping the youth wage would mean young workers will no longer be able to compete with older, seasoned workers. Why would a business owner hire them if they could get someone who already knows the ropes for the same wage? It is like they are sabotaging the the youth and disguising it as if they care.

In this scenario everyone stands to lose: young people miss out on the universal process of climbing the ladder and gaining qualifications as they seek to earn higher pay. Businesses will be forced to pay workers more money to do basic junior work. This will push up the cost of goods and services and likely trigger more businesses to cease trading. Paying juniors a higher rate may give youth a false sense of security in the short term but will take away their motivation to work hard and aspire to bigger and better things.

Many of the businesses affected will be in the struggling retail and hospitality sectors which traditionally employ youth workers. Unions might think this campaign will get them in the good books of an entire generation of young employees but when entry level positions dry up and employers can no longer afford to offer on-the-job training, they may think twice.

This fiasco is yet another example of how little they know about how the small business economy works, and it's even more concerning the government is playing along as well. To give unskilled, inexperienced young people the same wages as someone who has completed a diploma, an apprenticeship or a degree is frankly insulting.

Youth wages have nothing to do with taking advantage of young people, as they get paid well enough in Australia. The real people being exploited here are small business owners who can't seem to catch a break as the political punching bag of the day. With the 3.75 per cent minimum and award wage hike already set to commence on July 1, another wage increase will certainly have a negative ripple effect in the economy.

The thousands of mum-and-dad small business operators will look on while the government and unions mislead young people into believing they can do less and get paid more with no consequence.

And they'll be there to pick up the pieces when those in charge finally realise a robust economy requires workers to have actual incentives to work.