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Thursday, 25 August 1983
Page: 280

Mr MACPHEE —My question is addressed to the Minister for Employment and Industrial Relations. I refer to the Treasurer's Budget Statement No. 2 in which , at page 23, he said:

. . . there was a large contraction in the number of juniors in employment, partly reflecting a longer-term decline in the junior labour force but mainly due to the higher susceptibility of juniors to deteriorating labour market conditions-the latter largely a result of junior wage rates which have evidently been set above the relative work value of the employees concerned.

Does the Minister agree with the Treasurer's conclusions and similar conclusions of his own Bureau of Labour Market Research? If so, what action does the Government intend to take to assist young Australians to find employment by making their wage rates more competitive?

Mr WILLIS —The change in the relativities between junior wage rates and those of adults occurred in the early 1970s and it has been argued by some that this has had an effect on the employment prospects of young people. It is true, as the honourable member said in his question, that the Bureau of Labour Market Research in its analysis of the situation did find that there was some reason to conclude, on the evidence that it was able to gather, that this could have been a factor in the change in the distribution of unemployment between younger people and those who are on full adult rates. We have to bear in mind that what is involved here is the relative distribution of unemployment.

There has been no conclusion that I am aware of by any research that there is an increase in the overall level of unemployment created by the change in relativities of youth wages and adult wages; rather, there has been a redistribution of unemployment as a result of that change in the relative wage levels of young people. I think we have to bear that fact in mind. There is the assumption that this means that there will be an overall increase in the level of unemployment as a result of the change in wage relativities. This was mentioned in the honourable member's question. In fact, I know of no such conclusion that that is the case.

As I said, the last change of any substantial nature in relativities occurred roughly a decade ago. In those circumstances we have to bear in mind that one cannot therefore say that any recent action has created that kind of unemployment problem, although the flow-on effects of what happened a decade ago obviously may have disadvantaged younger people, on the basis of the research over the last 10 years or so. At this stage we can say that any further moves to increase the relative wages of young people against those of adults would be highly imprudent. In some circles in the trade union movement I have heard suggestions that this should be done. I think it would be very unwise. The Government would certainly not support any moves to increase the relative wages of young people. On the other hand, I think that is entirely different from starting to reduce those relativities. That is a much more difficult process to undertake. The prudent step at present is to say that we will not support any further action to increase those relative wages. If that were to be done, the prospects of young people getting employment would probably be further impaired.