It’s hard being young in today’s economy. Rising house prices lock increasing numbers of young people out of homeownership, while those lucky enough to have entered the housing market are now struggling under high interest rates. For many, university is more expensive than ever, and the time taken to repay HECS debts just keeps rising.

But what is often ignored is that young people, including many adults, are also directly discriminated against by Australian employment law: they can be legally paid less for the same work under the ‘junior rates’ system.

Junior rates make a real difference to young Australians’ standard of living. Consider an 18-year-old having just left home and renting: at the time of writing, the average asking rent for a two-bedroom unit in Sydney is about $727 per week, or $363.5 per bedroom.

If this young adult moves into this average rental and works casually in retail, they can be legally paid as little as $22.45 per hour, while someone over 20 years old is entitled to $32.06. It will take this young worker 16.2 hours (or over two 8-hour days) just to pay rent, almost five hours longer than someone over 20 years old.

Even if the 18-year-old somehow manages to only work on Sundays and receives penalty rates, they would need to work at least 11.6 hours to pay rent, still more than someone over 20 who works weekdays (11.3 hours).

This is even worse for young people working in fast food, another industry that commonly employs young people. These young workers have lower penalty rates on Sundays, and casual workers under 16 can be paid as little as $14.43 per hour. Junior rates force younger workers to make a difficult choice: work longer hours or live in cheaper, lower-quality housing in less convenient locations.

Junior rates currently form part of Australia’s industrial relations system. While this system mandates minimum wages across the economy, many of these minimum wages include junior rates that allow for lower pay for staff under 21 years old. This means that even after a young person turns 18 and becomes an adult, legally allowed to vote, drink, smoke, serve on a jury and be deployed to fight in a war, they can still be paid less than other adults. Workers under the age of 18 are also not guaranteed superannuation contributions unless they work 30 hours a week.

Almost 9 in 10 workers under the age of 18 (87%) are on junior rates, and about one in three young adult workers (34% of 18-20-year-olds) are on junior rates. On an economy-wide scale, junior rates result in significantly lower pay for younger workers. Research from the McKell Institute estimates that each year, young Australians collectively earn $3.5 billion less in wages compared to what they would have earned at adult rates.

Other countries have moved away from junior rates towards directly experience-based criteria. For example, in New Zealand 16- to 19-year-old workers can be paid a ‘starting-out’ minimum wage if they do not yet have six months experience with a single employer. Despite this phase out, New Zealand has had broadly similar levels of youth unemployment as Australia over the last decade.

The Australian Council of Trade Unions has called for an end to junior rates for adults, however, the Albanese Government is yet to act. If the Albanese Government takes its  ‘Same Job, Same Pay’ slogan seriously, it’s time to stop businesses discriminating against young workers solely because of their age.