Abolishing junior wage rates would significantly reduce retail employment opportunities for young Australians, and many small businesses say it would force them to select more experienced workers, according to new research from industry bodies.

The survey, commissioned by the Australian Retailers Association (ARA) and National Retail Association (NRA), was conducted in response to a Fair Work Commission (FWC) application by the SDA to equalise junior wages.

The research revealed 77% of retailers would likely cut junior hiring if junior and senior rates were equalised. More than half (56%) of retailers surveyed also said such a move would increase costs for their businesses, raising concerns these costs would ultimately be passed on to customers.

This is a particular concern for smaller retailers, many of which are battling to keep their business running in the face of rising wages, leasing, energy, insurance and supply chain costs. A significant proportion of retailers also cited the shift would force them to reduce store opening hours. More than half of respondents (57%) were small businesses with fewer than 20 employees.

“Retail is the single largest employer of young Australians, employing more than 500,000 workers under the age of 24 years,” said ARA CEO Chris Rodwell.

“If junior rates are tampered with, the impact on already high youth employment could be dire – particularly in regional areas.”

In addition to higher youth unemployment, Mr Rodwell says equalising junior and senior rates will narrow critical pathways into work for young Australians, especially in small and family-run businesses that operate on tight margins and can’t absorb additional costs.

“Current junior rates reflect lower levels of experience and are an incentive for employers to take a chance on younger, less experienced workers and provide them with the supervision and support to develop important workplace skills. Removing this structure would undoubtedly make it harder for young Australians to enter the workforce, meaning employers are likely to favour more experienced applicants,” he said.

Retail plays a critical role in the Australian employment landscape, providing jobs for 1.4 million Australians and serving as the first job for one in eight young Australians.