Last month, several labour market experts raised concern about the proliferation of unpaid internships, which risked becoming a black market for slave labour.
Today, Megan Shellie – a chairwoman of the YMCA Youth Advisory Committee – has picked up on the issue, warning that the Turnbull Government’s Youth-Jobs PaTH program devalues the work of young people. From The Canberra Times:
In reality [PaTH is] the devaluing of young people, and the creation of a second class of workers, paid well below minimum wage and only valuable to business as long as the government keeps footing the bill…
A fair day’s work is equal to a fair day’s pay, but the emergence of “internships” and “work-based learning” has muddied the waters of what it is to be an employee or even to have a job…
With the PaTH program these kinds of internships will be the norm, with businesses able to pick up a rotating door of effectively free labour while the taxpayer foots the bill…
An intern in the PaTH program could be paid as little as $4 an hour for their work, far below minimum wage, and doing work that is most likely to be of significant benefit to the business…
This issue goes beyond just the PaTH program. It goes to how we as a country value our young people… The bar for young people to get a foot in the door is so high, more so than any other generation, and yet the rewards of doing so are often so minimal, even detrimental to a young person’s bank balance at times…
The PaTH program is a slap in the face for every young jobseeker who genuinely wants to be given a chance. Young people deserve a chance, and we deserve to be paid a fair wage for the work we do.
We noted similar concerns when PaTH was initially announced. That is, while the PaTH program may help at the margins, it won’t do much to increase the overall supply of youth jobs and could also lead to employers substituting a regular employee for an intern, saving themselves money in the process.
Consider PaTH from an employers perspective. They will get a free kick as the Government is not only the one paying the intern, but the employer also receives $1,000 up front for employing the intern without the need to worry about sick days, annual leave or penalty rates.
Why would an employer hire a young worker on a casual basis when they can effectively get paid to take on an intern? Indeed, the evidence on these types of programs shows that employers will generally substitute a worker receiving a wage subsidy for another worker who would otherwise have been hired.
That said, the problem with unpaid internships goes beyond unskilled workers on the PaTH program, but also extends to university graduates. As noted in The ABC last month, “unpaid internships are increasingly becoming the default way of beginning a professional career in Australia”.
A key driver of the proliferation of unpaid internships among university graduates is because of the heavy oversupply due to the deregulation of university places, which has placed bargaining power well and truly with prospective employers. With one million students enrolled in higher education in 2014:
And graduate employment outcomes at “historically low levels”:
Competition among graduates to secure employment in their field of study is immense. Accordingly, employers are able to pit graduates against each other and obtain free labour in the form of unpaid internships.
It’s called an “internship” because that sounds a lot sexier and less exploitative than “free labour”. But if a private firm is seeking volunteers to do work that would otherwise be paid, then it is clear exploitation.
