Earlier this year, several labour market experts raised concerns about the proliferation of unpaid internships, which risked becoming a black market for slave labour.
In July, the Turnbull Government controversially announced that it would expand its $750 million Youth-Jobs PaTH program – to prepare, trial and ultimately hire young Australians – into the retail sector, which garnered a strong push-back from the union movement, Labor and The Greens.
Then in September, the Australian Hotels Association lined up to tap 10,000 internships over the next four years despite reports that only 200 young people had gotten jobs in the first four months of the Youth-Jobs PaTH program, drawing another strong rebuke from the ACTU.
Now, the Department of Employment has admitted a Melbourne coffee franchise that was suspended from the Government’s Youth-Jobs PaTH program for exploiting interns wasn’t asked to repay the $1,000 payment it received from the government. From BuzzFeed:
Greg Manning, assistant secretary in the Department of Employment, told Senate Estimates on Wednesday that Espresso Lane had not been asked to pay back the $1,000 upfront payment from the government, despite breaching the PaTH contract.
“So it’s only the intern that suffers?” Labor senator Doug Cameron commented, to which employment officials chose not to reply to…
“If it’s not bad enough that the government couldn’t stop an employer from making a government subsidised intern work 58 hours in one week – but they let that same employer pocket the $1,000 given to businesses taking on a PaTH intern,” Labor’s shadow minister for employment services Ed Husic told BuzzFeed News.
“Even after the business broke the rules, the government didn’t have the decency to ask for the money back as a penalty. What a sick joke.
“But this is what happens when you have an employment minister fixated on ideology and politicking above fixing her failing job programs.”
At the time of publishing the Department of Employment had not answered BuzzFeed News’ questions about whether it will be requesting the money back or how many other companies had been kicked out of the program and kept the $1,000 payment.
MB noted similar concerns to the ACTU and others when PaTH was initially announced. That is, while the PaTH program may help at the margins, it won’t do much (if anything) 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. Then if the intern is offered a job, the employer receives another payment of $6500 or $10,000 from taxpayers!
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.
PaTH is poor policy and should be abandoned.
