Last year, several labour market experts raised concerns about the proliferation of unpaid internships, which risked becoming a black market for slave labour.
Despite these warnings, the former 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.
Shortly after, in September 2017, 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.
Over the weekend it was revealed that despite a $250 million advertising blitz, only 4,785 PaTH internships were completed in first 18 months, after a promise of 30,000 a year. From The Guardian:
Having promised 30,000 internships a year for young job seekers, documents provided to the Senate by the Department of Jobs and Small Business reveal only 4,785 internships were completed in the first 18 months of the $250m program.
The department also confirmed it had no employment target for the low-paying scheme – which unions argue equates to roughly $4 an hour for participants…
The documents reveal 227 people had begun an internship as a fast-food cook and there were 214 internships for people working as housekeepers…
It was also outlined that, in one case, a business has hosted 17 interns without offering a job to a participant…
Data provided by the department shows interns were mostly likely to work as cafe workers, followed by sales assistants and kitchenhands.
Let’s be honest, the PaTH scheme was never an employment policy, but rather an industry subsidy in disguise.
Consider PaTH from an employers perspective. They 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 and pay them $4 an hour to pull beers or make coffees?
The evidence on these types of programs also shows that employers will generally substitute a worker receiving a wage subsidy for another worker who would otherwise have been hired. Therefore, PaTH is unlikely to generate extra employment and merely represents a free gift to corporate Australia courtesy of the taxpayer.
PaTH is poor policy and should be abandoned by the incoming Labor Government