A PaTH to trickle down: the trouble with internships

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trickle down economics

Creative Commons image: click for image licence

Now that the election campaign is well under way and July 2 is approaching at the speed of a glacier, let’s talk about this new Youth Jobs PaTH ‘internship’ program that’s been proposed by the Coalition as a solution to Youth Unemployment.

It sounds simple enough:

  • Anybody who’s under 25 and unemployed will now work 15-25 hours per week.
  • They’ll receive $200 per fortnight on top of their regular unemployment payments, and the business will receive $1000 to take on the position over a period of 12 weeks (or three months).
  • If, after the 12 weeks, the employer hires the ‘intern’, they receive up to $10,000 over six months.

On the surface it seems harmless enough. More workers for businesses, and more jobs for unemployed youth!

However, there are some very serious concerns that make it not only non-viable, but borderline illegal. Not only does it only pay between $4-6 per hour, but it incentivises businesses to cut full paying jobs in favour of hiring more interns.

Not so harmless really

Here’s an example:

A business is looking to hire some Christmas casuals over the busy holiday period. They’re looking for five positions that will cover the extra work required to prevent a bottleneck and maximise profits over the period.

But the new government internship program, Youth Jobs PaTH, has just become available, and the business has the option of taking on government ‘interns’ instead. The business weighs their options. It will cost them roughly $40000 to interview, hire, train, and pay five casual employees for their workloads. On the other hand, to take on five government interns will give them $5000 extra cash in hand, and even if they only keep one of them after the 12 weeks is up, they get $10000 over the six months they’re required to keep them on afterwards – which pays for itself.

They decide to take the government interns, because it maximises profits for the busy period by them not having to pay their employees – and in the end they get a ‘free’ employee for six months to cover emergencies.

On top of that, they decide to take on a sixth intern because the $6000 can finally pay for their new toaster, so they can keep the tax breaks that’ve been handed to them for a rainy day.

Screen Shot 2016-06-10 at 3.30.59 pm

You know you want one.

But what about the dole bludgers?

There are some who say that this scheme will ensure that all those lazy bludgers on welfare are actually working for their money. However, is that the point?

To those who think I’m being too soft, here are a few frequently asked questions from people who think unemployed youth is just having a whinge.

What about welfare cheats?

Welfare cheats? Sure, fraud exists in social security and any form of fraud is unacceptable. I’m not against procedures of investigation into fraud, and if it’s fraud you’re worried about, then what we really need is more investigative procedures – more layers of proof required.

As long as people are proving they are looking for work, or studying, then they ought to be allowed to receive social security. As it happens, the percentage of fraud is a very small percentage of those on unemployment, and the perpetrators tend to be the sorts of people who will find a way around this scheme too. It’s actually very easy to take advantage of this program, if the fraudster has a friend with an ABN and a little know-how with the system – which is why tighter investigative measures would be more effective. If that’s what you’re after.

What else are the unemployed doing with their time?

Looking for work, I expect. It’s a long process involving writing cover letters, making phone calls, trawling job sites and career sections of websites, interviews, chasing leads and making connections, on top of all the other household chores.

And I tell you what: that is all that ought to be required of them, because adding anything else on top of that stress-inducing process of rejection after rejection only sets them up to fail. On any work-for-the-dole scheme they have less time to look for work, less time in the day to attend interviews, and a greater financial burden that comes with weekly travel. It’s always been a problem with work-for-the-dole, and it will be as bad or even worse with this new program.

They’re getting more than $6 per hour!

So you say the $6 an hour figure is a misnomer – that they’re still receiving their regular payment on top of that. Do you know why they’re still receiving that payment? Because even under this ‘internship’ they are still regarded as unemployed. The fact that they will still receive, on average, $100 less than the minimum wage is still a bad thing.

And if you do count their regular payments towards the work, even if this extra payment were bumped up to being the minimum wage, this program is nothing more than welfare for businesses – which is trickle-down Reaganomics bullshit.

They need to contribute to society!

What good are they doing for society by working a not-job that wouldn’t exist if the business had to pay for it themselves?

A position that exists only to put money in the pocket of the owner, and that is menial and pointless?

A position that, if it IS needed, has taken the place of a real job by its very definition, and so increases unemployment in the youth population?

How deep is your fraud?

Finally.

If you believe that the problem with the economy is that there are too many dole bludgers, your position is one of rhetoric – one where evil, sneaky poor people are sucking the system dry. Fraudsters that cost you, the taxpayer, your own livelihood, because now you have to pick up the slack by sacrificing going out to lunch every day and pay more tax yourself!

Except this is not the reality, because all the people on social security who ‘cheat’, if they exist at all, cost the nation a pittance compared to the big-business fraud that happens on a much larger scale and costs us tens of billions of dollars. Many of these are the same businesses who will take full advantage of this new program, costing YOU more rather than THEM paying more.

So what do we do instead?

So, that leaves us back where we started. Youth unemployment is far from solved, and the election seems to have no end in sight.

Well, I’m going to be honest: there’s not much we can do about the election.

On the other hand, there’s still hope for our unemployed youth. Investment into entrepreneurial endeavours such as new technology startups, research and development and artistic programs are all promising avenues towards providing the youth of today a future, giving them the opportunity to gain experience in their fields while being paid a living wage.

As long as we also support these investments with strong, sustainable safety nets that will catch them if they fall onto hard times – future-proof telecommunications infrastructure, appropriate for the emerging digital economy, and a fully funded, national education system to teach them how to navigate it – we will have the tools to finding the solutions that make for a better society, and a bright future, for everyone.

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Comment (1)

  1. Martin

    I like your policies, but I wish you’d develop a policy to increase the level of NewStart payment.

    It is woefully inadequate and needs to be increased at the first opportunity!

    Please consider this as a part of your social inclusion policy.

    Reply

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