Internship scheme ripe for exploitation

THE new government-subsidised youth internship scheme will lead to exploitation as employers churn through free workers rather than creating real jobs, warn Unions, Labor and the Greens.

The ACTU is concerned the PaTH internship program unveiled in the budget not only poses a serious risk for young people and inexperienced workers, but could undermine the entire national wage system.

Instead of employing a worker on the minimum wage, businesses would be able to access a pool of free labour as part of a taxpayer-funded young worker exploitation scheme.

Under the scheme, the government will pay businesses $1,000 to take on young, unemployed people as interns for up to 12 weeks. And the interns will receive $200 on top of their fortnightly welfare payments.

Businesses that employ people full-time at the end of their internships will be eligible for a youth bonus wage subsidy of between $6,500 and $10,000.

The ACTU warns the scheme will encourage businesses to access a pool of free labour instead of employing workers on the minimum wage.

PaTH interns working 25 hours a week would receive $364 a week. That is $68 below the minimum wage and represents just a $4-an-hour improvement on the dole.

Meanwhile, businesses would save a wages bill of $432.25 for 25 hours’ work a week for each employee.

While many employers may do the right thing, there are fears the PaTH program is open to abuse as it creates incentive for employers to churn through disadvantaged young job seekers every twelve weeks.

After two years of cuts totaling $2.5 billion, including a $1 billion cut to apprentices and apprenticeship support, the Liberals have axed another $247 million from skills and training, and failed to introduce initiatives to help people access quality jobs and long-term careers., says ACTU Secretary Dave Oliver:

“This internship program is a path to nowhere — it’s replacing existing entry-level jobs with a churn and burn scheme that gives business access to free, exploitable workers,” he warned.

“Paying young workers $4 per hour is not far above the rates in third world sweat shops — it’s outrageous and it puts our entire wage system at risk.”

The US-style scheme will dissaude businesses from hiring people, even on a minimum wage when the government is ready to supply them with free labour and a $1000 handout, says the ACTU.

“The government should be investing in TAFE, higher education and apprenticeships — but these have all been cut.”

THE FACTS

• Newstart allowance for a single person with no children is $527.60 per fortnight.
• If the recipient works a PaTH internship for 25 hours a week, they only receive an extra $200 per fortnight ($4 an hour worked), meaning $363.80 per week in total.
• The minimum wage is $17.29 per hour, saving business a total of $432.25 for 25 hours work per week per employee.
• ABS figures put current job vacancies nationally at around 172,900 and 737,300 people are looking for work.