PaTH-way to nowhere

 

The following piece was written by Brandon Winter, as part of the University of Adelaide Community Engagement Learning Project.  

Stable work is key for young people to build a good life for themselves. But with the overall unemployment rate for young people in Australia currently at the shockingly high rate of 12.5% and underemployment at 18%, employment is a significant issue for young people in Australia. 

Source: ABS

Source: ABS

Employment is particularly an issue for young people in South Australia with the unemployment rate being 4.1% higher than the national average at 17.6% and only 10,400 available jobs for 24,900 young applicants.

Thankfully, the federal government has come up with a solution. It is called Youth Jobs PaTH, an acronym for Prepare – Trial – Hire. The program will allow young job seekers to work for the equivalent of a generous $4 an hour!  [Editor's note: Just for the sake of clarity - this is sarcasm]

This brilliant solution was originally introduced in the 2016 federal budget and has now come into full swing as of the 1st of April this year. Its aim is to help stem the tide of youth unemployment by providing young people with employability skills and valuable work experience in workplace exploitation. Previously it could take people years to slowly realise they were being exploited by employers. However, now young people will have the upper hand!   [Editor's note: Again. All sarcasm]

Here's how the program works.

PREPARE

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If you are between 15 and 24 years old, are on income support and are registered with jobactive, you may be eligible for Employability Skills Training (EST). EST will provide young job seekers with working skills such as communication, working in a team, interview skills and how to find jobs. This is designed to help young job seekers understand what is expected by employers.

Once this is done, you will be able to move onto the next step in the program to do an internship.

TRIAL

If you are between 17 and 24, are on income support and are registered with either jobactive, Transition to Work or Disability Employment Services for at least six months, you may be eligible for a PaTH internship. This gives young people the opportunity to get experience in a business lasting between 4 to 12 weeks, for 15 to 25 hours per week. Interns are unpaid by the business, however, they will receive a fortnightly incentive by the government.

The business that takes on the young person as an intern will receive an upfront payment of $1000 for free labour. 

HIRE

Once you have completed the internship, at this stage the business could hire you! But it is up to them. If they hire you, a financial incentive of up to $10,000 will be paid over six months to the business. The idea behind this being that it should encourage more businesses to hire young job seekers.

Sounds good right? Well…

Here are the problems.

Ideally, PaTH would prepare young people for work with skills training, give them a worthwhile opportunity for workplace experience, and then later result in the young person getting a job. But here are a number of problems with the program:

 

PROBLEM #1 – IT ESSENTIALLY CREATES FREE LABOUR

If you are working as an intern for 4 to 12 weeks and expected to work 15 to 25 hours per week, you would be expecting to earn a decent amount of money, right? Well under this program, young people will only be given a $200 fortnightly incentive on top of their usual income support payments. So if the young person worked 25 hours per week as an intern, this means the incentive works out to be $4 per hour. Yes, $4 per hour!

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PROBLEM #2 – IT CREATES DISPOSABLE INTERNS

Not only is the incentive of $200 per fortnight frighteningly small, but the program gives incentive for businesses to, as expressed by Ged Kearney the President of the Australian Council for Trade Unions, “… churn through as many young people as possible in order to keep the free labour and government hand-outs rolling in.” With the program giving businesses access to free labour for up to 12 weeks per intern, and a $1000 incentive per intern, why wouldn’t businesses take advantage of free labour by churning through young interns? It is at no cost to them.

 

PROBLEM #3 – STIGMAS

Young people face many stigmas in relation to unemployment, including the perceptions that they are lazy, unwilling to work, and that they are welfare bludgers. However, evidence for the Australian Bureau of Statistics shows that there is no difference in work ethic between young people and older people. This suggests that it is not the attitudes of young people that create these stigmas, but that it is the increasing difficulty of getting a job that fosters these stigmas which often come from the minds of people that lived in a time where it was easy to get work.

The PaTH program is aimed at helping remove youth unemployment, and so ideally it should help break down these stigmas. However, the problem is that PaTH internships will unlikely lead to any jobs, continuing the reliance of young people on welfare payments. The PaTH internships do not guarantee a job; if the now 24,900 young job seekers in South Australia were to participate in a PaTH internship, it does not mean 24,900 jobs would magically appear out of thin air after the internships are finished. As previously stated, PaTH actually gives an incentive for businesses to churn through interns without offering any jobs. If young people cannot get a job, they will still be seen as lazy or unwilling to work.

PaTH also requires young people to be on welfare payments to participate. So if young people cannot get a job, PaTH does not help with unemployment, and they remain on welfare to be part of this program, PaTH just continues reliance on welfare payments which carries on the perception that young people are welfare bludgers.

 

PROBLEM #4 – IT DISPLACES CURRENT EMPLOYEES

These internships could also be used by businesses to replace someone who would otherwise be doing a job as a paid employee. Ms Kearney recently stated that the program “… offers employers a fistful of cash to replace a wage-paying job with a worker that they don’t even have to pay at all...” The government, of course, would insist this is not the intent of the program and would say there are guidelines to ensure that employers would only be allowed to take on interns if they are in addition to other paid employees. However, particularly with large retailers, accountability becomes somewhat difficult.

On the 12th of July Andrew Stewart, a Professor of Law at the University of Adelaide, expressed to ABC Radio Sydney that not much can be done to ensure that businesses, especially large ones, do not just adjust their usual roster, giving paid employees fewer hours, and replacing them with interns that do not cost them anything. If businesses do this, then employment will be effectively decreasing, creating more of an issue for young people in the workforce. 

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PROBLEM #5 – THE IRELAND EXAMPLE

In 2011, the Irish government introduced the JobBridge National Internship Scheme to address rising youth unemployment figures. Under the scheme, unemployed people on welfare benefits would be able to partake in work experience and would be paid by the government €52.50 per week in addition to their already existing income support payments. The host organisation would receive an incentive from the government of up to €10,000 for employing that person after the internship had finished. Sound familiar?

Well, JobBridge has now been discontinued and its results were published in October 2016. The main finding was that after completing the program, the employment outcomes for the participants were improved by 32%. However, the program was heavily criticised for the lack of quality of jobs found by the participants after the internships, and similarly to PaTH, it was criticised for the exploitation of young people and the displacement of regular employment. In a dissenting report about the PaTH program, the Australian Greens argue that "Replicating these unsuccessful overseas schemes is unlikely to assist in decreasing the high levels of youth employment…" It hardly seems appropriate to address youth unemployment in Australia with an approach that has already been proven ineffective.

 

PROBLEM #6 – PENALTY RATES

With businesses not being required to pay these interns, PaTH opens the door for businesses to avoid paying penalty rates to regular employees. An SDA spokesperson stated that “There are no safeguards…” for this type of exploitation against actual employees. The Department of Employment also commented that it could not be guaranteed that interns would not be asked to work weekend shifts in place of staff that would otherwise be paid penalty rates on those days. This is particularly concerning because when the Fair Work Commission decided to cut penalty rates earlier this year, the statistics revealed that nearly 40% of young people rely on penalty rates to survive. 

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PROBLEM #7 – IT ACTUALLY LOCKS YOUNG PEOPLE OUT OF JOBS

It was found in a report by the Commonwealth Department of Employmentthat only 58% of people below the age of 30 had done some form of unpaid work experience. This suggests that some young people miss out on work experience. With the incredibly low incentive of $4 per hour for PaTH interns, the PaTH program is essentially unpaid work experience. This is a problem because unpaid work experience costs money to the participants, meaning it favours young people that can be financially supported by either family or other work. The sad reality is that a lot of young Australians cannot rely on their families for financial support which means they need to work. So with the unemployment rates being so high for young people, it is unreasonable to have a program that is aimed at helping with youth unemployment when it requires young people to already have jobs in order to participate in the program.

HERE IS A VIDEO OF WHAT SOME YOUNG PEOPLE THINK OF PATH.


What do you think? What could/should be done? What are your questions, concerns, ideas or opinions?