Youth unemployment is more than twice the national average and is growing. A closer look into Australia’s youth unemployment landscape reveals that there is a real crisis and a scheme is desperately needed to offer support for good jobs and combat this growing rate of youth unemployment.
The Government’s proposal to push 10,000 unemployed youth into $4 per hour retail internships, is implemented through PaTH, a program designed to prepare young people for the workplace and help them acquire jobs. This scheme has become a controversial subject amongst Australia’s stakeholders, including an expert in youth unemployment and Australian Unions, such as Interns Australia and Jobs Australia who hold grave concern for the welfare of these interns.
Whether this program will exploit workers or give them an opportunity to gain valuable experience in the workplace is yet to be determined.
Unemployed or disadvantaged youths under the age of 25, who are already on income support payments through Centrelink, will be given an opportunity to take an internship for between 4 to 12 weeks, receiving $200 a fortnight on top of their youth allowance, equating to about $4 per hour under the PaTH Program.
The government will give participating businesses $1,000 for each intern, and businesses will receive an additional $6,500 if the internship turns into a job.
According to the International Labour Organisation, youth unemployment is defined as those aged 15 to 24 years who are: ‘without work; currently available for work; and deliberately seeking work’.
The most recent numbers from Australian Bureau of Statistics (ABS) show the youth unemployment rate at 13%, which is higher than the overall unemployment rate of 5.5%.
The youth unemployment rate in Australia ‘increased to 13.10% in June from 12.70% in May 2017’.
University of Melbourne’s Dr. Irma Mooi-Reci, whose research revolves around the issues and consequences of unemployment, suggests that these rates highlight “problems” associated with youth unemployment, and “once people are unemployed their future job prospects actually diminish progressively as a result of two processes.
“The first is, when people become unemployed, they lose a lot of valuable skill and knowledge” becoming less attractive to future firms, ultimately “creating more difficulties finding employment”.
Secondly, “once you apply for a job, employers will usually first look at a CV. An unemployment period attaches stigma, decreasing chances for employment…and likely to create long term effects, including scarring which some people may never recover from.”
These internships will provide “young people with leadership skills and initiative through work experience, which are skills that can be used further on.”
Dr. Mooi-Reci thinks that it is “a good initiative, however it needs to be maintained and developed into the future; hopefully this is not a short term scheme”.
A 22-year-old Melbourne resident, currently searching for a job, Sarah Nash, believes that due to most internships offering no payment, this is a “great opportunity to get exposure” as it “gives youths more of a push to try and expand their possibilities”.
Despite these positive opinions of Nash and Dr. Mooi-Reci, false claims have been reported from two major news publications: The Guardian and Pedestrian TV, that two large Australian chains: The Coffee Club and Bakers Delight ‘have already signed on to accept the internships’.
However, Minor DKL Food Group: The Coffee Club, HR Manager: Jarrod Appleby confirmed that while “The Coffee Club is committed to providing jobs for unemployed youth in Australia”, which lead to an “investigation” into this PaTH “program”; Appleby said that “our current involvement in this program was incorrectly reported”.
Similarly, Customer Relations Coordinator, Peter Jones stated that “the reporting in the media regarding Bakers Delight signing up to the Federal Government’s Pathway Program is not factually correct.
“We are currently considering the opportunity however, there are no formal plans in place.”
Australian Unions, Interns Australia and Jobs Australia mutually have “serious concerns” about the PaTH program.
— Australian Unions (@unionsaustralia) July 26, 2017
Dimity Mannering, Communications Director at Interns Australia says that the PaTH program is “normalising underpaid internships, which are already a big and growing problem in Australia.
“It is vital that when young people do work, they are paid according to the minimum wage laws in the relevant industry.
“Many entry-level and low-skilled jobs that young people survive on risk being eliminated when the government endorses – and encourages – employers to offer them as low or unpaid internships instead of what they are: real jobs.”
Likewise, CEO of Jobs Australia David Thompson, says that it will all “depend on how” the scheme is managed and operated.
Jobs Australia worries about “placements in the hospitality industry”, that are “highly casualised and flexible”, where it is not as obvious when “extra people” are put on or “whether they are replacing other people”.
Interns under the PaTH Program will not be eligible for overtime or penalty rates, and therefore Jobs Australia stresses the importance of keeping a “close eye on these industries” as they may seek to take advantage of interns by replacing standard Sunday employees “to avoid” having to pay the penalty rates.
“It all depends on whether employers are taking people on to give them experience and with a view of hiring them, or whether they are taking them on as a source of cheap or nearly free labour,” says Thompson.
Australia’s PaTH program, according to Thompson has had “less than 1,000 placements being taken up”, including a few “which have exited their internships early”. This number demonstrates that the scheme is “not being taken up rapidly by employers” and “hopefully” means that it is not being used for exploitative purposes.
Thompson highlights a similar scheme overseas; JobBridge in Ireland, which is a “very good example” of “outrageous exploitation” and how these programs can go “horribly wrong”.
JobBridge, which had ‘noble intentions’ was described as a ‘calamitous’ scheme, involving numerous claims of exploitation and very ‘few full time jobs at the end of it.’
Thompson advises that the best way for the youth unemployed to acquire jobs is through “work experience”.
“Getting experience with a supplement to their income support is no substitute for paid employment, but if it helps them get a firmer hold in the labour market, then it should be ok.”
Both Jobs Australia and Interns Australia have been active in engaging with the government, interns, employers and communities. Thompson stated that Jobs Australia made a “very detailed submission to the senate inquiry about the relevant legislation”, stressing that there “needs to be an awful lot of very close scrutiny and an emphasis on what’s needed to develop high quality internships”.
But, as Mannering from Interns Australia concludes, “ultimately, the power to ensure the program is not abused, lies with the government.”