By Leith van Onselen

Over recent months, several labour market experts have raised concerns about the proliferation of unpaid internships, which risked becoming a black market for slave labour.

Last month, the 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:

Up to 10,000 internships will be offered to unemployed youths over the next four years in a deal struck between the federal government and retail sector

They will get a start at a job and, you know what, they could go on to great heights, Prime Minister Malcolm Turnbull said on Monday

The PaTH scheme (Prepare, Trial, Hire) offers young jobseekers $200 a fortnight on top of their income support payments to undertake internships, and gives employers a $1000 upfront payment for taking them on

But Australian Council of Trade Unions president Ged Kearney said the program offered no path to qualification, employment or workforce protection.

This is a government-sanctioned program that actually borders on slavery, she told reporters in Melbourne.

If this does create new jobs, then pay the kids for the jobs. Pay them a wage. Theyre going to be productive. Theyre going to be contributing to the bottom line of these businesses

Labor and the Greens are opposed to the program, insisting it will allow young people to be exploited by employers.

If the PaTH program becomes simply a supply of cheap labour for employers who would otherwise be paying people full time wages to do that work, then thats a bad thing, deputy opposition leader Tanya Plibersek said.

Yesterday, it was revealed that the Australian Hotels Association has lined up to tap 10,000 internships over the next four years amid reports that only 200 young people have gotten jobs in the first four months of the Youth-Jobs PaTH program. And this has drawn another strong rebuke from the ACTU. From The Australian:

Since April 1, 7000 young people have commenced employability training, 1,015 internships have started, and 200 young people have gained employment.

Employment Minister Michaelia Cash was forced today to defend the outcomes given the Government had promised up to 120,000 internships 30,000 a year over the life of the four year program.

Well, it was always up to 30,000, she told ABC radio.

She said the government had been absolutely delighted by the take-up since April.

We now have 200 of our young people who were, quite frankly, looking down the barrel of long-term welfare (who) have now gone through the program and are in employment, she said.

Senator Cash will join Malcolm Turnbull in Perth today to announce that the Australian Hotels Association will commit to establishing 10,000 internships over the next four years

Business taking on an intern will receive an upfront $1000 payment. The internship is between 15 and 25 hours a week across a period ranging from four to 12 weeks. Interns will receive $200 a fortnight from the government on top of their regular income support.

If the intern gets a job, the employer will receive a further payment of $6500 or $10,000

ACTU secretary Sally McManus said no business would employ someone on the minimum wage if they could get a worker for free.

This program is gifting young people to businesses, destroying jobs and not giving a single young person a useful skill or recognised qualification, she said.

Prime Minister Turnbull and Minister Cash are selling young peoples futures out from under them to shore up the votes of the business community.

Huge numbers of young people are already priced out of education and skills training because they cant find steady work and wages arent keeping pace with inflation. This program, which will tear the bottom of the labour market, is only going to make this dire situation worse.

MB noted similar concerns to the ACTU when PaTH was initially announced. That is, while the PaTH program may help at the margins, it wont do much to increase the overall supply of youth jobs and could also lead to employers substituting a regular employee for an intern, saving themselves money in the process.

Consider PaTH from an employers perspective. They will 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?

Indeed, the evidence on these types of programs shows that employers will generally substitute a worker receiving a wage subsidy for another worker who would otherwise have been hired.

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Hotels line up to tap youth slaves - MacroBusiness (blog)