The Coalition government’s Budget plan for internships for the long-term unemployed was instantly condemned by the trade union movement and the ALP, but given qualified support by at least some social welfare groups. Internships potentially provide a path for the long-term unemployed to get back into the workforce by gaining both confidence and skills and a work record which will provide prospective employers with enough confidence to offer them a real job. Otherwise, for too many people unemployment becomes an endless cycle of increasing hopelessness and despair. Moreover, a well designed internship scheme would provide better training and experience than either an artificial make-work “work for the dole” scheme or endless classroom-based TAFE training for non-existent jobs.
Nevertheless, one can understand trade union concerns about such a scheme. Unless carefully designed and regulated there is a clear potential for it to undermine hard-won award wages and conditions.
From my perspective concerns about the internship plan are reasonable but probably exaggerated.
Clearly the concern is that unscrupulous employers will take on “interns” as effectively free slave labour and then sack them at the end of the subsidised internship period (apparently one to three months). However, there are very few jobs that are so unskilled that they can be profitably performed by long-term unemployed interns with little or no on-the-job training. Even waiting on tables, which some union representatives have pointed to as a potential area of abuse, is quite a skilled occupation that takes many weeks or longer to be able to perform competently. A restaurant that relied on cheap untrained interns would generate lots of unhappy customers and end up rapidly going bankrupt.
For most jobs, it is cheaper for the first couple of months at least for the boss to do the job themselves or employ a skilled, experienced worker to do it, because it takes more effort and valuable time to train and correct a new intern on every task than it does to do it yourself. Sensible employers are not going to employ a “cheap” intern merely to sack them when their subsidised employment period ends, when it costs more to do so than to employ a skilled and experienced worker and pay them award wages. That has certainly been my experience over the years in running a legal practice, first with employing articled clerks and more recently newly admitted practitioners who have supposedly already received basic Practical Legal Training as a condition of admission. The reality is that it takes quite a few months for them to become even marginally productive and profitable for the employer, and during that time it would actually be much quicker and more profitable to perform the assigned tasks yourself. You employ a newly admitted lawyer or graduate clerk as an investment in the firm’s future, not as a way to make a fast buck.
That said, apparently one of the reasons why the old system of articles of clerkship was abolished as the main method of practical training for the legal profession was that a significant number of firms apparently were not providing meaningful practical legal training and experience for their new law graduate employees. They were using them as cheap secretarial labour and assigning them tasks like filing, photocopying, reception duties, doing the daily rounds and banking, and buying coffee and sandwiches for the partners. No doubt it would be possible to structure work tasks in a similarly cynical way in many workplaces. For instance, cheap intern “waiters” might be assigned to mopping floors, doing the dishes and peeling potatoes rather than learning useful, transferable skills as an actual waiter.
Would promises of meaningful training and the prospect of a real job at the end of the internship period be sufficient? It seems to me that at the very least prospective employers of government-subsidised interns should be required to enter into a formal enforceable agreement specifying the training they will provide during the internship period and giving an enforceable undertaking that they do in fact have relevant real properly paid jobs to offer to interns who prove suitable. Moreover, there would need to be a vigorously policed system of random workplace audits to ensure that employers of interns were living up to their promises. On the other hand, you wouldn’t want the system to involve too much oppressive red tape because that would likely deter most employers from offering internships at all.
I have no doubt it would be possible to design and implement a fair and workable subsidised internship program for the long-term unemployed, but it won’t be easy. Moreover, whether a Coalition government has the capacity or even the willingness to do so is distinctly questionable, particularly having regard to their fairly poor record in combating abusive employment practices in franchise operations like 7-Eleven and others. “Light touch” regulation is a laudable default aspiration, but can too easily become just an empty rhetorical device disguising open slather laissez-faire governance in the interests of corporate mates at the expense of the poor, weak and vulnerable.
Even without being cynical and assuming it won’t get abused, I’m in two minds about this.
1) One is that it might be a good idea, and 12 weeks of work experience may be better than nothing. This is certainly better than the current scheme which apparently had negative effects. So in the worst case it saves money because it is cheaper.
2) The other is there arn’t enough jobs for people with essentially no skills (often with poor literacy, poor numeracy, and, if I look at who is in the long-term unemployed pool, poor spoken English), and so if one person gets a job another misses out, in which case it doesn’t matter how much training you do, unless you train people such that there is a net increase in workplace productivity and the job pool expands. 12 week internships with unemployed people in the 15-19 year old group is not going to do this.
Great post. A point that maybe should be made, or perhaps is the subject for another post, is that fact that this big policy announcement seems to be more or less cooked up on a white board somewhere without any real testing.
One of the big leaps forward in policy development was the `piloting’ of Federal and State programs on test sites with control groups to measure outcomes. The announced internships program should have been exactly suited to this kind of evidence based testing in a staged roll out, to measure its efficacy before going big. Instead we are all left guessing, as you do in this post, about whether it will have a good impact or have unindented consequences. What maybe should happen is that a range of 3-5 policy settings (with funding) be applied to different test groups to test how employers would actually behave with the new incentives. But this isn’t happening and it seems like it will be a giant stab in the dark. It has all the makings of an ineffective or actually damaging policy gamble that will waist resources and time while amendments and revisions are pored through to get a good outcome.
Breaking policy in to modular components and applying objective tests against control groups gives room for controlled failure. Individual policy settings that are ineffective at meeting objectives or lead to bad behavior: they can be weeded out before they are rolled out to the whole system. If anything the Coalition’s internship program is obvious bad process, maybe even a thought bubble looking for testing.
Others won’t take the bait- I will.
457 visa abuse is what prevents employers from taking on local labour.
But even that’s ok to a point, so when the government and msm know full-well local unemployed workers don’t get a fair go, why the insistence upon even more draconian treatment of workers, particularly younger workers?
Why this pretence concerning the jobs market providing the employment supposedly shunned by the unemployed, against the continued fudging of the reality of high unemployment through the rigging of unemployment figures?
Firstly all the evidence points to this program being a lot better than work for the dole – which I kind of like in principle, but doesn’t work in practice – at least given the punitive frame it’s been given.
However, as heartless as it sounds a good deal of the spending on these kinds of programs seems unlikely to be cost effective. Governments feel the need to spend the money because those of either side of the ideological spectrum want to go with the schtick that they want to help people into jobs.
Problem is, as I suggested here, helping one person into a job prevents others who’re applying for the jobs – so it’s a wash. There remains a case for action where such spending increases search efficiency – and the evidence I think suggests that the spending is unlikely to be worth it for the non-disadvantaged. I know the evidence from a good while ago, but I imagine job search has become a lot more efficient with the next.
That leaves the long-term unemployed. I think there are reasonable arguments for helping the long-term unemployed, but such warm-heartedness should also come with the cool-headedness to understand that the money spent may not get us much in the way of increased economic output. And cycling the long-term unemployed into the labour force every now and again keeps them ‘in touch’ with employment which may reduce the extent to which long-term unemployment reduces long-term growth. But it’s not very clear you’re achieving a lot.
My hunch is that we’d be better off spending the money dealing with real social dysfunction where there’s very little downside from such sorting effects. And perhaps helping long-term unemployed with other resources to help them become valued non-market contributors to our society. But that’s a scary thought which might not find its way into the mainstream any time soon. Perhaps a few trials might help us envisage what might be possible!
I think I agree with most of that. AFAIK the internship program is intended ONLY for the long-term unemployed (LTU). I don’t see any purpose for it otherwise. Even if all it does is keep them “in touch” with employment and only intermittently employed I think that’s useful. I would see it as part of a suite of measures to keep the LTU engaged with society, including the Green Army and perhaps even Work For the Dole where it is productive if unwaged work with charities and community groups. After all quite a few retired people do so such work without any ccompulsion at all.
LTU are generally in that state because they have significant disabilities in the employment market – e.g. poor education and skills, low intelligence, poor English, physical disability or low level mental illness not sufficient to get Disability Pension. A post-industrial economy doesn’t generate enough low skill jobs for such people, and that is likely to get worse over time. Even if Australia revives its manufacturing sector (e.g. through submarine programs etc) the jobs will be technologically advanced and not for low skill process line workers.
Over time the advance of AI and robotics is likely to lead to permanent job loss moving up the totem pole from low skilled workers to the skilled working class and middle class (driverless cars and trucks possibly being an early example). Although other and more complex jobs will take the place of existing jobs to a significant extent (or at least that has been the case since the industrial revolution) that will take place over time and won’t avoid major displacement of lots of workers who will never get a job again. Moreover, AI and robotics involve real cognitive elements that technological change has never before embodied, so maybe there will for the first time in history since the IR be a progressive and permanent net loss of employment with a lower and lower proportion of the community being in paid employment over time. Our core concepts of productive work and how people survive and are remunerated will need to change.
So what to do? It’s one reason why I and others like Don Arthur have mused about negative income tax/ universal basic income concepts. Paul Frijters OTOH regards such concepts as unacceptably expensive. Possibly you have as well. Internships, Green Army etc may well be part of a progressive redefining of the nature of work. So too would accepting that single parenthood, caring for the aged and disabled etc (i.e. most tasks that are socially highly useful but not easily monetised by private markets) would qualify for NIT payment. Under my notion of a NIT only those incapable of working (defined very broadly as above) would qualify for a NIT and it would progressively be withdrawn on a means-tested basis for people able to generate private market incomes. That would mean it wouldn’t be as expensive as Paul Frijters claims.
If most of the goods and services humans need are produced by robots with minimal direct human involvement (as may well be the case within 50 years), with only those things we prefer to be done by our own species or that don’t involve sufficient economies of scale to justify deploying robots not being in that category, then “work” will need to be radically redefined.
Assigning material security by whether you are able to draw a wage will become increasingly arbitrary and even meaningless. Believing and advocating that control of the capital that allows ownership of complex robots and AI IP has moral dimensions that should entitle the capitalist to decide which of his/her fellow citizens will prosper and which won’t will become increasingly intolerable, manifestly unjust and unsustainable. I suspect that world may be much closer than we think.
Incidentally, it’s one reason why I have been reconsidering my own attitude towards low corporate taxes lately. If corporate income is largely derived almost wholly from technology and generates very few jobs, then allowing corporate shareholders to generate large income, pay very little tax and reinvest it in more robots and AI etc, then we end up with a self-perpetuating monied aristocracy controlling huge oligopolies that rule the world with the rest of us as mendicants/serfs. Maybe we need higher rather than lower corporate taxes, along with more rigorous CGT and inheritance taxes.
Better that than allowing them to simply pile it up in tax havens while they campaign to make it altogether untaxed (presumably making Scrooge McDuck style visits)? I agree that we desperately need to tax the ones who have the money, rather than the ones who don’t. It sounds stupid when put like that, but then I look at Australian tax policy…
My feeling is that government is desperately papering over a significant ongoing fall in employment. The agricultural revolution meant 2% of the population can feed the rest, the industrial revolution has progressed to maybe 10%-20% of the population manufacturing for the rest, and it’s starting to look as though the “services” sector will go the same way. I doubt anyone can paper over 70% of the working age population not having jobs, so we’d best plan for that.
The current preference seems to be similar to our approach to refugees – if we’re nasty enough to the unemployed that we can see, the rest will hide and we can pretend they don’t exist. So we get work for the dole, people having to prove that they’re still blind every 6 months to keep their disability pension, solo mothers being forced onto the unemployment benefit, and the “income management” card that might even start hitting whitey soon. But that stuff is bipartisan, so it doesn’t seem likely to change.
The unemployed are like asylum seekers. They feel they are the ones on trial, but it is very Kafkaesque, very Deep South, as trials go. Guilty till proven innocent, in true Grand Inquisitor style.
https://newmatilda.com/2016/05/05/michaelia-cash-clashes-with-jon-faine-in-bizarre-interview-defending-intern-plan/
We have been here many times before and, in general, I am with Paul Walter in terms of how this will play out for the interns. The main use of these things is as a deterrent for those who can easily get jobs to hang onto them. We can afford to treat the bottom 15% of our society better.
I am sorry to have had to write it, paul frijters.
Is there anything resembling any sort of community consciousness “out here”?
Society is so slap-happy in its careless dismissals of what actually turn out to be other people’s lives, very important to them if you are one of them, either at the bottom being kicked around here, or interned in the giant open air concentration camp that is the third world.
If smug complacency, laziness and lack of will or even hubris, as to investigation, leads to a downfall, what will be the consequences for us, let alone future generations?