The government's new internship program, which, combined with skills training, replaces work for the dole, has been heavily criticised in recent days.
The hyperbolic detractors have gone as far to label the scheme exploitive "slave labour", despite job seekers still receiving Newstart and an additional $200 a fortnight.
Internships are not coercion or exploitation. It is a voluntary, mutually beneficial activity where one party recognises that, due to inexperience, their labour is not yet particularly valuable. And the other party, considering the costs and benefits behind training a low-skilled employee, cannot yet afford to pay them a full wage.
Ideally, internships would not require government subsidy. Nevertheless, giving young people, especially those who are already unemployed, workplace experience is a good policy. This is intrinsically linked to Australia's high minimum wage, at $17.29 per hour, compared to the effective full-time wage on Newstart, $6.93 per hour. The minimum wage is fantastic for those who are employed, however if someone's labour produces less value, let's say $16.50 per hour, and a business is required to pay them more, they will simply not get hired.
The difference between the minimum wage and Newstart creates a big gap where people with low skills are prohibited from earning more. This leaves them stuck, unemployed, with a lower standard of living. Internships help address this problem by supporting practical understanding and skills development that increases the value of their labour.
Internships give young people a better understanding of the workplace, as well as the opportunity to complete real work tasks, and learn directly from those who could be their future colleagues. It is only through this experience that they can get well-paid jobs. This is why internships have provided countless Australians their first start.
Five years ago, I undertook workplace experience at the organisation where I now work. My labour, at the time, was not worth a full salary. Instead, I was given an exceptional opportunity to learn about public policy that substantially helped my personal development. This experience is directly linked to my current employability.
Despite the Greens complaints about the government's internships policy, their own treasury spokesperson, Adam Bandt, operates an extensive unpaid internship program. According to his call for applications, interns undertake constituent work, research, outreach, community campaigns, as well as support Bandt's election campaign. For an aspiring public servant or political advisor of the Greens persuasion this is an unparalleled opportunity.
Internships like these are vital in our competitive labour market where young people, who inherently have less experience, are the ones missing out on jobs. Australia's youth unemployment rate is 12.7 percent, more than double the overall unemployment rate of 5.8 percent.
A survey by Bloomberg Businessweek found that of students who completed an internship, 61 percent had a job, compared to 28 percent of students without an internship. Meanwhile, a study by researchers at the University of Wisconsin found internships are associated with a 14 percent increase in interviews for job seekers. In fact, an internship is a better predictor of a call-back for a job interview than a business degree.
This is because internships address the gap between education and the workplace. While schools and universities can impart generalist knowledge, it is impossible to simulate the reality of the workplace. Work experience is in itself a key determiner of one's employability.
An internship is also far less costly compared to other paths to find a job. It takes years and tens of thousands of dollars to complete higher education and other training courses. Often an internship can be a much quicker and more effective way to get one's foot in the door.
We should be encouraging young people to complete internships and be sympathetic to businesses who take on inexperienced people in their workplaces.