View From The Couch - 12/May/2016

What Is It With This Interns Thing?

The worst of American ideas has somehow crept into the Australian labour landscape, audit's perniciously worked its way up to Canberra to the point where they've turned the utterly useless 'Work-for-the-Dole' scheme in to an 'PaTH Internship' programme. This lousy idea is in fact the centrepiece of Malcolm Turnbull's re-election campaign.

It really is a nutty programme because it pays employers $1000 to have an intern around, and then pays the same employe $10,000 when they hire that sam intern. As part of an incentive for the long term unemployed who will become the said intern, their $263 per week money will rise to a mere $364 a week in exchange for 25hours a week of work. This is why you're seeing the figure $4 an hour.

Now it turns out the legal advice is that this can't actually be legal given our laws.

The $840 million program forms a central plank of the Turnbull government's jobs and growth package.It features generous $1000 incentive payments to employers in the intern phase and $10,000 employer payments in the hire phase, raising concerns of a perverse incentive for employers to churn through interns. 

But if the legal advice is correct, the program is not legally sound in its current form and would necessitate changes to the Fair Work Act, or have its subsidies increased to meet minimum wage rates, adding hundreds of millions to its cost.

Illustration: Ron Tandberg

While concerns of exploitation and systemic abuse have been raised by unions and the group Interns Australia, the advice from the firm Maurice Blackburn is the first authoritative argument that it is technically illegal. 

The ACTU argues it "would require new legislation to legalise a second-class category of $4-per-hour workers and remove those employees' basic rights under the Fair Work Act". 

It says fixing the problem to bring interns's pay up to the legal minimum would "blow out" the cost of the PaTH program by $478 million.

It's interesting how the Federal government can't seem to do basic maths in figuring out how the incentives line up. 

• If you're an unethical company, you employ the intern for the required X weeks of free labour and cash in the $1000. 
• The free labour at 25hours is let's say worth the minimum $20.00/hr to round it off = 500/week x12weeks = $6000.
• Then you employ the intern and collect the $10,000.
• If you then sack the person within the first 6months of employment, preferably the first month, there's no recourse for unfair dismissal by the employee so at worst you're going to pay a month of low wages so subtract $2500 from the $17000= $15000 free money from the government.

In exchange for gifting companies $15000, the unemployed person who goes through the 12week internship and then 1month of employment then gets the $2500+12 weeks of 100 dollars =$3700 (minus PAYG on the $2500). If you consider how much more employable the unemployed person is at the end of the cycle - not much - then it's eminently clear that the system favours the unethical employer 4times more than the intern/worker ... Unless of course this is exactly what the Coalition government wants to do - gift free money to companies under the guise of trying to help the unemployed in which case I don't think we've ever seen a conservative government so cynical. 

If there really is $12200 cash to throw around for every unemployed person, there must be a better way of spending it than that. For a start they could hire the same person for 3months directly and give them a government job with real government job experience. 

The Dishonesty Of Governments About Employment

I just want to go over that last bit again. The Liberals and Nationals always say they want smaller government, less taxation. They say this because it appeals to the notion that governments don't do anything well and so any money given to them would be less inefficient in the economy. This construction masks a greater greed motive whereby if a government business or venture actually is any good, they're the same people who want that same service privatised - and of course that means ripping off form the government the bits that actually work and then leaving behind the bits that are less efficient and then blaming the leftover bits for being inefficient. This construction only serves those who construct the argument - a true hallmark of an ideologically loads argument. 

The government can - and probably should - employ more people to do more things. Especially in the context where aggregate demand is flagging so badly and the RBA is reaching near the Zero-bound, which means the private sector can't seem to generate the jobs or profits to power aggregate demand. Governments of both ALP and LNP hues have overseen growing globalisation which has resulted in an overall growth at the expense of giving up secondary industry. You won't hear it from the ALP but basically globalisation has worked its magic in reducing unionised jobs in this country, so it's not like they aren't party to the problem of structural unemployment. 

What is really galling about all this is that unemployment isn't a uniform 5.7% across the country. There are pockets where plenty of people are unemployed, and int those places the government runs these work-for-the-dole schemes far less whole-heartedly than they do in major cities and their suburbs. The administration of Centrelink in such places is effectively a work-for-the-dole scheme; that is to say, working as a Centrelink officer in those regions is an elaborate work-for-the-dole scheme given that there isn work outside of that job. 

At the  centre of all this is the grand delusion that everybody has to be working in a way that maximises productivity and profitability all the time.  Yet the physical reality of space and materials and capital and people demonstrate this is patently impossible. 

I know. It's a weird thing to say but it needs to be said that how we conceive of work in the industrial world was driven by the development of capitalism. The history of labour movements and unions and such come out of the need to humanise this demand and many countries on the planet have found different balancing points to do with what work is in our waking hours. All this stuff of commuting and schlepping and touring and driving and desk-jockeying and lifting and filing and doing stuff for your pay cheque, came about out of industrialisation. And as we head increasingly into a post-industrialised world, it's well worth asking if this schema of 'work', and the 'work ethic' that bolsters the entire culture of it, is sustainable or frankly, meaningful. 

And if the employed people situation looks somewhat untenable, then the ranks of the unemployed look even less tenable. 

We can't distribute work evenly now. 

We can't grow work readily now without significantly high education and training - which costs money. Money which the Coalition Government doesn't exactly want to spend. 

We can't encourage employers to hire people they don't need without gifting them money - which is in fact simply less effective than giving that money to the people that need it. 

Not to mention the obvious fact that we can't just shoot/exterminate unemployed people. 

The thing is, it's the government's job to think about this stuff and figure out what to do. The fact that our election is mired in the same kinds of conversations we've had since at least 2004 suggests we've not advanced in the least bit while the world has moved in to a more precarious period, and we do need to start thinking about all these things. Both our major parties really need to reassess what the hell we're talking about when we say 'work' and how that 'work' is being rewarded. 

Bread & Circuses

What Does The Future Of 'Work' Look Like?

I don't know if anybody's really pointed out the problem with the drive for productivity in this country, but basically, the increase in productivity is subtracting jobs faster, the more efficient we become. It's pretty apparent when you watch something like 'Mad Men' and the pool of secretaries they used to have that got replaced by computers, that simple jobs are going to be swept away by technology at an ever increasing rate.

Somebody did some sums over in America and it turns out that the man-hours worked in 1998 and 2013 were essentially the same, but produced so much more GDP. The problem was that there were 40 million more people in the pool of workers.:

Martin Ford explained, "In 1998, workers in the US business sector put in a total of 194 billion hours of labor. A decade and a half later, in 2013, the value of the goods and services produced by American businesses had grown by about $3.5 trillion after adjusting for inflation - a 42 percent increase in output. The total amount of human labor required to accomplish that was...194 billion hours. Shawn Sprague, the BLS economist who prepared the report, noted that 'this means that there was ultimately no growth at all in the number of hours worked over this 15-year-period, despite the fact that the US population gained over 40 million people during that time, and despite the fact that there were over thousands of new businesses established during that time.'"

That brown line plateau on the right is essentially the 21st century where productivity keeps growing while private employment has plateau-ed in America. When you consider that America used to be a manufacturing powerhouse but shipped all of its menial manufacturing jobs overseas to China, you get the picture that there really isn't enough work to go around already, and there's going be even less. Which explains the serious anger in some underprivileged communities over in America.

Naturally, this leads us to wonder what the future looks like for us. For a long time it's been apparent that there is a growing gap in the owners capital and workers in the classic Marxist sense. Thomas Piketty's argument essentially is that the post war period was the historic anomaly, and that capitalism always trends towards massive inequality opening up. Based the first 15years of this decade, it seems clear we're seeing that not only will there be inequality, there won't be the work to go around. Which is essentially how the serfs came to be in Russia. If you subdivided work into tiny components to the point that each component alone cannot support an individual, you end up with what the serfs in Tsarist Russia had.

Which is alarming. Because the future of work, after more and more machines take over, is for us to do ever more menial things for less money. Big business might bang on about productivity, but the real picture is that big business is trying to turf people out of jobs. Once out of jobs, people go on welfare; but the same big businesses that turfed people out will also lobby governments to cut spending, which is going to disenfranchise these people more. If this doesn't look like a class war, I don't know what does.

In that context, I present to you this next bit:

Work For Nothing Means Slavery, No?

Tony Abbott's government wants to let businesses audition unemployed people. If they like them, they can hire them; if not, they can let them go.

The prime minister, Tony Abbott, has come under fire for suggesting employers “try before they buy” when hiring long-term unemployed people. 

Abbott made the comments during an address to the Queensland Chamber of Commerce on Wednesday morning, where he was highlighting a new initiative which allowed people who have been unemployed for more than six months to work for a private enterprise for a month before losing the dole benefits. 

“That person can do up to four weeks of work experience with your business, with a private sector business, without losing unemployment benefits so it gives you a chance to have a kind of try-before-you-buy look at unemployed people,” Abbott said. 

“What we have permitted for the first time in this budget is, if you like, real work for the dole. Work in a business for the dole,” he said.

As far as I can see, it costs the businesses nothing to hire and fire these people. One of the dodgiest and most suspect ideations to do with these work-for-the-dole schemes is that the government is paying a person something so the person should go do work in exchange for that money.

The last time I looked, the labour one undertakes in exchange for money is called 'work' and in fact if the government is calling it work-for-the-dole, then it should pay the person the proper market rate for the work being done. Equally, if a business is in need of such a person to come in and do "real work"(their words not mine), then they should bloody well pay them properly for the work performed instead of leeching off the government for free labour. Pay the person for the work they did. That's how capitalism is supposed to - pardon the pun - work.

Additionally, if a work-for-the-dole person goes and does this work for gratis, it's undercutting a person who genuinely is able to do the work, because that latter person cannot undercut the former who is working for no cost to the company. It might be fun to imagine the biggest dole-bludging teen and forcing them to clean toilets, but really, that company should be paying a professional, their professional rates. Especially when you consider things like WorkCover and workplace health and safety laws which are now Federal, not to mention liability and indemnity insurances. Who is covering this imaginary teenager cleaning toilets? The government? The company using them?

I get it that there's always mileage in picking on the next Paxton kids and demonising the unemployed but this is really pernicious. In a broader picture, what's really worrying is that the leadership of this country has no fucking idea, not a scintilla of a clue as to the problems of a future economy where there might not be enough work; and all they've got to show us is this kind of political stunt. I would think the truth is that the Coalition is very happy to cry 'class warfare' while actually engaging in it with gusto.

So What's Growing?

Would you believe restaurants, and events are growing very fast? I can tell you form an insider's point of view that food and wine fairs have grown more elaborate with larger budgets in the last decade, while governments have started spending serious money in events to boost tourism.

If you want to understand this, it's easier to translate "restaurants and events" into "bread-&-circuses". Especially considering how much government spending on this area has grown, there is a good reason to look at this growth s some kind of attempt to reflate the arts sector, without the highbrow discussions that would plague things like the Australia Council or Screen Australia or whatever the state-based organ for the arts now calls itself.

It's nice to have landed on my feet for once and watched the sector grow in the last decade or so. I also get front row seats to the fact that the government is running out of ideas as to how to make itself useful so it's decided show bit of leg and spend bigger money on events. But you know the best circuses in Ancient Rome were when Rome was closest to its demise. It really doesn't bode well for our government that they have to go with bread-&-circuses.