Jul 11, 2011

A JobBridge to somewhere?

Rob Farhat
Minister for Social Protection Joan Burton recently unveiled the government’s National Internship Scheme, called ‘JobBridge’, partnering with numerous private sector employers to offer 5,000 internship positions to the unemployed. In reality, the scheme will mainly apply to recent graduates who are struggling to find a job, so how might the new scheme affect you?
First of all, let’s look at internships in principle. There are two broad criticisms of internship schemes and their consequences. Firstly, from the point of view of students or graduates, internships are criticised for having created a culture in which we are expected or even ‘forced’ to work for nothing or next to nothing (particularly in the United States) in order to boost our CVs and start climbing up the ladder, often doing menial tasks under tough working conditions. However, given the current economic climate, consider the alternative: unemployment. Surely gaining some sort of work experience for little pay is more attractive an option than sitting around and doing nothing, losing skills, and potentially emigrating. Moreover, the notion that we are ‘forced’ to take unpaid or low-paid internships is nonsense – if you don’t want to work for pittance nobody is making you do so, and even if you do you can quit at any time. But compared to unemployment, an internship is at worst the lesser of two evils, and can potentially boost your employment prospects for when the job market does begin to pick up.
The second criticism levelled at internships is that companies use them to replace fully paid jobs, hence exploiting internship schemes for higher profits. This criticism arises from what economists call the ‘lump of labour fallacy’ – the misconceived notion that there is a fixed amount of work to go around and hence adding to the workforce will only take jobs away from everybody else. It is used to argue against immigration, increased productivity, technological improvements, and all sorts of other evil things. It is called a ‘fallacy’ because it is completely baseless, and is a rare example of something that most economists agree on – the reality is that extra workers increases demand, which creates extra jobs. In the short term, some firms may replace their full time employees with interns, but the amount would be minimal, and would likely be confined to companies who are living dangerously close to bankruptcy and hence need to cut costs in order to survive. Down the line, internship schemes can in fact boost the jobs market by averting long term unemployment, and helping companies find future employees.
So what does the JobBridge scheme specifically have in store? Firstly, these are all paid positions, as interns receive unemployment benefit plus €50, totalling at €238 per week. The key factor in order to qualify is that you must have been in receipt of jobseekers’ benefit for at least 3 months, so clearly the idea is that these internships are meant to be a last resort once all other employment options have been explored. However, this may have the adverse effect of discouraging job search, as people could simply rely on the internship scheme for work, but hopefully that won’t be a significant problem.
The questionable aspects of the scheme arise from the nature of the employment itself. Firstly, the €238 in weekly wages is fully paid for by the state – surely the employers should be willing to at least pay the extra €50, and if not, one would have to question whether the internships are of much value. Secondly, companies that want to take part in the scheme will be vetted by Fás – hardly the model of efficiency. Participating companies come from a wide range of industries, and include PWC, Tesco, Aer Lingus, Arthur Cox, and ESB.  We can give the scheme the benefit of doubt for now and presume that the vetting process has been done objectively, but given Fás’s record and the Irish political system’s tendency towards cronyism, we may eventually find ourselves being offered internships in Michael Lowry’s casino down in Tipperary. Safeguards are being put in place to ensure that the internships are not used to displace current employees, but many of the participating firms already have traditionally offered internship programmes in the past, and it would be difficult to detect cases of the taxpayer-funded scheme simply being used to pay for these.
So while the scheme has its flaws, for now it certainly doesn’t seem like much harm, and if it means 5,000 less graduates being unemployed, it should be applauded. While the full cost being borne by the taxpayer does seem unnecessary, from a graduate’s point of view it could make that bit of difference to avoid an extended period of unemployment, or even emigration.

Sign Up to Our Weekly Newsletters

Get The University Times into your inbox twice a week.