Now people pay to work for free

I am back on my regular pattern which means there will be no detailed Wednesday blog – just some snippets if anything. This morning, I did a radio interview on the national broadcaster (ABC) about the growing spread of unpaid work experience. It was clear the interviewer thought that work experience was a good thing. I indicated that it was a creeping disease that has become part of the neoliberal agenda to erode the rights of workers. In Australia, this disease has morphed into a cost-shifting exercise where employers have pushed their responsibility to train their workforces onto the public education system and are now demanding payment from students to allow them to undertake so-called ‘work experience’. Increasingly, this practice is become built-into educational programs, which compromises the quality of the education. But while it is dressed up in mighty descriptions such as ‘preparing our youth for an exciting future’ it amounts to nothing more than unpaid work. The latest iteration is that now people pay to work for free. Our trade unions are largely silent on this scandal.

We now pay to work for free!

The interview was motivated by a report in the Fairax press yesterday (March 13, 2018) – Companies defend charging $1000 for unpaid internships – which documented how:

Students and graduates are forking out $1000 to undertake unpaid internships with a one in 64 success rate of picking up a full-time job and which don’t even take place at the company’s office.


… the firms involved insist they are simply providing the training universities have failed to deliver to prepare technology, business and engineering graduates for the real working world.

This has been a creeping neoliberal disease over the last few decades.

When there are enough jobs to meet the desires for work of the labour force (vacancies outstripping underutilised workers), firms had to take responsibility for the development of job-specific skills within their workplaces.

This was the full employment era.

It was when educational institutions educated – by which I mean, developed critical thinking skills, decision-making skills, and a general awareness of literature – which was meant to prepare people to function and contribute to a sophisticated society.

Vocational training, inasmuch as it was delivered outside the paid-work environment, was developed within technical colleges.

There was a clear distinction between education and training.

It was also understood that the lower productivity of workers during their training period would be matched by a lower wage than they would receive once their period of indenture was completed.

As the neoliberal grip has tightened, the distinction between education and training has become blurred and universities have become compromised into offering more vocational type courses.

Corporate pressure on governments and educational authorities has seen increased contamination of educational courses with material designed purely to advance private profit rather than provide general education.

We now have the absurd situation where university curriculum requires compulsory unpaid work in corporations as part of the educational programs.

The latest iteration of this creeping disease is that corporations now are charging students for the chance to work for free in the name of ‘work experience’.

We now have ridiculous situations where universities have taken on vocational training of say nurses, which were formally trained within the hospital system, and the public health authorities demanding universities pay for job placements as part of the work experience requirements in these courses.

The shift of nursing into universities was reasonable in that it redressed some of the inequities in authority structures between doctors and nurses (the latter now also having university degrees) but has opened the students to abuse in the form of unpaid work and other demands from prospective employers.

It is clear from the research evidence that this new era of ‘unpaid work’ does not lead to superior outcomes for the students once they graduate and enter the workforce in a more permanent way.

The so-called internships are nothing more than free labour for profit-seeking corporations and others who should be paying workers who work within their firms.

Alarmingly, the trade union movement has barely blinked at this creeping disease.

But with over 15 per cent of the available workforce underutilised (either unemployed or underemployed) the balance of power is firmly in the hands of the employer and they can cost-shift all their training responsibilities to the publicly-funded education system and demand payments from young prospective workers desperate for a foothold into a future job.

This cost-shifting has also undermined the quality of our educational systems.

The solution is to ensure government policy creates very tight labour markets (full employment), which will force the training responsibilities back on to the employers.

The problem is that current government policy deliberately creates this massive wastage of labour and desperation among our youth.


This is what I am listening to while working today.

It is from the cool school alto saxophone player – Paul Desmond – who worked mostly with Dave Brubeck before an early death from lung cancer (heavy smoker).

I don’t usually like alto (I prefer tenor and baritone) but the way he played made the smaller member of the sax family sing so sweetly.

On his tone, he said:

I think I had it in the back of my mind that I wanted to sound like a dry martini.

His most enduring song as a composer was Take Five (Dave Brubeck’s biggest hit).

This track – When Joanna Loved Me – is from the 1966 release – Easy Living – (RCA Victor) (which was recorded between 1963 and 1964 in New York City).

I play the album a lot.

The excellent guitar playing is from Jim Hall – who is one of the giants of jazz guitar in the tradition of Wes Montgomery.

The song was later released on a 1997 compilation (Feeling Blue) which collected all Desmond’s early 1960s RCA Victor material.

Cool jazz – nice to think by.


More tomorrow.

That is enough for today!

(c) Copyright 2018 William Mitchell. All Rights Reserved.

This Post Has 15 Comments

  1. This neo-liberal disease seems to have spread everywhere. Very common here in China too. The 4th year of university is often an unpaid/minimal pay internship. But then critical thinking is also even less encouraged.

  2. Was this not a common practice in Victorian Times when apprentices would pay to be trained?
    Nice music BTW 🙂

  3. The fundamental problem appears to be twofold

    – there are fewer jobs than people that want them
    – people are expected and required to wander the globe looking for their next job

    the alternative is clear

    – there is always a living wage job in the area you live in, and therefore people with money to spend in the area you live in
    – businesses are expected and required to wander the globe looking for people prepared to work for them

    Which is best for the 51% of the population at or below median income who form the majority and therefore, in a democracy, should decide the terms?

  4. Neil,

    Your comments are valid and whilst carrying due weight, are nevertheless not entirely valid; “there is always a living wage job” etc in particular.

    I am thinking of course, of Jarrow – In October 1936, a group 200 men from the north-eastern town of Jarrow marched 300 miles to London. They wanted Parliament, and the people in the south, to understand that they were living in a region where there were many difficulties, and where there was over 70 per cent unemployment.

    The men were demanding that a steel works be built to bring back jobs to their town, as Palmer’s shipyard in Jarrow had been closed down in the previous year. The yard had been Jarrow’s major source of employment, and the closure compounded the problems of poverty, overcrowding, poor housing and high mortality rates that already beset the town. Ellen Wilkinson, the local MP acted as eloquent spokeswoman for the crusade.

    The point that needs to be addressed is how difficult it was to replace all those jobs in a local community, despite UK GDP in a state of recovery by 1936.

    It is ironic that just ten years preciously (in the 1926 General Strike) the Flying Scotsman had been derailed by fermenting striking miners, but a decade later that same express train was promoting English Capital to Scottish Capital travel whilst the problem of how to move work to the unemployed was still intractable; and in many respects still is – hence the focus again recently on improving northern rail routes.

  5. When I had graduated from university (2012) and was unemployed (living in Newcastle, NSW), I entered into a period of clinical depression and was put on medication. I was on benefits and my job active provider, which was part of the federal government, and dealt with people on a disability, did not at all help with the jobs I was applying for but instead tried to force me onto an unpaid work experience programme stacking shelves at BigW. There were threats that I would be reported to Centrelink and have my benefits cut. The crazy thing was, I wasn’t receiving benefits because my savings were too high, I had an 8week wait before I received anything! I wasn’t being made to go, I wanted employment before I started receiving benefits.

    I was exited from the programme having been deemed too competent and remained the rest of the year searching for work before realising there were no employment opportunities in Newcastle.

    This was under the Gillard years, I member of the left wing of the ALP!

    I met many unemployed in that year, many of whom had mental and physical disabilities who would be placed on bullshit subsidised training programs, where the employer was paid and the workers received a pittance. All this sold under the guise of helping people !!

    I approached the local paper with my story and was turned away. I was told it’s a work training program that helps people and they didn’t see a story in it.

  6. I think Bill clearly brings out the underlying issue that has caused the tragic dumbing-down of our societies. The monetisation of education and the obsession with measuring education as if it were a physical good production process.

    I left teaching after the system became so intolerable and the tidal wave of bullshit became to much for me and I had a breakdown. Children were being spoon fed information and critical thinking skills minimal as everything became about league tables with the social aspect of schools referred to as ‘value added’, another bogus pseudo-economic term.

    The Murdochisation of the UK press, where investigative journalism was replaced by slinky colour supplements full of cruise holiday adds has contributed massively to the zombification of the populace.

    Probably one of Corbyn’s greatest achievements was almost done unintentionally, that is, despite the daily attacks on him by the UK gutter press after his accession, he simply ignored them in a Zen-like way which enraged the bastards even more and revealed them for what they were.

  7. I can’t stand the smugness of Zakk Goodsell. I don’t know what part of the real world he comes from that permits a company director to act like a jerkbag in an article without worrying about attracting future business partners. How professional!

    I agree with Neil. Businesses can get away with exploitation because people are so desperate for paid work, they’d do anything.

    I’m sorry Xenji that happened to you. I got pretty depressed after graduation too. I never got a clinical depression thanks to my family. You got exploited when you were vulnerable. The newspaper should have taken your story.

  8. I think William is right: some Victorian apprentices had to pay for the privilege of being employed. Arguably that makes economic sense, to be thoroughly brutal. People pay for the privilege of being educated (or the state pays). And during the first year or so in a job, a new recruit may be genuinely of no economic use to an employer: i.e. the employer is acting as educator. If an employer wants to be paid for employing/training an apprentice, then presumably that negative wage is the free market price for the apprentice, and where prices are at their free market level, the normal assumption is that GDP is maximised.

    If society as a whole does not like that, and thinks apprentices should all get a positive wage, then its the job of society, i.e. taxpayers to pay, in the same way as taxpayers fund free state education for kids.

  9. Tom,

    Thanks for the thoughts. It wasn’t my situation that I saw as the worst. I had the ability to articulate and argue and use the system to my advantage. However I met people with Asperger, autism and other cognitive dysfunctions that had no chance in the world of arguing for themselves.

    It comes under Disability Employment Services and was implemented by the current opposition leader Bill Shorten. I find it ironic that an ex ACTU leader and supposed advocate for the working class, endorsed such a scheme. I’m not sure how the scheme operates today.

    There were people paid as little as a few dollars an hour while a business was paid $1000 for helping ‘train’ somebody. (The DES was trying to train me to stack shelves) The garden workers you see around the Uni of Newcastle were employed under this scheme.

    It’s similar to the CDP program that is run in remote communities that forces people on welfare to work for 25hrs a week to receive their payment.

  10. William says:
    Wednesday, March 14, 2018 at 15:05
    Was this not a common practice in Victorian Times when apprentices would pay to be trained?

    Not just in Victorian times. In the 1930s, my grandfather paid ÂŁ100 for my mother to go into a hairdressing apprenticeship. He extended his mortgage to pay for it. (ÂŁ100 was a lot of money in the 1930s). However, it was returned to him on the successful completion of her apprenticeship.

  11. Ralph, Keynes showed many years ago that the assumption “where prices are at their free market level, the normal assumption is that GDP is maximized” is often wrong when it comes to the labor market. That the economy can get stuck in underemployment equilibriums and such where wages get forced down due to the market but remain in far from maximized levels of GDP.

    And it is a tough argument to make that firm or industry specific education needs to be the responsibility of the state rather than the for profit corporations seeking to use that education to make money.

  12. @RalphMusgrave – how many new recruits are of no economic use to their employer? They are not merely a student but perform a range of duties starting at the unskilled end – most businesses generate a range of low-skilled tasks that must be performed by somebody for the business to ultimately function. While the apprentice learns, they are expected to perform all the crap jobs which are unpopular but unavoidable – ie, electrical apprentices get handed all the test and tagging, a mind-numbingly boring and repetitive job that requires only the most basic early first year training but is a necessity.

  13. This paying for work experience has been a feature within the Aviation sector for a very long time. It has its roots in the destruction of the labour union that represented pilots by the Hawke-Keating government on behalf of their mates who owned the then private sector of the industry, Ansett and the desire of Hawke and Keating to get rid of Qantas as a high priced asset to the private market. Pilot education and training has long been a very expensive process because you need to use both academic studies (theory) but vocational or practical skill training and development. The partitioning of skills into specific blocks meant that it was a step process, acquiring the skills and certificate then a further skills and further experience until industry barriers could be met in terms of qualifications and experience. For a long long time the major transport operators in this country obtained these suitably skilled peopled by poaching trained staff from the military via higher salaries, etc. Until the mid 1990s one of the more substantial costs to the owner of an air service operation was labour and capital costs (leasing innovation removed that major cost) but training costs were very high because if you operated a particular piece of equipment, lets say a Boeing 747, the persons who were to operate that equipment had to meet stringent testing and vetting to ensure they would and could do so, this took time and a lot of money. Having a ticket for a Boeing 747 may have made you a desirable employee to another airline but unless they also operated a Boeing 747 you had to retrain or poach the staff from other places who did have the qualification for that equipment. Unless you were military trained at taxpayer expense, privately trained staff had to pay for everything, their academic courses, their flying training for various tickets or skills required (and there were and are many steps to finally being attractive to a commercial employer). This cost a lot of money, in today’s dollars you needed in the vicinity of some $200,000 (it is even more now) as a minimum to obtain bare qualifications but it did not buy you job experience. Commercial companies until the Ansett collapse continued to fund the intense and highly expensive process of endorsements (for the aircraft type) to get and hold the skilled staff they needed.

    Richard Branson and Virgin then introduced the innovative cost shifting of requiring that prospective employees fund their own endorsements, that is you were offered employment on the basis that you handed over to Virgin a very large sum of money, some $50,000 for the type training to fly their Boeing 737’s. This was a concept or idea they borrowed from companies in the United States where deregulation had been in swing for some time. If you failed the training process (the risk), you lost your money, and you wore the cost not the company. Qantas and all the other carriers soon followed suit. Unless you were wealthy or had a wealthy family you took out a loan to pay for this and carried the cost of that loan for some considerable period of time, on top of which Virgin and others now free of the restrictions of union awards and legal government labour control (Arbitration Courts), promptly reduced salary levels again attacking the cost structure of established enterprises such as Qantas. All industry players now have shifted the cost of training on to the employee who carries those costs for the rest of their lives in one way or another. They have not done this with non technical staff such as engineers who were in very short supply and still are but instead outsourced and off-shored the maintenance and hence the engineering needs to places like Hong Kong, Singapore and the Philipines. The companies then significantly reduced the conditions, entitlements and wages of other employees, except senior executives and CEO’s. They continue to do so. This has been this industry’s practice for nearly twenty years now. The employee carries the risks of performance evaluation and possible loss of employment, the cost of training and now due to computerised staff hour management systems has every possible legal hour of work extracted from them. They have even erased the everyday transitory costs like hotel accommodation by what is called deadheading, that is instead of finishing work in Perth and staying the night there, they will put you back into an aeroplane going back to Sydney for example as a passenger so you can resume work there on arrival. The seat costs them nothing and is far cheaper than a five star hotel. When you see the words ‘low cost’ or budget airlines, this is what it means.

  14. As a footnote to the previous the other rort which was introduced in lieu of a full upfront payment and/or partial payment was the use of ‘ the bond’ requiring prospective employees to sign a legal contract stipulating that they were required to pay out the bond (the full cost of all training) if they failed or left the employment of the company within a stipulated period, in most cases this period is approximately between 3 to 5 years minimum.

    At the bottom of the industry food chain it is now common practice for aspiring employees to pay for experience after the endorsement so you in effect pay the employer in real dollars not just no salary for the privilege of obtaining precious hours of experience. As there are no controls on salary levels they have been reduced to the point of being about equal with the lowest paid employees in the country, retail and cleaners.

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