Ms Lorraine Mulligan:

I will go into a little more detail on JobBridge and how we should view that scheme at the current juncture, given the changed circumstances. While the Indecon report points to high progression rates from JobBridge, it must be noted that 24.7% of survey respondents gained employment in a different sector to the one in which they undertook their placement. This may indicate that some had to divert from their preferred career paths, which may be difficult to undo. That is an important consideration in the current climate.

The proposed new scheme recognises the need for employers to contribute to its financial cost. This is to address one of the findings from the Indecon evaluation in 2016 which reads as follows:

As is common in many labour market activation schemes, the counterfactual impact evaluation suggests that most of the benefits in terms of employment outcomes would have occurred in the absence of the Scheme. In other words, high levels of deadweight exist. There is also evidence of some level of displacement in a minority of cases.

The potential for deadweight and displacement remains a cause for concern, particularly given that self-reporting by employers may lead to underestimation. While the magnitude of risk may be less apparent at a macroeconomic level, the dynamics of job displacement can be very detrimental in individual cases.

For example, jobseekers who had previously been in employment found themselves priced out of applying for positions that would otherwise have been suitable and that would have normally attracted an industry level of pay but which were instead filled under the JobBridge scheme.

The proposed new JobBridge scheme recognises the need for a higher level of payment for participants pegged at the minimum wage level. However, this does act to protect industry norms in many cases. The joint labour committee system provides an alternative and well-suited system for managing the question of work experience, training, entry level rates, etc. The use of this system across a range of sectors should be promoted and incentivised rather than undermined by State policy. Currently, employers in the hotels sector are, in effect, vetoing the State's system for collective bargaining by refusing to negotiate a sectoral agreement on pay and conditions. At the same time, the hospitality industry enjoys a reduced VAT rate while the State props up low-pay through the family income supplement payment. The introduction of a new JobBridge scheme would only provide a further opportunity for employers in low-paid sectors to dampen wage outcomes.

The proposal for a new JobBridge scheme does not adequately deal with its potential negative effects. Despite the promise of tougher inspections, there is no mechanism to address the fact that some sectors are more prone to exploitation and low-quality employment. The Indecon report from 2016 found that 33% of survey respondents considered that their placements did not provide satisfactory job training and work experience opportunities. Rather than being paid the normal job rate, however, they worked at a sub-minimum wage level for 30 to 40 hours per week for six to nine months without having a quality experience. It is already difficult for low-paid workers to manage but the prospect of interns on a new JobBridge scheme at minimum wage may undermine the potential for pay progression among ordinary employees. In addition, the scheme does not build in the importance of career progression so that, rather than being a stepping stone, it is a treadmill. All workers should be able to benefit from pay rates that are set at company or sectoral level above the minimum rate and interns should not be excluded from this. Irish workers in the hospitality sector are low-paid by European standards and this should not be reinforced by an improperly designed new JobBridge scheme.

The argument has been made that it is difficult to find employment without having experience and that a work experience placement can bridge this gap. However, there are demonstrable skills shortages in many areas of the Irish economy, such as ICT. This provides an incentive for employers to take on graduates without experience and to provide their own on-the-job training. A new JobBridge scheme would seem to be an unwarranted subsidy to employers in this situation. Nor is a new JobBridge scheme necessarily an answer for targeting participants with a low level of education and, or, other social disadvantages given that the sectors they may be directed to can be prone to low-pay and vulnerable to exploitation. In order to meet the complex needs of these clients, it would be better for the Department of Social Protection to engage directly with employers through its local Intreo offices to seek suitable work placements if appropriate. In some circumstances, it may be more beneficial to prioritise education, vocational training or apprenticeships in order to provide the basis for sustainable employment.

The need for intensive and one-on-one engagement with young people was underlined in the Ireland's Youth Guarantee implementation plan. This was to provide young people aged 18 to 24 years who had been unemployed for four months or more with an offer of work or alternatively a quality offer of training, education or work experience. The intention was for Intreo office staff to prioritise young people and there were penalties attached to those in receipt of benefits for non-engagement. The JobBridge scheme was one of the options under the plan, among others such as Momentum, JobPlus and the back-to-education allowance. While the Ballymun pilot scheme was well-resourced, there are significant question marks about the roll-out of the Youth Guarantee, in particular regarding the capacity at local level to deliver an intensive level of support. A progress report or evaluation of the implementation plan is urgently required in order to assess its effectiveness and chart a way forward.

Research on the effect of reductions introduced to the unemployed benefit rates for young people, commissioned by the Department through the Labour Market Council, has yet to emerge. Again, this is vital information that should be brought forward at the earliest opportunity so that we can draw the necessary policy lessons and conclusions.