EKIP– Expert Club for Economics and Politics A Different Opinion
In the middle of this week, the parliament adopted on second reading the amendments to the Labor Code regulating internships and legal relations between employers and interns studying with them. The amendments to the law aim to increase youth employment and improve the labor market. According to the new regulations, interns up to 29 years of age, who have completed secondary or higher education, but have no work experience or previous internships, will have to be appointed to an employment contract for a period of half a year to one year without the right to a second internship in the same company.
The new requirements completely contradict the essence of internships – an arrangement between people with little or no work experience, who are willing to work without pay and whose main goal is to gain experience, and employers, driven by their own human resources needs. The new conditions for internship programs will increase the costs for employers to support interns. As a result, some companies will not find it profitable to run internship programs (or at least will be forced to reduce the number of interns they accept for training).
As Desislava Nikolova from the Institute for Market Economics rightly points out, interns often do not have the skills and experience of full-time employees, and in most cases, even without being paid, their net contribution to the company's activities is negative. Therefore, a salary could not be a mandatory condition for an internship. This means that the authors of the law either do not understand or completely replace the concept of internship programs, which will not only not achieve the intended goals, but will also lead to negative consequences for all parties.
If we look at the share of unemployed young people (up to 29 years old) with higher education compared to all university graduates, we will notice that since 2008 the ratio has been worsening annually. According to data from the Employment Agency, in 2008 the ratio was just under 16%, and on average for 2013 their share increased to 23.45%. In other words, it is becoming progressively more difficult to start a job with little or no experience. When young people are prevented from gaining work experience, this statistic will continue to worsen.
As in any case of state regulation, the option proposed by the officials for changing the Labor Code implicitly leads to the logic that the authors of the law know better than the contracting parties what is best for themselves. This, of course, is not true – there is no way that someone (even if that someone is from the state administration) can know better what is more useful for someone else. Following the logic that “the government knows better”, we can come to the conclusion that everything should be regulated by centralized directives. The new rules will harm young people who are willing to offer their labor in exchange for experience and skills with which they can later find a job. Last but not least, the intervention of the state apparatus undermines the foundation of individual freedom and capitalism – free voluntary bargaining between individuals.
It is not the job of officials to determine the framework within which two individuals can freely negotiate, and it would not be in the interests of a small group of people to determine the right of voluntary choice of others. Even if we assume that the authors of the change in the law truly had the desire to help young people, it will actually significantly harm internship seekers and employers.
