Wednesday, 13 January 2010

Fair Access and the Importance of Opportunity: A Case for Quality Internships

The General Election looms on the horizon. The party machinery is being oiled; sound bites are being tested; party coffers raided. Important issues like job creation and climate change - to name but a few - should be at the heart of this election campaign, but of course they won’t. Which makes issues like the one we bring up today all the more pressing.

Nobody can doubt that fairness is a key characteristic of a developed democratic society. In the Scottish context, fairness is high on the governmental agenda. The Panel of Fair Access to the Professions, a body set up to make recommendations on how fairness of access to professional skills should be promoted, does not stray from this norm either.

The Final Report of the Panel of Fair Access to the Professions identifies a problem in the UK’s present, and a danger in the UK’s future. Firstly, that ‘opportunity… is unevenly distributed’, with very few things being done about this, and secondly, that people who are not properly skilled could end up ‘stranded economically and divorced… socially’. It stresses, therefore, the importance of providing more learning opportunities to young people, and supporting them properly in today’s changing professional environment.

The report, drafted by a panel of high-profile specialists from a wide range of professions, asserts that the UK Government needs to make sure that the young people of today are given equal opportunities to social mobility. Special attention is given, among other factors (e.g. education) to internships, a sector that has many solutions to offer, and many problems to surpass.

Why internships?

Internships are recognised as ‘an essential part of the career ladder in many professions’ and an ‘important access point for entry to a career’. Professions are considered ‘central to the UK’s future’; a future where economic advantage will lie ‘increasingly in knowledge-based services’. The connection is easy to make. Internships, a proven ‘access point to professions’ and a decisive factor in graduates’ career decision-making process can help reverse the trend of professions becoming ‘more… socially exclusive over time’.
There is potential, but it is not being exploited.

There are significant inequalities in relevant opportunities for individuals, brought about by a number of factors (socio-economic, geographic, etc.) Internships are often unpaid, which means that taking them up may be costly; and the cost, which may vary, deters people who cannot afford to work for free in order to get the experience. As a result, ‘professions draw their interns from a limited pool of talent’. People are missing out on opportunities for professional development, organizations are missing talented individuals, and the consequences for social mobility are negative.

The quality of internships varies as well. Some are ‘very poorly run’, with interns used as a ‘low-cost way to cover positions’ and others are ‘run to a very high standard’. In short, a number of the already limited amount of people being trained receives training unlikely to lead to a ‘highly developmental internship experience’.

The proposed solution by the Milburn Commission consists of three main proposals: (1) a fairer, more transparent system for internships, (2) a national Kitemark that will recognise best practice, and the (3) removal of financial barriers to internships. By presenting case studies to prove the feasibility of said proposals, the Panel emphasizes strongly on the cooperation that will need to be forged among concerned actors (Government, professions, unions etc.) so that higher-quality training will be made available to more people.

The aim of the Report is ‘change’, and the Panel is very clear in stating that this change ‘has got to be made’. The proposal is out there, and it is up to actors to turn it into action.

How relevant is an (essentially) English Report to Scotland?

According to recent research conducted in Scotland, social mobility has suffered, as ‘the margin for improvements for children is more limited’ and ‘opportunities for upward movement have been declining’. Combined with the effects of the economic crisis in the job market and the increasing unemployment of graduates, the need to implement measures in Scotland, such as the ones proposed by the Report, becomes only more pressing.

The realization of this situation, and the intention of the Centre for Scottish Public Policy to partake and contribute to this nationwide initiative, is the primary reason behind its desire to create an internship programme that will hopefully be fully funded (by the Scottish Government), and accessible to all*. In cooperation with the Scottish Government, as intended and proposed by the Panel, the CSPP offers to formulate and manage a programme that will bring graduates in contact with participating organizations. By promoting internships and offering a graduate wage, the CSPP will create new opportunities for a wide range of organizations and graduates alike. The former will be able to tap into a wider pool of talent that can suit their needs better, and the latter will be given the opportunity to get that crucial first step in the job market, without being deterred by the cost. In order to ensure that the programme is closely aligned with the Scottish Government’s strategic policy objectives, a contact point will hopefully be established.

The benefits of such a program are obvious. Scottish graduates could greatly improve their employability, Scottish businesses could benefit highly from the work of talented professional people, and the Government could enhance its own efforts to improve and strengthen its economic recovery. New opportunities could be created for everyone.

Change is possible, but it ‘has got to be made’. Identifying a problem only makes the imperativeness of solving it even greater; such is the case of fair access to professions. Since we have established that we need to work together as organizations, it is only natural that we should examine how such cooperation could take place, and try to make it reality as soon as possible.

There are many steps that need to be taken towards the goal of a better future where everyone will be able to participate and contribute. Extensive cooperation and fairer access to professional development may not be the only answers to the problem, but they are indispensable parts of its solution. Indeed we, alongside numerous other organisations, are already working together to put relevant and paid internships to Scotland’s struggling graduates.

For further information contact Barry McCulloch, CSPP Policy Manager.

*This programme has already began, without Scottish Government funding.

Nikolaos Bizas,
Research Associate

Friday, 8 January 2010

A modern Greek tragedy

In 2008, Greek political and banking circles were pleasantly surprised to find the country ‘somehow shielded’ from the crisis ‘experienced all over the world’. Many believed that the structure of the Greek economy (which did not rely heavily on exports) and the modus operandi of Greek banks provided them with relative safety against a crisis that claimed scores of jobs in other countries. Financial ratings companies warned of increased national debt and economic slowdown, but kept the faith nevertheless.

In late 2009, the picture in Greece was a completely different one. Optimism gave way to anxiety, as international credit rating agencies cut Greece’s credit rating, downgrading Greek government bonds and the country’s perceived ability to borrow and pay back debt. The ruling Socialist government announced a much bigger budget deficit than the one originally expected, and shares in Greek banks were reported to have suffered significant losses.

Many countries have faced financial crisis in recent years; what makes the Greek case a special one is the fact that it is a member of the Euro zone. Its membership is the reason that Greece cannot devalue its currency, and therefore employ a traditional method of boosting competitiveness in times of crisis. As the Euro zone comprises of many members, not all of them as competitive as Germany or France, it is interesting to see how Greece plans, and hopefully manages to deals with its problems.

So far, the Greek government’s plan can be summed up in four words: raise taxes, cut spending.

In reference to the first part of this simple scheme, the Greek ministry of finance recently published a meticulous report of all taxes in Greece, in which it is specifically stated that throughout 2010 there will be significant changes in the way that work and capital will be taxed, and that tax exemptions will be reconsidered. Members of the ministry have also announced a number of measures that will soon take place, as promised in the report. Taxes will be raised for cigarettes and alcohol; the age of retirement will become the same for men and women; and increases in salaries over €2,000 will be frozen (according to the government aim of a more just distribution of income). According to the revised Stability Program 2010-2013, the government plans to clamp down on individuals who fail to declare their full income, or pay their proper due to the state. Over a million (roughly a tenth of total Greek population) entrepreneurs are to be checked for tax evasion during this ‘tax-safari’, as the Greek press has described it. Like their counterparts in the UK, Greek bankers are also to be taxed heavily.

The cuts announced are equally as massive. Plans have been announced for a hiring freeze in the public sector for 2010, and limited hiring of permanent civil servants from 2011 onwards, effectively shrinking one of Greece’s traditionally largest employers. Short term-employment contracts are to be reduced by one third and social security expenditures are to suffer yet undisclosed cuts. Ministries’ operating costs and Greece’s traditionally strong defence budget will also be affected by the spending cuts.

In the event that revenues and expenditures miss the desired target, the Government is considering a backup plan, that will include further increase in value-added tax (VAT) and property taxes, the abolition of preferential treatment of certain professions, and the increase of fuel levies, while cutting state ministries’ budgets at the same time.

Early on in December, the Greek government additionally sold €2.9 billion of floating-rate notes to banks, in an attempt to cut what is considered the ‘European Union’s largest budget deficit’. Loans to cover various expenditures have also been announced, and Greece plans to issue about 40 percent of its 2010 debt early on in the year. Greek banks are to be the biggest purchaser of Greek sovereign debt.

Outsider views on the crisis, and the procedure taken to tackle it, vary. Certain economists have questioned the savings announced, and others have not made up their mind yet about whether the EU should help Greece or not. German economic analysts have stressed that despite the economic hardship and unrest (which coincided with riots against an infamous case of police brutality), Greece is going to make it, thus alleviating fears about the Euro zone’s future. The IMF sound quite reassuring too.

To be frank, Greece has no option but to make it. The European Central Bank has been very explicit about reducing budget deficits fast, and, besides, much more is at stake than disappointing the ECB. What Greece is risking, as Finance Minister George Papaconstantinou has repeatedly said, is losing its credibility vis-à-vis investors and partners. "Our credibility deficit is more important than the deficit in our public finances," told Papaconstantinou to parliament, and he is right; for credibility can push investments and cooperation, and help get Greece out of the deficit pit it’s found itself in. After all, no country can develop and prosper on its own. Even the greatest of superpowers need partners.

Analysts, officials and organizations all seem to agree on Greece’s economic recuperation; it may take long, it may be tough, but eventually it will come. What has not been examined, however, is the impact of this massive reform plan on the Greek society, and its large public sector. Greece is a country with a traditionally high number of civil servants, which have so far struggled to provide satisfactory services to the Greek public. Contrarily to the private sector, which is loosely regulated and monitored and where workers’ rights have been increasingly violated over the last years, the public sector in Greece is considered a stable and trustworthy employer, where the rights of workers are safeguarded and where unions are rife.

With the coming measures, however, the public sector undergoes drastic changes. Existing personnel will have to manage with less funding, and eventually less workforce, and retirement age is equalised upwards for men and women. Given the fact that, as it is, the Greek public sector is already not considered to meet its duties towards the Greek public effectively, a reduction in money and manpower could mean further deterioration of provided services, unless it is accompanied by measures that will improve efficiency- expotentially.

A smaller number of public sector jobs means that private sector jobs will have to be created in order to avoid having large numbers of unemployed people putting pressure on an already exhausted welfare system. Given Greece’s current ‘credibility deficit’, and the lack of money to create new public sector jobs, it remains doubtful how this could occur.

The government’s attempts to reduce deficit are bound to have wider repercussions than imagined- or announced. The question is, essentially, if Greek policy-makers have considered these repercussions appropriately. Finding money to pay off a debt is one thing, but adjusting a whole workforce and a job market to wholly new conditions is something completely different.

In ancient Greek tragedies, a person or thing called deus ex machina would appear at just the right time to provide an unexpected helping hand, a solution nobody had thought of. It seems to be absent from modern tragedies though, and the hero of this particular tragedy, Greece, has no one to count on but itself.

Nikolaos Bizas,
Research Associate