Treasurer Scott Morrison launched the PaTH scheme Credit:AAP

We've already seen how easy it is for employers to take advantage of vulnerable workers with a series of high profile exposes, including 7-Eleven and its underpayment of employees in a joint Fairfax and Four Corners investigation in 2015.

I have spoken to many of my clients associated with the 7-Eleven scandal and they've relayed stories of being forced to undertake unpaid training before they were employed. Most of this unpaid "training" involved stocking shelves or serving customers with minimal or no supervision.

Unfortunately, under the new PaTH initiative, companies such as 7-Eleven would be easily able to employ people at $4 an hour to do this same work. In essence, it has legalised wage theft.

Without doubt PaTH is a government program designed to prey on Australian youth at their most vulnerable. It's a program that pulls the rug out from under their feet.

Reserve Bank of Australia Governor Philip Lowe's has bemoaned sluggish wage growth. Credit:Tammy Law

We already know that many young Australians feel intimidated when it comes to voicing their concerns on the job, including because they're worried about future job prospects. For some, it is their vulnerability that leads them to take up these exploitative arrangements and they're loathe to speak up, not helped by the lack of whistleblower protection in Australia.

What's even more galling is the government will be giving a $1000 subsidy to employers for paying less than the minimum wage. In effect, they're incentivising employers to tear down our whole wage system.

This clearly illustrates Australia's employment law system is completely broken. I've previously described the PaTH program as a poisoned chalice, as it lures young Australians into internships with the promise of progression but delivers little in return. Indeed, it would be interesting to track how many of these internships result in permanent jobs – my concern is that more often than not, there will be no job at the end of the "training" period.

Along with the heated exchanges between business leaders and the Prime Minister at a private dinner in Sydney last week over tax and industrial relations reform, what PaTH disturbingly illustrates is the social contract between Australian employers and employees is broken.

You have to wonder how far down this path the federal government is willing to go and where it will stop.

It's quite ironic that following Reserve Bank Governor Philip Lowe's comments last month that wages growth "would be a good thing", Australia's peak business bodies and the Federal Government are looking to undermine the awards system.

Dr Lowe hoped that relative low unemployment in many developed economies would "energise" labour markets and workers into demanding higher wages. His comments echo those of former Goldman Sachs chief economist and Conservative Party Minister in the UK Government, Jim O'Neill who called for an end to wage stagnation globally.

Yet even with stagnant wage growth which has a direct effect on domestic consumption and economic growth, business and government feel the need to further prey on the vulnerable.

Loading

You have to wonder how far down this path the federal government is willing to go and where it will stop. At present it would seem there's no end point, which is bad news for young Australians.

Giri Sivaraman is head of Maurice Blackburn's Queensland employment law department based in Brisbane. He has been recognised as a preeminent lawyer for employees in the Doyles Guide. Follow Giri on Twitter at @GiriDSivaraman