David R. Henderson  

Minimum Wage and Internships

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Co-blogger Bryan raised two good questions the other day about unpaid internships. That gets to one of the points I often make when I talk about the minimum wage in speeches or in interviews:

The government is saying, in effect, you may pay $7.25 an hour or more or you may pay 0 an hour but don't let me catch you paying more than 0 and less than $7.25.

I made this point in a previous post titled "Israel's Nasty Minimum Wage." Of course, as some commenters pointed out, the government is increasingly making unpaid internships illegal. It has found one more way of making it hard for people to advance.

Also, as commenter MikeM pointed out early in the thread, I had an earlier post about Jan Helfeld doing a great interview with Nancy Pelosi some years ago in which he put her on the spot on this same issue. Watch the interview and see how you think she does.


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CATEGORIES: Labor Market



COMMENTS (10 to date)
John writes:

As an aspiring lawyer, I benefit from the availability of unpaid legal internships, but it is interesting to note that the Federal government does not pay for a good chunk of the legal summer programs offered. It is also not clear if these 40 hour per week positions are entirely educational.

Yancey Ward writes:

What was particularly troubling in the comments attempting defend the minimum wage combined with unpaid internships was the blanket assertion that one was not educational and/or resume building while the other was. Seriously, do they really think minimum wage jobs are not educational and resume building?

Vince Skolny writes:

I can see how less-educated people can be fooled by the rhetoric into thinking the minimum wage "protects them," but I'm dismayed that the more educated persons typical of interns aren't openly outraged at the constraints those laws raise against them.

Patrick R. Sullivan writes:
I'm dismayed that the more educated persons typical of interns aren't openly outraged....

Vince, as Bret Maverick's "ol' pappy" used to say, You can fool all the people some of the time, some of the people all of the time...and those are pretty good odds.

For proof of that, click on the link David provides to his earlier post, and read my comment there. You'll find out that it's worse than you think; the interns are actually paying (tuition) for the privilege of working for free.

Vince Skolny writes:

Wow. Thanks for that, Patrick. Unbelievable-- sadly, I guess it's really not.

Makes me wonder/worry when entrepreneurship will come to be "protected." Seeding my training/consulting business several years ago, I offered free work for reference, track record, and tangible results.

Many of my friends have done the same and I've counseled others to do likewise. I also know it's not uncommon for fledgling models and photographers to trade time for pictures (they call it TFCD, "trade for CD").

Obviously, we all need protection from ourselves and the exploitation we've endured.

Lori writes:

Actually, progressives have been lamenting the trend to more emphasis on unpaid internships. The argument goes that working class youths don't have the means of family or other support to make unpaid internships feasible. They see it as a retrograde development of society back to a time when creative pursuits were a plaything of the leisure class, from which were excluded people not possessed of the luxury of thinking about things other than where their next meal (or their next paying gig; dinero=dinner) will come from.

David R. Henderson writes:

Lori,
I have also argued that unpaid internships are difficult for lower-income people to accept. The solution: allow internships that pay greater than zero but less than minimum wage.

Lori writes:

The existence of cheap labor is offensive if there is not also cheap housing. Cheapness on only one side of the ledger shifts the labor-management balance of power even more strongly in favor of management.

I approve more of the apprenticeship concept than the internship concept; with the understanding that the apprenticeship system is under the control of workers, say via a union. Of course the far right lately has been making a bogeyman of "credentialism." Apparently they want all of us to be on the defensive at all times, with no laurels whatsoever to rest on, at any point in the life cycle.

PrometheeFeu writes:

@Lori:
"The existence of cheap labor is offensive if there is not also cheap housing."

So no labor + expensive housing is better than cheap labor + expensive housing? I know quite a few people who would much prefer being paid a little than their present situation.

PrometheeFeu writes:

@Lori
"Of course the far right lately has been making a bogeyman of "credentialism." Apparently they want all of us to be on the defensive at all times, with no laurels whatsoever to rest on, at any point in the life cycle."

As it turns out credentials are often not that useful in determining your success in life. Today, I use in my job almost none of the skills I acquired through formal education or validated through credentials. Looking around, many people have a similar experience. Oh sure, I love being able to think and talk about economics, but given the cost of going to college and credential programs, it is legitimate to ask: "are they an effective way to succeed?" Perhaps there are cheaper more effective ways to get ahead in life.

As for resting on your laurels, the metaphor is very apt: We can't all have laurels. So a more interesting comment would be: What gives you the right to be allowed to rest on laurels that someone else is willing to work hard for? Are you so intrinsically above those other people that you deserve more than they do?

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