Economics

Interns Built the Pyramids Redux

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Labor Department solicitor M. Patricia Smith has declared war on unpaid internships, vowing to make all employers pay minimum wage and applicable benefits to their summertime toner-changers. The Washington Times explains the case against insisting that employers pay temporary interns:

Unpaid internships are valuable for many reasons. Most simply, they help people test whether they are a good fit for a particular industry. If interns like the type of work at particular companies, internships can help them get the training and contacts they need to make their career aspirations a reality. The short time that interns spend at jobs—often just two to three months—makes it difficult for firms to both train these young people and get much work out of them. From manufacturing to nonprofits to media companies such as The Washington Times, hands-on opportunities open through internships are almost endless.

Basic economics teaches that if the price is raised, demand falls. If companies have to pay wages, they will take on fewer interns.

It's not how it looks! They're actually thinking about girls!

I could never afford to work for free. So my first response to M. Patricia Smith's crusade (after "Why are they calling a person named Patricia 'Monsieur'"?) was pretty close to Joe Queenan's reaction (in his memoir Closing Time, which is reviewed in the current issue of Reason) to being assigned high school readings of classic prep-school novels:

"We all had a great laugh when our teachers assigned us these coming-of-age tearjerkers; from our perspective, the more boys named Phineas who got pushed out of trees, the better."

But while I am openly driven by spite, supporters of the Labor Department's crackdown actually seem to believe requiring interns to be paid will increase economic opportunity. From Lindsay Beyerstein at In These Times:

The institutionalization of the internship is troubling on many levels. In many fields, including journalism, internships are practically mandatory. Even paid internships seldom offer pay and benefits comparable to an entry-level job in the industry. The most desirable openings are often in expensive cities like New York and Washington D.C.. Not all students can afford an extended period of unpaid or low-paid employment.

In other words, internships have become a hidden class barrier. Financial aid can help students afford college itself, but there's no comparable support for recent graduates who are expected to intern.

The idea that internships disempower the proletariat is something I first encountered in a 1990s issue of The Baffler, and it seemed like a stretch even at the time. That college students are so desperate to get experience in their chosen fields that they'll work for free does not seem like a problem with a macroeconomic solution. I'm not sure it's a problem at all. And as the Wall Street Journal notes, the economics of free work become more attractive, not less, in times of recession:

While the Department of Labor may insist the world owes these kids a living, the truth is that many young workers are willing to trade free labor for a chance to demonstrate their skills and build a resume for the next job. Especially in a bad labor market, the choice college students face may be to work without pay, or hang by the beach.

Labor Department vows, "Never again!"

Mish Shedlock, who has been paying close attention to the administration's many higher-education missteps, predicts fewer internships and opportunities under the crackdown. He also cites a debate from the Christian Science Monitor, in which the pro-internship Jeffrey Tucker explains, "This is the state mowing down the grass that is growing in the cracks of its sidewalks and then spraying Roundup to prevent any more from growing." His opponent Danielle Connor deplores internships as "a cynical way for companies to trim labor costs," pointing to her own case as evidence:

If it weren't for my unpaid internships I highly doubt I would be in a position today to make my living as a freelance writer, producer, and campaign consultant. It was the internships that qualified me for my first couple important entry-level jobs in the nonprofit world, which have given me the skills and experience to do what I want now.

And you know, if there's one thing America needs more than lawyers and model/actress/whatevers, it's more freelance writer/producer/campaign consultants. This is a strong case against internships, but maybe not in the way Connor is thinking.

Reason will have more coverage of Intermoil tomorrow.

NEXT: Keeping An Eye On Earmarks

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  1. Did those interns invent the airplane too?

    Stolen by the White corporations.

  2. The next step will be to unionize the interns.

    1. Then, on to stamping out the menace of volunteerism.

  3. Internships are the anticipated outcome of minimum wage laws (aka price controls on labor) that say you either have to pay a wage higher than some workers are worth, or nothing at all.

    The net result is that some jobs pay nothing at all, when in the absence of minimum wage laws they would pay more than $0 / hour.

    Statists now want to close this entirely unforeseeable consequence by further tightening price controls, thinking that won’t have any further bad consequences.

  4. Every fucking day this administration takes stupid to whole new level. It’s mind-boggling.

    Does anyone other than the grade-A nimrods in the administration actually think companies will hire interns for minimum wage (or more)? THESE PEOPLE ARE RETARDED.

    1. To the contary, they are very smart. If you look at their actions through the lens of fostering dependency, it all becomes very clear.

      1. Even if that were their objective, they are wrecking the economy. If you don’t have the money to pay for dependent people, then those dependent people start calling for your head.

        No, they’re just bonecrushingly economically illiterate and extraordinarily dumb.

        1. Argentina keeps electing Peronists. I rest my case.

        2. If you don’t have the money to pay for dependent people, then those dependent people start calling for your head.

          Bank CEOs?

          1. If Hollywood is to be believed, bank CEOs would just pay to have you assassinated.

        3. Don’t forget conceited.

          -jcr

    2. I do. It’s like what, $7.50 an hour? $300/week? $1,260/mo?

      Wait. Maybe not.

  5. In other words, internships have become a hidden class barrier.

    Now, we’re getting somewhere.

  6. If it weren’t for my unpaid internships I highly doubt I would be in a position today to make my living as a freelance writer, producer, and campaign consultant.

    And what a terrible loss to society *that* would have been.

  7. Your inclusion of the Chandra Levy pic might be pointlessly cruel, not that her murder didn’t give our shallow culture something to chatter about so many years ago.

  8. The appropriate response to that pic is: “Nice rack”.

    1. Considering it took a full year to find her remains, maybe “Nice ribs” is more appropriate.

      1. I always she was cute. Not a bad mistress for an unknown Representative to have. You could do worse.

      2. And what of Gary Condit? Who will speak up for the Garboesque congressman-turned-ice cream jerk?

  9. In other words, internships have become a hidden class barrier.

    I think there is something to this. I couldn’t afford to work for free over my summers, but I had a lot of classmates who did, and, to a small degree, I kinda sorta resented it.

    But you know what?

    THAT AIN’T THE FEDERAL GOVERNMENT’S GODDAMN BUSINESS

    Maybe I couldn’t do it, but I still have a great career now, I am accumulating wealth, and, God willing, my own kids will hopefully have those sorts of opportunities someday that I didn’t have.

    Just because I grew up poor doesn’t mean that I always will be poor and need to be protected from the gentry for the rest of my life.

    This class envy shit is really getting tiresome.

    1. Progressives. The party of envy.

  10. Hate to say it but most unpaid internships are scams. They’re a revolving door, and the “employer” often has no interest in considering an unpaid intern for employment past the duration of the internship. After all, the next batch of unpaid interns is on the way. In some industries, such as technology, young individuals with professional-level skills who are looking to “break in to the industry” and accept unpaid internships are used displace skilled, paid workers.

    I’m a libertarian who doesn’t really like the minimum wage, but at the same time I think it’s disingenuous to pretend, on purely ideological grounds, that a significant number of unpaid internships are not exploitative.

    If we want young people to become productive members of society, capable of earning and keeping the fruits of their labor, how does supporting fruitless labor help? Traditionally, even apprenticeships provided small stipends or other benefits.

    If young people are conditioned to believe that their labor has no value and that work doesn’t provide a reward, why would anyone expect future generations not to rely on their parents and big government for everything? We can’t have it both ways…

    1. Re: Realist,

      I’m a libertarian who doesn’t really like the minimum wage, but at the same time I think it’s disingenuous to pretend […] that a significant number of unpaid internships are not exploitative.

      On purely economical grounds and applying ethics of liberty, I can say that there is NO way internships are exploitative, for two reasons:

      1) People are not pressed into “intern gangs” like the sailors of old.

      2) It is clear the interns value something else besides pecuniary remuneration in exchange for their labor, otherwise they would not work for free – uh, of course, unless they were pressed into “intern gangs” like the sailors of old.

      If young people are conditioned to believe that their labor has no value and that work doesn’t provide a reward, why would anyone expect future generations not to rely on their parents and big government for everything?

      I don’t see how your misgivings are justified. If interns obtain something they value more than the potential pecuniary remuneration, then it is clear they understand the concept of exchanging labor for something of greater utility. How could that translate into apathy, you will have to explain.

      1. “It is clear the interns value something else besides pecuniary remuneration in exchange for their labor, otherwise they would not work for free – uh, of course, unless they were pressed into “intern gangs” like the sailors of old.”

        It must be nice to live in a theoretical world. Apparently you don’t know any recent grads. Here’s how it works:

        1. Naive 20-Something has limited job opportunities (read: can’t get a job). It’s kind of tough out there these days.

        2. Cool Company offers Naive 20-Something an unpaid internship in the industry Naive 20-Something wants to break into. Naive 20-Something doesn’t have a better option, and Cool Company boasts about the “experience” Naive 20-Something will gain. It even hints that Naive 20-Something could earn himself a job once the unpaid internship is over.

        3. Cool Company has no real interest in Naive 20-Something’s career. Every year, Cool Company brings on an unpaid intern to do the work Naive 20-Something will be performing this year.

        4. Naive 20-Something completes the unpaid internship. Cool Company benefits from Naive 20-Something’s skills and labor, and Naive 20-Something walks away with a glowing reference, but no job. Cool Company tells Naive 20-Something it isn’t hiring but will keep Naive 20-Something in mind in case a position opens up.

        5. Despite said glowing reference, Naive 20-Something still can’t find a job and moves back in with the parents. Fortunately, Naive 20-Something can stay on daddy’s health insurance until he’s 26 thanks to ObamaCare.

        The non-pecuniary remuneration you speak of is largely an illusion. Naive 20-Something is naive, has limited options and perceives little ability to bargain. Further, because he’s inexperienced, he may undervalue his labor and overvalue the perceived non-pecuniary remuneration.

        Obviously, if Naive 20-Something can’t find a job and is saddled by debt, he will have to live with his decisions and rethink his career. As he should.

        Like I said, I don’t particularly care for the minimum wage. Pay these naive kids $1/hour. But don’t pretend that young people accept unpaid internships out of some sort of wisdom about the value of the illusory non-pecuniary remuneration, and that this unpaid experience is a positive thing for young people. That’s even more naive than Naive 20-Something’s belief that Cool Company is going to give him a job if he busts his ass hard enough.

        1. So, your imaginary naive 20-something is completely unemployable and in no way benefits from having an internship on his resume. Good thing you’re a realist.

        2. My employer hires undergrad “paid interns” and graduate-degreed “entry level workers” for temporary jobs w/ no benefits. They mostly suck as bad or worse than any unpaid intern ever would and don’t last very long. They do get a little $ and something to put on their resume. They get a nice neutral employment reference too. We could hire unpaid interns all day long except for the insurance liability.They all get valuable experience and knowledge. Usually, find another fucking “job” in some other field and don’t go any further into debt studying the same shit you just wasted 4-7 years on

      2. Well, their is the deceit that they may gain full-time employment when their is no intention to hire. I saw design instructors at school do this all the time.

    2. They’re ‘paying’ to break out of the “can’t get a job because I have no experience; can’t get experience because I can’t get a job” catch-22. If three months of bullshit means access to a field that will pay better or be more rewarding for the rest of their working years, it seems like a decent deal for them in the long run.

  11. If interns aren’t paid, they don’t pay taxes. So there’s a legitimate government interest in making sure they get paid.

    1. The same can be said for Scoutmasters, soup kitchen volunteers, community radio show hosts, etc. Do we force those organizations to pay those persons, too?

      1. Private organizations, yes. Not people volunteering for publicly-run services, since that would result in a net cash flow out of government.

        1. So, you want to ban all voluntary labor?

          You’re a joke handle for a libertarian regular here, and the “joke” is that lefties are mentally retarded, right?

    2. One for you, one for me. One for you, one for me. One for you, one for me…

  12. If I had to pay my interns, I would have only made $19,999,999 last year!

    Can’t have that!

    1. Leave me out of this!

    2. WOW DAT’S BIG NUMBA! CAN’T HAVE BIG NUMBAS!

  13. at the same time I think it’s disingenuous to pretend, on purely ideological grounds, that a significant number of unpaid internships are not exploitative.

    Wake me up when the evil corporations are snatching interns off the street at gunpoint, and forcing them into involuntary servitude.

    1. Wake me up when you meet an unemployed 25 year-old who isn’t interested in leeching off his parents and the government.

      1. I hate to suggest this… but why doesn’t said twenty-five year old work under the table doing the jobs Americans supposedly won’t do?

  14. most unpaid internships are scams.

    The Cult of Credentialism is a scam.

    1. Freakin’ tell me about it. If you want to know if I’m employable then take me out for a beer and ask me some shit.

  15. Wait, Connor’s arguing AGAINST free internships? WTF?

  16. Labor Department solicitor M. Patricia Smith has declared war on unpaid internships, vowing to make all employers pay minimum wage and applicable benefits to their summertime toner-changers.

    Which is to say, Ms. Patricia Smith is bent on making labor scarcer by artifice, to protect the market for the unions.

    Because pricing internships off the market cannot be intended to help the interns – there is always an ulterior motive behind the actions of the crafty bureaucracy.

  17. “YOU’RE A LIAR! YOU KNOW SOMETHING YOU’RE NOT TELLING US, YOU SLIMY, SCUMBAG LIAR!”

    1. That was my favorite South Park moment ever. Slightly less funny after Condit was exonerated. Slightly.

  18. DUMB DIDDLY DUMB DUMB

  19. Further, because he’s inexperienced, he may undervalue his labor and overvalue the perceived non-pecuniary remuneration.

    The same could be said of his gross overvaluation of an expensive college degree, when he should just go get a fucking job.

    1. Couldn’t agree more. Which is why the government should stop providing perverse incentives so that everyone has the “opportunity” to get a worthless college education.

      That would be a step in the right direction and would reduce the number of naive young people who go off to college thinking a degree will get them a job that pays well.

  20. Naive 20-Something completes the unpaid internship. Cool Company benefits from Naive 20-Something’s skills and labor, and Naive 20-Something walks away with a glowing reference, but no job.

    If the little darling hasn’t derived any benefit (i. e., *learned* something) from that exchange, he doesn’t DESERVE the job.

  21. The intern world has indeed changed…unpaid interships have most definitely become all too common…What frustrates me, however, is the fact the recession has led to a new generation of interns: Eternal Interns (www.the-eternal-intern.blogspot.com)

    What spurred the creation of The Eternal Intern blog was principally the frustration many experience, due to the fact that no matter how many internships we complete and how much praise we gain at work, we are still to this day “Eternal Interns”, thus: unofficially unemployed.

    The fact that 3 Master Degree graduates, with international internship experience, speaking at least 3 languages, open-minded and working in 3 separate industries (and 3 different cities) each face this same “Eternal Intern” problem, is what made me decide to start this blog with 2 friends and tell our story.

    What we try to express through “The Eternal Intern” is the reality of being an intern in 3 of the most powerful cities of the world: the good, the bad and the ugly. Some days can be awesome, others can be miserable.

    We’ve done everything “by the book” and yet still find ourselves at this stand-still.

    Please check us out! http://www.the-eternal-intern.blogspot.com

    Flora

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