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.