Goodness! Bureaucrats are worried
that there is something they haven’t regulated yet about the rise of unpaid internships. From Friday’s New York Times:
Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.
In addition to cracking down on intern pay, the Department of Labor is “expanding efforts to educate companies, colleges and students on the law regarding internships.” Let’s hope that they also educate themselves on the law of demand. As is frequently pointed out by our friends at the Cato Institute, minimum wage laws lead to higher unemployment, harming the people they are meant to help. It is not unimaginable that internships would disappear even faster than minimum wage jobs. Companies don’t pay interns less just for kicks. They dole out what they can afford. Paying more for interns attracts better prospects, but in this economic climate both employers and employees frequently have to settle for less. Forcing companies to pay interns more forces them to reduce the number of interns they can take on. This means fewer people will be able to gain that ever important initial work experience.
This regulation reeks of paternalism. I can’t think of too many people who take internships because of the salary and benefits offered. The reasons usually have more to do with exposure to a new field, and gaining relevant work experience. This is a voluntary, mutually beneficial arrangement, not some instance of private companies tricking students into working for free and then holding them captive. One would hope that a person could agree to work without pay for a private company in exchange for professional experience without the Feds butting in.
I have a full time job now, but I didn’t land it through my charm and good looks. If you guessed that my relevant (unpaid) internship experience was what helped me stand out to employers, you would be correct. I’m sure that the people at the Department of Labor just want to help, but all they are going to do is demolish opportunities for people trying to get their foot in the door.