Thursday, May 17, 2012

Happy Zero-Wage Slaves?

Internship season is once again upon us, so like the swallows returning to San Juan Capistrano, we turn our eyes to the institution of unpaid trainee labor. Here we have the Grey Lady weighing in on the practice, noting especially the ire from the Labor Department, an organization seemingly founded on the principle that seldom is labor anything but non-euvoluntary.

There's plenty of commentary already by economists much brighter than I on the fool's errand that is labor market intervention. Banning (or heavily regulating) internships robs young workers the opportunity to hone their basic workplace skills. Add to this the misfortune heaped on them by minimum wage laws and child labor restrictions, it's a wonder that anyone can ever break into the labor market at all.

But does this imply that the moral intuitions of the meddlers are intentionally cruel? I don't think so. We've really got a BATNA disparity here. Young workers are not salable. They don't have too many options. Of course, this outrage is a preposterous one: if you're worried about disadvantaged workers, you'd lobby to tear down immigration restrictions, but I suppose that's a thought for another post. Point is, unskilled white collar labor is not euvoluntary. This is a simple fact of career trajectory. You have to start somewhere, right? Anyway, efforts to block unpaid internships would, sadly, do nothing so much as worsen the set of available opportunities. Again, career trajectory insists that people have to get basic work skills somewhere; apprenticeships are largely dead in the US, so we've got the internship instead.

Discussion topics:

  • From the point of view of the firm, what is the advantage of unpaid internships?
  • Given that college students are greenhorns, what is the best way to season them before graduation?
  • If unpaid internships were banned, what institutions might replace them?
  • What sorts of voluntary labor arrangements should be regulated by the Federal Government--what justifies workplace intervention?
  • Why should the state worry so much about people who are likely to become middle-to-upper-middle class workers rather than low-skilled labor?


  1. As (about to be) a college graduate, I don't think that there is any optimal way to season us before entering the job market. Simply giving us advice is beneficial, but anything more concrete could limit our views and expectations. By allowing us to judge ourselves on the acceptability of our circumstances you best understand what's actually happening (as was utilized via testimonial in this article).

    Given unpaid internship banning, you'd see a drop in overall supply of internships as there would be those who simply couldn't justify having a paid internship. I can only potentially conceive of job 'workshops' where participation is voluntary and would cover training in the skills needed by the firm. This again would be non-paid, provide training, and serve as a loop to the internship ban.

    I'm of the opinion that state/federal forces should be conducive of innovation and non-detrimental to voluntary exchange. With regard to workplace intervention this means that I support state and federal action where it doesn't hurt the potential or benefit of the individual in this case. One of the fears mentioned concerning future job difficulty exemplifies the fear of government action implementing costs greater than their own benefit. A possible solution to this is to simply change the rules of the game to make it more clear to all involved what is allowed and what is foul play. Firms are comprised of humans and thus human action. They see a potential gain with affordable costs and then they act on it. This holds true for the intern as well. Therefore, possible solutions are to have the law expand the current legislation and include future job anti-prejudice as a stipulation for those who have to come forward against ill-treatment OR for firm and individual to come under legal contract as to what specifically will be expected from both parties.

  2. i believe that Internships are the best way to make connections that lead to paid jobs and a greater experience in well known corporations and government agencies. It provides the young unexperienced students with a much needed experience before entering their real job market. At least half of those unpaid interns find full time job within a year of their internship.
    In many cases most unpaid internships are considered illegal if they go against the employment’s standard act. examples are: The intern does not replace a regular employee but works under a supervision. The internship experience should be the best for the inter itself. The employer who trains the intern does not advantage from the activities that an intern does because the intern does not replace a regular employee.
    Some employers abuse this practice by taking the advantages of those unpaid interns. They require them to work long hours for no pay, or do works that not even considered an experience for them like cleaning the kitchen or making coffee.


Do you have suggestions on where we could find more examples of this phenomenon?