There Ain't No Such Thing as a Free Laborer?

This morning, Greg Mankiw posted a very interesting article on his blog from The New York Times. The article makes a good point on the minimum wage requirements for interns working for no pay. This is a good thing for college students like us because we are trying to find pay in places that also offer real-life experiences for the work place. Under the law, companies are required to pay interns the minimum wage except under special circumstances where the companies comply with the six federal legal criteria the article references. But for every internship that will be paid, there is no doubt some will be cut from companies. They simply can't afford to start paying people that don't contribute in the same way the experienced employees do. It is much like adding more labor to our models but not increasing output. Although the lawmakers might think this is a good idea, there is good reason to think it will actually hurt students looking for internships because there will be fewer available.


Matthew said...

This is a hard one. Yes students want to have internships, but at what cost? I think that it is important to pay somebody. Since companies will be paying them, maybe now they will give them an opportunity to do real tasks. Sometimes I hear that they just turn out to be everybody's coffee runner. When your going to be paying somebody, you want it to bring real value to the company. Then again, maybe people who do not have the skills will end up without an internship. This is a hard one. Good article. Here is an article that I found that made me think a little bit more about it.


Hunter said...

I agree that this topic is a catch 22. We as college students want to take every opportunity in gaining experience related to our major and career path, but it is hard to work for free. I think a major misconception of a college degree is the guarantee that you will get a job right out of college. Sometimes a coffee runner is a necessary step to working your way into the company culture. Companies should not be able to prey on a college student for free work. If more companies provide paid internships then it will lead to less internships available and less ways to gain the important experience required. To shed some light, Warren Buffett was cable installer, Jim Carrey a janitor, and Stephen King a laundromat attendant. The point being, you have to start somewhere.

Dr. Tufte said...

Oy vey. Some people just don't get it, do they?

Just because you have a minimum wage law - in principal to protect some from exploitation, that doesn't imply that all people being paid less are being exploited. Unless, of course, you're not really good with the whole thinking thing.

Having said that, I think this is a tempest in a teapot. You know what a firm does with an intern that they have to pay more? Work them harder. Big deal.

P.S. I was a dishwasher, a janitor, a mover, a busker, and a pizza deliverer. I learned a lot from each - although I think my time would have been better spent raising my GPA.