no third solution

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Unpaid Internships: Illegal?

September 5th, 2009

I thought the job market was bad when I graduated in 2003. I can’t begin to imagine what this year’s graduates are going through, since they are competing with last year’s graduates, and also with everyone who’s been laid off or otherwise let go in the last 5 or 6 years (some of whom might have a decade or more experience) for the eleven remaining jobs. I can understand that in such circumstances, people might be willing to do some work for free, in order to try and impress the right people.

Enter: government.

Its illegal (9 times in 10).

Mark Cuban argues (and I agree) that the Federal Government has absolutely zero reason to be concerned with the interactions between individuals—voluntary interactions.  However, I understand that only desperation, the product of an un-free market, permits employers to offer, and drives people to choose unpaid jobs or internships in the first place.

Unpaid internships* seem to be most prevalent in those fields where there is the least amount of freedom or competition: government, sports, media. These organizations can get away with asking 20-somethings to grovel at their feet for zero pay, because there is no real competition to keep them honest.  And people accept these gopher-jobs because of the prospect of the economic rents which they might be able to capture in the future.

In a free market people will pay you to create value**, because if they don’t, someone else will, and you’ll go create value for those people, not the misers who want you to work for free.

“Unpaid internships” shouldn’t be illegal, but in a free society, there’s no room for them.

* And it’s not limited to unpaid. Medical residents might earn something like $50k per year, during which they’re expected to work 80 hours a week. That’s about $9 an hour when you factor time-and-a-half for overtime, or about the same as a shift supervisor at McDonald’s. So either doctors-in-residence are about as valuable as a Fry Chief, or doctors (post-residence) are grossly overpaid. I suspect the truth lies somewhere in between the two extremes.

** I do not mean to suggest that there would be no room for apprenticeships or other programs where one party may work for “free” or even pay in order to learn a specific skill or trade, only that internships as most people understand them (errand-boy/girl, gopher, etc.), would disappear.




no third solution

Blogging about liberty, anarchy, economics and politics