The serf system in Russia IIRC started with free peasants who sold themselves into slavery to the landowner when they fell into debt - unlike African slaves in the US, who were essentially kidnapped into servitude.
In the same vein people are taking up voluntary servitude in order to get a paid job - sometimes even paying for the privilege.
Moreover - a point not raised in the article - in expensive cities the only way a fresh graduate can survive without salary is if their parents subsidize them. Who can afford to do so ? Rich families. So it's a form of discrimination.
A company has no excuse for not paying at least minimum wage. If you can't afford the employees you need you shouldn't be in business, period. Any company that uses unpaid internships is morally bankrupt and should be boycotted.
Along these lines, it doesn't fit to equate unpaid internships to serfdom. Serfdom involves effectively permanent, near total servitude to a landowner for most aspects of life. You don't travel. You don't get educated. You don't have upside. You can't escape. You're screwed. An unpaid internship is not at all like this. Unpaid internships are not "essentially a form of serfdom".
If your labour has value then you can find work that pays you a rate for it (except for minimum wage - more about this shortly). You have the opportunity to expose yourself to experience by doing internships. If you don't have anything better to be doing, then it's a win-win situation for you and the person you're doing internship.
When I was young I worked in a computer assembly shop for basically no money. In the course of this work I plugged a power cable into a motherboard and fried it. I probably rubbed customers up the wrong way, and certainly did dumb things. My labour was worth less than nothing, and I was lucky to have the opportunity to be allowed near the place or customers.
As I became valuable I struck a private agreement with the owner and spent a summer working full-time, for which I was paid one gravis ultrasound ACE. I think I ended up better on the deal than the owner, but it was a close-run thing.
Another time I was contracted to do a job for an oil company. It took me a month to do something that would now take me a day, and the end result was so bad that they got no return on investment of the the AUD 300 they paid me for the job. Note that in the case of the oil company work, I already had most of a computer science degree, and so was more qualified than the average kind of person who lives on minimum wage and still near-worthless.
After spending some time working to build up my skills, I'm now happy with my career. I wouldn't be here except for working in situations where I was earning less than minimum wage, often with people giving my low money on the offchance I might not be incompetent.
The minimum wage is a horrible stain on a free society. It traps people with low skills out of work and cements them into an underclass that's much more difficult to break out of. It prevents business that are operating on the edge from continuing to operate. It's a classic example of do-gooders riding in and creating damage.
There is an argument in favour of minimum wage, and it's this: some people are too incompetent to be capable of standing up for themselves, and these people would be easy to take advantage of for malicious bosses, of which there are no shortage. The minimum wage is a blunt force mechanism that aims (and fails) to protect this set of people. The reason it fails is that in protecting low-wage employed people, it locks out people who are in a worse situation - unempployed.
It's a ridiculous solution that hurts the people it claims to represent. There are much better avenues that would be cheaper and have more positive effect on people: basic risk, valuation and business skills being taught in early high-school, television campaigns that encourage people to think about how their labour is used, what they could do to make themselves marketable. Mechanisms to get people speaking English more effectively. Lower taxation. Effective technical colleges.
The minimum wage system is a mechanism designed by the elite to allow that elite to paper over things and sleep at night pretending they're doing the right thing. It hurts the people it claims to protect.
You assume that the minimum wage is there to protect incompetent people but the reality is that when you treat someone badly like that, day in and day out, it destroys their self-esteem. You sound like you have grown up in a high self-esteem environment and probably can't relate to the poor mentality. It is a trap, it is created by the environment people grow up in and changing is difficult. For evidence, try changing your mentality and see how easy you find it. Most people tend to stay in one place in terms of their mindset for their whole lives, whether they are rich or poor.
If you honestly think that being paid a wage so low that you don't have enough money to bring yourself out of poverty is better than being unemployed, I have trouble not calling you delusional. Why should anyone have to work two or three jobs just to (barely) survive? How is this better than welfare for those who can't and a wage which results in living above the poverty line for those who can? How can you not understand that this would greatly increase crime? Think about it, imagine it - you're unemployed and have an opportunity to work 16 hours a day and you'll still starve or you could start selling drugs or robbing people or swindling money, which would give you enough to live on.
Honestly, your whole attitude reeks of ignorance. Go spend some time with people who live in chronic poverty, try to understand what they're going through and you'll be able to get around this.
Funny thing about comparing the US and Sweden, the US has a minimum wage and Sweden doesn't. What Sweden does have lots of, though is a lot of re-distributive taxation. If you go and look at actual real world economists instead of the caricatures that make it into our political debates in the US you'll find that most of them are actually democrats, and many like progressive income taxes, welfare, etc. But despite the fact that most of them like government spending, pretty much none of them like the minimum wage. You could say that Sweden is exactly how your typical democrat economist would run a country if they could, with Singapore being the conservative equivalent.
 Ok, their taxation structure is less progressive than the US's, but they spend much more of their taxes on services instead of, say, fighter planes so in practice its more re-distributive.
Looking at countries with no minimum wage, or, to put it another way, no formal organisation(s) to lobby for the rights of workers, it is clear that the results are less than savory (hint: the only country this applies to is North Korea) - http://en.wikipedia.org/wiki/List_of_minimum_wages_by_countr...
I think that the core issue is that the majority of people expand as much as they can until something stops them, which is why formal agreements are necessary at this stage of humanity's development. Few people are conscious enough to act fairly in the absence of law. I think that the long term solution to creating a society where a minimum wage is not necessary is education and a culture of personal development. When people stop outsourcing their morals to authority, they will make the right decisions.
No, but that's how serfdom started - through voluntary servitude.
The point isn't to equate 21st century Europe or US with pre-19th century Russia. The point is that serfdom is a form of voluntary servitude which people entered into out of desperation. Likewise, nobody works for free (outside of charitable work) unless they are desperate (or they are rich kids, and don't need to care). Companies exploit this through unpaid internships - assuming they can get away with it.
Saying "you're free to walk away" is not a moral argument; if the only way a young person can find work is through doing voluntary servitude then they are stuck in that position until they do so.
Minimum wage laws exist for a number of reasons. If people don't get enough from employers, who pays ? The welfare system, i.e. the rest of us. So employers can exploit the system to boost their profits. Second, how does it fail to protect people ? Since when did a living wage for a day's work become a controversial issue ?
If a potential employer chooses not to employ someone, who pays? The welfare system.
For either low pay or no pay, low value workers will require welfare. I don't see how this is a valid argument for a minimum wage.
Sure, workers on minimum wage may receive benefits - but they would require less benefits than if there was no minimum wage.
And this is with a minimum wage.
The store may even help alleviate the problem, by providing Some income for these people.
Its not very clever to ask WalMart to just pay these people more; how about UCBerkely show some sincerity and pay them themselves?
For example, they could have expressed how much is Saved the public per WalMart. They didn't express it that way. Because it made a more sensationalist article the other way.
The whole idea that the minimum wage causes unemployment is a myth that is based on incorrect labour market models.
That's because the minimum wage is usually set at such a low level that it applies to very few workers (<1.5M in the US, as of 2007), so very few natural experiments are available.
I'll give you one natural experiment, however. A min wage hike in American Samoa caused unemployment to increase by at least 6% (= 2041 workers fired by Chicken of the Sea / (65k American Samoans x 52% labor force participation rate)).
I disagree. My unpaid jobs have always been much more accommodating when I leave - they realize they're not paying me so they don't give me a hard time at all. It's more of an attitude of, "We knew this day would come. Good luck, and if you need references or anything feel free to ask." My paid jobs have generally been a bit more stubborn, like leaving insulted them.
Also, many unpaid internships give at least enough experience to have something to talk about in a job interview. I know my unpaid work was critical in landing a paid internship in January. While some people may take advantage of students and the poor work environment, you can't make a blanket statement and say every unpaid internship is unequivocally bad.
If unpaid internships become the norm, that is it becomes expected that a person has to perform a period of unpaid work as some kind of apprenticeship, then they will be forced to do so if they want a paid job at the end of it.
So I might walk away from an unpaid internship, but I'll still need to work unpaid in another internship until at such point employers deem that I've done my time.
Therefore the individual has no choice but to accept unpaid work - regardless of which company they happen to be working for.
It's a bad precedent that needs to be stamped out.
Do you believe that requiring/favoring people with college is also a bad precedent that needs to be stamped out?
What skills do you really mean to ask for? If you waste time asking for things you think imply those skills other people will be out-recruiting you.
It's a question of producing wealth. The value of a day's work depends upon the worker, but you can't seriously expect a business to pay someone more than the amount of wealth they create for them. If it's a fundamental human right to have a certain level of income, pass a law providing for a guaranteed minimum income and let businesses pay the market rate. It makes no sense to expect businesses to operate as charities.
You're joking right? Have you seen any of the immigration reform/debate over the last 5 years in the US? One of the primary arguments is over the availability of labor so cheap that not even prisoners will take the jobs.
If people don't get enough from employers, who pays ?
I think you're making a static view of the world, and are not considering the dynamic of the system. Legislation like the minimum wage has an effect on the economic systems that you apply it to. It changes the numer and nature of employers, and the number and nature of employees.
It's impossible to measure the opportunity cost, but we can talk about the sort of costs we'll be taking. There are potential businesses that would exist if they could pay less than they do. This would create greater economic activity in general, and skill development. Both of these things which would feed back into stronger businesses and ultimately demand for labour, higher wages, lower tax.
The Internet should offer us awesome opportunities to reduce knowledge asymetry coming from labour being misallocated, or taken advantage of. Consider a version of linked-in that was oriented around networks that tried to offer and make contracts. You could see who worked with who, and then the contracts that were on offer. I doubt Linked-in will go in this direction - it would piss off recruiters. It'll happen though.
Since when did a living wage for a day's work
become a controversial issue ?
A politician who made these arguments in I'm putting is remarkable to survive at all, and definitely hated for life - Thatcher is the obvious example. The last change of power in Australia was caused by exactly these issues. Chile is lining up to have it out on these lines in the next year and will be interesting to watch.
The caricature of the right wing leader who's out to screw the workers to help the big end of town is like honey to the mindset of people who see themselves as victims, and who don't recognise that they are in control of their own fate.
There's always a labour movement party (run by teachers, lawyers and party workers) in there reminding people that they are victims, pushing those images, and suckling on the milk of votes that this easy play delivers.
Except in American - a country where labour flexibility and entreprenerialism are central to the culture.
Another evil I forgot to mention about minimum wage earier is the trap effect. Imagine your effective wage is worth less than minimum wage, but you've managed to land a dead-end job making minimum wage. Now you have a disincentive to refocus on something that would make you more valuable than minimum wage.
That pattern repeats at other levels of the economy. You sometimes see areas of government, banks or protected "national champion" businesses dominated by people who don't do much but also don't make trouble. They're keeping a low profile because the employer is able to pay too much because of the luxury of its legislative protections. Left unchecked, the good staff (who care about what they do) gradually leave for other gigs, and you get overrun by pretenders.
There are plenty of incentives to make better than minimum wage. Minimum wage doesn't exactly net you a luxurious quality of life. On one hand, it makes sense that if you allow the purchase of labour to be completely subject to the rules of supply and demand, information about what is needed where and most efficiently will spread through the network of economic activities. But labour has several disadvantages when compared to other commodities. Focusing on just one, it is expensive and time consuming for a person to upgrade the kind of labour they can provide. Education isn't cheap, and you have to support yourself while you obtain it. Being able to earn minimum wage while going through school helps to open up the opportunity to learn more valuable skills for many people. Unless your intention is to leave people from disadvantaged economic backgrounds out in the cold and allow their difficulties to propagate from generation to generation, there needs to be some mechanism to level the playing field, if only a little. My own tendencies would be towards even more socialist measures than just the minimum wage, but at least it puts a floor on how bad things can get.
Being able to earn minimum wage while going through
school helps to open up the opportunity to learn more
valuable skills for many people.
I know this is veering off-topic, but I think it's worth pointing out that not every instance of the word "fascist" is disrespectful and to deny people the right to use it is just as destructive as when it is misused by people who don't properly understand what it means.
In many cases it is still appropriate and it should be used to call a spade a spade. For example, many European countries have political parties that are directly descended from the fascist political parties of the 20th century (e.g. ). They retain their objetives, ideals and often even their signature salute. There are several politicians in government right now that I personally dislike and that I describe as fascist because that's exactly what they are. Fascist politics existed for decades before WWII and they continue to exist decades after.
Life is too short to argue with someone about what their political beliefs should be called. The British National Party is a bunch of wrong-headed jerks regardless of whether they're "fascist" or not, and every moment you spend arguing with them over whether they're really "fascist" is a moment you really should be arguing with 'em about why their policies are stupid.
What exactly are these skills they lack that are needed in order to get work? Putting together a sandwich? Stacking boxes of food on a shelf? Putting dishes on a table and collecting them after they've been used?
For example, in the streets in the UK we have signs saying things to the effect "don't litter", "don't let your dog crap here", etc., and there appear to be lots of folk that can't even get that right.
Anecdote: my elderly aunties friend is about 50 and mentally disabled; her speech is very difficult to understand and she has problems with anything beyond simple concepts. Her memory doesn't appear to work well. Until recently (her mother died and she's no longer capable of doing the work) she worked in a department store cafe clearing tables and doing some cleaning - she did the work set as long as it was clearly communicated and she did it with a smile. I'd guess that any member of the population that can stand and dress themselves could have done that job.
It's not much of a life clearing tables.
That only works in an absolutely frictionless labor market. Meanwhile, in the real world, there are many sources of friction - location being the most prominent. If you have valuable skills, in say, graphic design and the one print shop in your town shuts down, then it doesn't matter how good you are as a designer - you're not going to get a job. Through the '90s, it didn't matter how good a machinist you were - if you lived in the Detroit area, your employment prospects were poor, just because of the glut caused by hemorrhaging auto industry.
>There is an argument in favour of minimum wage, and it's this: some people are too incompetent to be capable of standing up for themselves, and these people would be easy to take advantage of for malicious bosses, of which there are no shortage. The minimum wage is a blunt force mechanism that aims (and fails) to protect this set of people. The reason it fails is that in protecting low-wage employed people, it locks out people who are in a worse situation - unemployed.
Nice job with that straw-man. Unfortunately, the argument you cite bears no resemblance to the actual reason we have a minimum wage. The reason we have a minimum wage is that historically, its the lack of a minimum wage that has created an underclass of people in poverty that don't have the resources to increase their station in life. All throughout the 1800s and early 1900s the US tried to be your minimum-wage free utopia. The results were horrific. We had a permanent underclass of (usually immigrant) tenants living in squalid conditions. If you want to regress to 1890s-era working conditions, then yes, by all means repeal the minimum wage.
Lacking a minimum wage also hurts the economy. Without a minimum wage, the number of consumers for any good beyond basic food, clothing and shelter products would be drastically cut. History has shown that without outside incentives, employers will pay only the minimum needed to keep their workers alive (and sometimes not even that). A minimum wage ensures that there is a bottom in the race to the bottom for wages.
>The minimum wage system is a mechanism designed by the elite to allow that elite to paper over things and sleep at night pretending they're doing the right thing. It hurts the people it claims to protect.
If that's the case, then why do the elites always protest vociferously every time the minimum wage is raised? There are massive lobbying efforts by big business every time the minimum wage issue comes up for debate, despite the fact that there is no economic evidence whatsoever that the presence of a $7.25 minimum wage has had a measurable impact on employment.
Unlikely. Very few employees in the US make exactly the minimum wage, which is why it's true that minor increases have close to no effect.
There are massive lobbying efforts by big business every time the minimum wage issue comes up for debate
True, for example WalMart lobbies in favor of minimum wage increases. Out of concern for low-income workers, or to raise business costs for their competitors? Hmm...
Keep in mind how many products are imported from third world countries that have poor labor standards & low wages. The current US lifestyle is heavily subsidized by this cheap labor. Additionally here in the US there is often abuse with illegal immigrants who make well below minimum wage & work in poor working conditions.
Much of the third world is the way it is due to a history of instability, violence & repression, not necessarily a lack of well to do business men looking for an opportunity to avoid having to deal with pesky ideals such as labor regulation.
While it's great that Chinese have the option now of working 12+ hour plus days 6 days a week instead of going off & dying in a rice patty field, somehow I doubt philanthropic philosophy is the reason business goes to China.
Through the '90s, it didn't matter how good a
machinist you were - if you lived in the Detroit
area, your employment prospects were poor, just
because of the glut caused by hemorrhaging auto
there is no economic evidence whatsoever that the
presence of a $7.25 minimum wage has had a measurable
impact on employment.
But your logic is attractice. We'll just move the minimum wage up to a thousand dollars an hour. We can all be rich together.
What you had to say about history of minimum wage in America is interesting, I'll read up on that.
Without savings, how do you pay for retraining? Without savings, how do you pay for relocation? Without savings, how do you start a new venture of your own? Without a minimum wage, how does a person on the very bottom of the social scale accumulate savings? Without a minimum wage, wages for the lowest skill jobs get driven down to starvation wages. At those rates, its very difficult for people to accumulate enough capital to make the necessary improvements to their situation.
>But your logic is attractice. We'll just move the minimum wage up to a thousand dollars an hour. We can all be rich together.
Right, and while we're at it, we can move the top tax rate right down to 5%. The extra money freed up will generate so much economic activity that government will end up making money in the long run.
One common method is to work for free for a short time, until you gain the skills necessary to perform a new job.
Without a minimum wage, how does a person on the very bottom of the social scale accumulate savings?
By reducing consumption.
Where I live, the GDP per capita is about 40x lower than the US. The top 5% tends to have a standard of living comparable to the bottom 5% of the US. The savings rate is 20%, compared to +/- 2-3% in the US.
Luckily food, shelter & transport is free too.
Where I live, the GDP per capita is about 40x lower than the US.
Where exactly do you live & what is the quality of life for those at the bottom?
The average poor household in the US has 2 rooms per person, a car or two, air conditioning, and all sorts of consumer goods.
I recently visited a family in Bandra (one of the poshest suburbs of Mumbai). They had 0.75 rooms/person, no AC, an inconsistent and undrinkable water supply, no car and a single bathroom about half the size of any in the US (i.e., no separated shower stall). My understanding is that this is fairly typical for their strata.
They are in the top 5% (roughly) of India. If Indians can save 20% of their income, so can Americans.
Sheltered poverty in the USA means studio apartment, no a/c, no car, no laundry facilities on site, dangerous neighborhood, little to no public transport.
You also have dirt poor poverty which people commonly refer to as "trailer trash", where you have communities of poor people living in trailers wasting away their lives with poor choices & poverty.
Then you have the destitute poor which are those that live on city streets, eat a charity kitchens & often have drug or mental health problems.
I will say that the poor in the USA do have it better than the poor in India, but that's mainly due access to government assistance. Often the US poor don't have money to save because they bought an A/C, fixed their car, had to see a doctor or payback a loan they took out the week before to make ends meet. That or they live with subsidized housing & utilities and are given a tiny amount of welfare/food stamps which is lucky to last to the end of the month.
Go read the census article I linked to.
If you wish to claim the government's definition of "poor" is overly broad and includes huge numbers of people who are actually middle class, I agree with you. But that simply means there are far fewer poor people in the US than we currently believe.
I will say that the poor in the USA do have it better than the poor in India, but that's mainly due access to government assistance.
No, it's due to wealth, plain and simple. Take away government assistance and virtually all Americans still have more than $1200/year to live on.
a tiny amount of welfare/food stamps which is lucky to last to the end of the month.
If that were true, poor Americans would not be fat.
Firstly AHS has a disclaimer that it overestimates poverty levels. This can inflate who falls into the "below poverty levels". Also the AHS is counting totals, yes someone may have A/C but that doesn't mean they have a car or 2 rooms per person. Someone could have two rooms & a car that breaks down often, but no A/C. Someone could have all 3 and someone else could have 0. Also the AHS mentions that 11% of those below poverty don't have safe drinking water & 20% live in a neighborhood with serious crime.
Also rooms per person & A/C & a car may not illustrate quality of life. You could look at Brazil having a rooms per person ratio which is much better than India, but your life would still suck if you lived in the slums.
Let's just say that being poor in the US poor isn't a picnic. But I don't think that India is a picnic either. The poor in each country faces a different set of problems. Just because the US poor have more money than the poor in India doesn't mean they don't still face serious problems. Like the saying goes "More money, more problems".
No, it's due to wealth, plain and simple.
Is the US just magically wealthy? Where is wealth derived from? How does a country like India become wealthy?
Take away government assistance and virtually all Americans still have more than $1200/year to live on.
...and cost of living in the USA is exactly the same as in India?
Rooms per person, A/C and car may not illustrate quality of life, but they are consumption. If the Indian upper middle class can reduce consumption and live without such luxuries in order to save 20% of income, so can the US poor.
Also again comparing the US to India is not an exact science.
The next two groups—seekers, earning between 200,000 and 500,000 rupees ($4,376- $10,941), and strivers, with incomes of between 500,000 and 1 million rupees ($10,941-$21,882)—will become India's huge new middle class. While their incomes would place them below the poverty line in the United States, things are much cheaper in India. When the local -cost of living- is taken into account, the income of the seekers and strivers looks more like -$23,000 to $118,000-, which is middle class by most developed-country standards.
Perhaps not having clean drinking water makes other aspects of life cheaper in India. Does clean drinking water matter? Yes. But maybe not having clean drinking water is the trade off you make for being able to save 20% of your income?
Also there are very few places here in the US that are going to let you work for free to learn about the system works & then either hire you on or give you skills that are transferable elsewhere. Employers do not like desperation & want people who have qualification that match what they're looking for. They'd rather pay someone who knows what they're doing than waste their time on someone who's desperate for a job & is actually going to cost them money while that person subtracts from others while learning things.
If you're making minimum wage, there's not much consumption to be lowered. Rent, transport, and food will eat it all up (and then some).
Rent, transportation, and food are consumption. If they're eating up everything and then some, find a way to lower them. Move in with your parents if you have to, or share a place with friends. Learn to love rice, beans, and potatoes. Walk or take the bus. There are lots of options.
(This isn't abstract theory; I'm presently living on not much more than minimum wage, and I have a wife and kid.)
How many minimum wage earners have a MS degree like you?
This is true of very few of the minimum wage and less earners I've been friends with over the years. (I apologize, I don't have broader statistics than "people I know".)
It's amazing how little money you can get by on if you're willing to really cut back. I don't think it takes an MS degree to figure out how.
The entire rest of your post is frankly nonsense--it's clear you've never actually learned anything about economics, because most economists concede that the minimum wage doesn't really do much to help anyone, and if anything, only increases unemployment.
History doesn't back you up on this--the 19th century was a materially poorer time in the sense that less wealth was being created to begin with. While large numbers of immigrants lived in poverty, they voluntarily chose to live in those conditions because it was the best opportunity they had. If there was a minimum wage above and beyond the value their labor could legitimately produce, they wouldn't have had that opportunity and they would have been materially even worse off. More to the point, there is still a permanent underclass of immigrants living in poverty and earning less than the minimum wage in this country. When the relevant wage and immigration laws are enforced on that population, the net effect is that they're forced to live in the impoverished countries they voluntarily chose to escape from.
As for the rest of us, our recourse is to legitimately generate more wealth than the cost of our wages and benefits so that we remain profitably employed. The majority of the American population is doing this just fine without the government coming in and setting our wages for us.
That doesn't make much sense to me. The consequences of a minimum wage law are purely economic, on the people as a whole and on the employers and employees affected by that law, as well as on the people who aren't employed due to that law.
Why bother with any regulations, or indeed employee rights at all?
Some regulations are helpful; some aren't. I'm just talking about the minimum wage.
As for your arguments about immigrants - people may migrate to live "the American dream", but how many people's situations are actually improved?
That question is for them to answer. If they don't find their conditions improved, they're free to return home. (Obviously, I'm setting aside cases of human trafficking and so forth--that's an entirely separate issue, and I think we both agree that human trafficking is wrong.)
Yes there is friction, but how does that effect whether internships are a good idea? By far the biggest source of friction in technology hiring is the lemon problem, and internships actually help get around that by providing references. You could credibly argue that unpaid internships are a good idea only in highly frictional labor markets.
As to location, well, if there aren't any jobs in your industry locally there won't be any internships either, so that's a distinction without a difference in this discussion.
Uh, wage slavery? How much of a person's salary is spent just on the basics such as food and clothing and gas and education?
This is how the system is structured; there is a permanent underclass that will accept any wages. Even more educated people will lower their wage expectations when the economy appears bad. This means that companies can get cheaper labour at any time to pick up slack or as replacements if their current workers get too uppity and demand a living wage.
it locks out people who are in a worse situation - unempployed.
Unemployed is only bad if it means starvation or homelessness. In a socialist, communist, or anarchist society unemployment would be okay. Unemployed workers wouldn't starve, they would still be allowed to live, and they could take part-time jobs/unpaid internships and learn new skills without worrying about making ends meet.
There are much better avenues that would be cheaper and have more positive effect on people: basic risk, valuation and business skills being taught in early high-school, television campaigns that encourage people to think about how their labour is used, what they could do to make themselves marketable. Mechanisms to get people speaking English more effectively. Lower taxation. Effective technical colleges.
So your solution is to train people to become effective human resources for businesses to consume? That doesn't help. We already do that.
You're saying that workers need to learn how to be better workers so that they can prosper. You're saying that they should make themselves as appealing to businesses as possible and somehow, you're assuming that this will give them higher wages. The only reason people get higher wages is because they demand them either through a union or through an informal agreement with other workers that they won't work for less. This is true in the IT industry and is one of the reasons why IT workers don't see a need for a union. We all have agreed never to work for a shitty wage. We know that we can just take our skills elsewhere or start our own company or whatever because we stand up for ourselves.
Psychological studies indicate that unemployment is bad even if you can still live comfortably. (A reliable stream of anecdotes for extreme variants of this observation comes from lottery winners.)
The thing is, HN is a very startup- and hacker-centric community. One of the properties of a hacker is that they always find something to occupy themselves with, even when they don't have a formal day job.
Most people are not like this. Once they're out of a job, they don't really know what to do with themselves. This causes them a lot of stress and unhappiness.
Over time, they will convince themselves that they are actually happy in their welfare-dependent unemployed state. We humans can so easily fool ourselves.
The truth is that for most people (but probably not for many of the HN-type) unemployment causes a lot of psychological suffering.
You're undervaluing yourself.
Even if you did absolutely zero work that doesn't mean the company that "hired" you got zero value out of you.
They probably got some social benefits from having you around, making the place you worked at less lonely, and perhaps making some people at the company feel better about themselves for hiring an intern or gave them an opportunity to teach (which can help the teacher as well as the student). You probably also gave the other employees ideas and feedback, and may have tested some of the work they did (essentially acting as part of QA).
All of that is worth more than a cheap sound card or 300 AUD.
Companies do everything they can to prevent market signals on what wages are worth so they can rip people off. Couple that with the fact that many people who are technically very good are not good at negotiation. A strong union (i.e. not what the US has) can help with these problems.
"The minimum wage is a horrible stain on a free society."
Maybe not taking your own advice here?
So, you have a pattern where:
- More people are going into higher education
- We are in the middle of a deep recession
- As a consequence of these factors, there is less public money per student, so students have to pay more
- As another consequence, a degree is worth less than in previous decades
- Employers see a college/university degree as a requirement, even for jobs that don't really need them
- Unpaid internships are therefore seen as a differentiating factor when hiring graduates
So, in order to climb that greasy pole, you need a) the money to get a degree and b) the money to work unpaid while you gain experience. In the past, you had the option of starting work as a teenager and working your way up, or being one of the few to go to university and having your costs paid, with a good chance of a higher paid job at the end of it.
In this brave new world, these doors have been firmly closed to kids from poor families. Of course it benefits the rich kids and I wonder, half-jokingly, if this isn't an intended consequence of the richer Boomers ensuring an easier ride for their progeny without competition from the hoi polloi. In any case, I fear for the future of a country where advancement depends on connections and family money rather than ability.
Some of the fallout: "Calvin Klein’s PR firm Modus admits on national TV: '20 of our 70 staff are unpaid interns'"
Terrible youtube version starts at: http://www.youtube.com/watch?v=vNRP8xc5aFA
Don't forget the classic, which I've seen come up during two crashes now: "Only accepting applicants with a degree from a top-ranked school." I don't know if you get that over there, but it seems to get really popular as soon as the economy tanks.
Anyway, your analogy will seem more believable we start to see the children of interns forced to work for the companies that their parent work for, interns being paid with tickets only redeemable at the company store, having to ask permission to marry, only being allowed to marry other employees, not being allowed to move off the company campus, etc... lots of a way to go on the road to serfdom.
Intern: skills + experience = $0
College: no skills + no experience = student loan
When I was just starting my career, I would have gladly worked for free as an intern to get my foot in the door of the industry. Now, I wouldn't have done it for -long-, but internships aren't supposed to last a long time. As it was, instead I spent a year unemployed, and then took a job as a stock clerk at a grocery store. That time would have been much better spent as an intern... Especially since I think I could have found a job after 3 months of being an intern. 6 at the most.
The reason his entire post is wrong is that the person DOES get something out of it. They get training (whether it was structured or not is a different matter) and they get experience. Guess what helps you get a job most in the IT industry? Experience.
As for being hired, any company worth their salt will offer a real job to anyone who shows skill. Job offers should never be automatic.
You can get experience and not get paid working on any large open source project. You'll probably get even better mentoring.
In fact, it's not that hard to get paid doing open source work now that you have GSoC.
In that situation, the intern should be working for free (for the experience) and the company should consider any actual output to be compensation for the time spent having to help the intern along.
As the post's author noted, the 2 job descriptions he linked to do not fit the above criteria.
Any company that expects actual productivity from an intern is in the wrong.
Maybe we just had unusually good interns, though (this was in the Netherlands).
Complicated tasks need guidance and take time. But they're great for experience.
It's not even that they're really hard tasks, but that there are so many little details to software develop that everyone treats like common sense, but it's not... Until you have experience.
 To be fair, one was putting my sample code in production.
You pay experience to interns. (IE People who take time from efficient employees and produce little output.)
When I started work I produced little output, because I was a newbie and knew nothing. I was paid just a little over minimum wage - but I still produced, even if it was crappy code and routine tasks nobody else wanted to do.
Companies used to do this all the time - you start at the bottom, fresh out of school, and you have to learn.
But you are still f*ing paid.
If (as an experienced hire) you start a job somewhere enterprisey, the amount of bureaucracy and induction procedure you experience in your first week can mean that you won't be a productive employee for at least a week, if not two. You'll probably still be taking time from experienced employees for months. You still get paid.
In such a place, the first week of employment of an experienced hire is exactly the same as it is for an intern.
Yes, an employee takes just as long to get up to speed as an intern, but hopefully that investment is paid off by years of work afterwards.
For a two or three month internship, you might spend half their time in getting them up to speed. And for that, you get the same amount of work (best case), then they are gone.
Yes, internships can be a great way of recruiting, probably the reason most companies do them at all, but saying that the upramp is comparable to normal FTEs is ignoring the fact that they aren't long term.
My point (possibly not particularly well made) was not that you should take on inexperienced pretend employees, treat them like real employees for three months, then get rid of them; but that you should take on inexperienced real employees and treat them like real employees.
Three months is a pretty normal probationary period for a real employee, so you can just as easily get rid of one if it doesn't work out; as you can an intern.
Very dependent on the type of internship. I saw one (unpaid) internship offering to give people experience working in a convience store. They basically wanted a normal employee to work as a cashier, but didn't want to pay them.
I interned at a few different places while in college, and I was definitely way ahead of the class as far as writing useful code. Regardless, the overhead of people bringing you up to speed on their specific projects and processes for only three months of work just doesn't match what you are going to contribute. The cold hard fact is that you are still junior, very junior, no matter how much a hotshot you think you are. So the time they put into you makes it a pretty even trade for it not to be paid.
Though come to think of it, both internships I went to were paid. But the point stands.
To put it simpler terms, ask any company whether they find new college graduates effective and worth the overhead for the first few months they work. I doubt many would say yes, and those are people more qualified than those seeking internships.
So, interns are definitely not always a burden, but I certainly do understand that they often would be, but to be honest, you get what you pay for - if it had been an unpaid internship, I'd have had very little incentive to really put much effort into it. I mean, months of unpaid work would be demoralizing and I'd probably quickly have ended up producing little of value.. Luckily it never came to that and I ended up going back to work at the company for another 1.75 years, before I left to try out the world of freelancing and startups.
For the record, that company hires between two and five interns every year. They find it effective enough to keep doing it. They treat it as much as a hiring thing as a cheap labor thing and they find having (paid) interns to be pretty effective.
In a way you are agreeing though, as you said, it took two months for you to be working on core services, so there is a significant ramp up time. If we are talking about a summer internship then it is questionable whether you will really add more value than extract. This is irrespective of ability level and just the reality of getting to know an organizations processes, codebase, etc..
In any case, I'm not quite sure what the article's beef is. If there was no market for unpaid internships, then there wouldn't be any. Clearly some interns are finding it worth their while enough to go work for free.
Do totally agree that it is an absolutely awesome funnel for candidates though, and worth drawing those candidates in via pay or other fringe benefits.
Having said that, I don't disagree - it definitely does have a rampup time and I don't disagree with that theres a market and value in unpaid internships, especially short term ones - I'm just saying that I also think theres value for employers and candidates alike in paid internships too.
Plus, if you're hiring good interns, they will absolutely benefit you if you let them. Sometimes hugely.
An intern made Joel Spolsky several million dollars: http://www.inc.com/magazine/20090101/how-hard-could-it-be-th...
Not saying I was any good or my employer was any good, but at my first internship I wrote software in my free time that ended up saving the company tens of thousands of dollars a month.
I actually went to a school that required every student in my program to do a minimum of 1 year of paid internships (split into 3 and 6 month blocks). Judging by how abundant and competitive the companies looking for interns were I'd say they found it very much worth the overhead.
Back in the day, when I started my career, to get my foot in the door, I worked at a temp agency. "Word processing" was all the rage and they needed people who knew how to use Microsoft Word. After a couple of months the boss noticed I knew how to spell "glaciolacustrine" correctly, so he asked if I had a degree. A couple months later I was hired. All the time I was getting paid $10/hr.
That's the way firms should be finding and cultivating young talent: paid internships, temp services, and recruiting. Unpaid internships are indeed bullshit.
One trend that really scares me is that there are some "career experts" whom I interact with regularly who offer their own unpaid virtual internships (I've seen lots of other internships like this, but the fact that career experts who are supposed to help interns are offering these really blows my mind). These are people who don't have the ability to offer many of the benefits that do come with an unpaid internship such as making connections, learning what it's like to work in a real office, having a recognizable name on your resume, etc.
Another trend that scares me is that we're seeing more and more internships auctioned off in charity auctions. Rich parents actually pay for their kids to get some experience.
Unfortunately, interns aren't going to be the ones to stop this trend. Unpaid interns do benefit from their internships. They mostly accept it as something that they have to do, and they know that if they refuse to take an unpaid internship, there are thousands of other students who will snap up the opportunity.
Change is either going to have to come from employers or the government. I strongly believe that offering paid internships is more favorable to employers because they get better quality interns who are more motivated, and the employer has a stronger incentive to use the intern's time well.
Here in the U.S. there are already laws against unpaid internships. I wrote an article on it here: http://www.onedayoneinternship.com/blog/are-unpaid-internshi...
There's actually an excellent and fair standard for determining when an unpaid internship should be allowed; however, I've never heard of an employer's being prosecuted under the Fair Labor Standards Act for having unpaid interns. And if the law were to start to be enforced, I'm not sure the outcome would benefit students in the short-term. There would be a lot fewer opportunities as many employers would get rid of their internship programs. This would result in even more competition for what paid opportunities were left.
I really hate unpaid internships, but I still haven't figured out what it's going to take to make them a thing of the past. They've become an essential part of the transition from education to employment, and messing around with that in a time when really talented grads are struggling to land jobs probably isn't a good idea. We may have to wait until the economy really heats up again.
If there are only a few internships available in a given field, having an internship would no longer be a de facto requirement for starting a career in that field (unless the handful of new employees who got the handful internships are all the new blood that's needed, in which case the unpaid internship system is just another way to string people along).
Ireland has been hit by a strong recession. Unemployment is high (~15%), and particularly high amount young people. Many are emigrating to find other work. The media is full of stories about how there are no jobs.
Which is a shame because there is a massive skill shortage if you know programming/sysadmining in Ireland. Companies spend months trying to find employees.
I have siblings working in fields which were quite dependent on the housing bubble and as such they have been out of work for some time.
On the other hand, every IT recruiter I know here is complaining about the lack of candidates and I've had as much work as I've wanted in the past few years.
To be fair a few years ago one quarter of working men worked in construction. That's just crazy.
At least in 2006 it was rather easy to get a tax identification number (I forget what it's called) with a signed affidavit and a witness saying you live at some address, and you can use that to get work. Now, without better documentation the government taxes you at the highest rate possible, and since you won't file you'll never get a penny back.
Also, they worked in card houses, so maybe the documentation requirements weren't as strict as a professional programming environment. Oh, and I'm sure it's all sorts of illegal. But just doing it is easier than it seems. :)
I suspect, but amn't sure, that this is more felxible, and I think they include Northern Ireland aswell, i.e. they include "the island of Ireland".
(Which makes sense, the country now known as Ireland didn't exit until 1922, I'm in my 27s and by grandmother was born in the late 1920s. Someone in the 50s could have a grandparent born in what was then the United Kingdom of Great Britain and Ireland.)
For the right job I'll offer a trial period. Usually a one-two month stint followed up by a buy or fly decision. Play it right and you have a lot of leverage. They just finished training you and you're showing a lot of promise out of the gate. In the managers head they are dreading the idea of having to go through the interview process all over again. The key is not to go looking for people offering unpaid work, but to find people who want to pay and make the buy decision easier.
When negotiating keep in mind that you have nothing to lose. If the job is unpaid you gain by leaving. The other side of the table has a lot more at stake. They lose someone they've spent a lot of time/money training, and they have to start over at square one with someone new. Don't underestimate how hard it is to find good people. Frankly if they aren't going to pay you then chances are you aren't that good, or the managers are fools for not trying to keep good people. In either case what would you gain by staying?
The current situation is pretty different though - there is a huge lack of all kinds of IT people and it is really easy to get a job.
I don't think this will always be the case. As more people work on things that scale, the importance of quality will become more obvious, and employers will be more motivated to find the best. On the intern side, as it becomes more obvious to people how vulnerable large firms are to disruption by agile startups, the knowledge of how to price, value, and market oneself will become more widespread, and fewer grads will be taken unawares.
What's even more galling, from my perspective, is the government is taking money out of the pensions of private citizens to pay for this "jobs initiative".
A company should be invested into their interns and the best way to be invested is by paying them a wage and expecting decent work in return.
But even we pay our summer interns.
I figured something out when thinking about this one day - where you're going is how you'll get there. If your goal is to make money, your goal is greed and your path will be a greedy one. If your goal is to make a positive contribution to those around you and get one back in return, then you will still make money but won't step on peoples' toes in the process.
If you really can't find anything it's better to make nice portfolio projects for yourself at home or work on some opensource project. It's similar experience but feels much better than working as slave for some awful company that can't even afford small wage.
They see it as gambling money: if they find a good guy, they will try to hold on him. Otherwise, even a 1k wage doesn't really cost them much.
Also: Good interns usually are not available for hire after their studies, so its money well invested.
Not only are the guys getting decent pay but they are building a useful in-house app while getting trained up in technologies like OS X, Linux, Git, Ruby, Rails, MongoDB etc.
TL;DR - It’s an interns fault for taking crap free work, in essence putting their future in someone else’s hands.
My experience: 3 years ago I was an accountant and thought about killing myself nearly every day. It used to take me 10 - 15 minutes to get out of my car every morning just to walk inside. I was able to use free work to transition from a boring career to one I enjoy in an incredibly short amount of time.
Rather than go back to school only to finish in debt and start at the bottom I was able to trade valuable work that I could do (finance/accounting) for experience in work that I wanted to do (development/data analysis). I would always suggest short projects so as not to overwhelm either party, but this turned out to be very favorable in the long run.
One major caveat is that these were not company created internships. I wasn’t in the business of letting a company compile all of their shitty work only to pass it off on someone to do for free. THAT IS WHAT NEEDS TO BE CALLED BULLSHIT ON.
If a job seeker shows just a little initiative they can force free work to have a training component that is defined in advance and one from which they will benefit. Too many workers put their future in someone else’s hands by assuming the company has some training program mapped out for them. Not surprisingly, these are exactly the types of employees who continue the cycle of useless and exploitative internships that you rail against.
If you are doing work for free, YOU are on the hook. You hold most of the cards because there is nothing forcing you to continue working.
So, why should someone be paid for not contributing to the bottom line?
That seems like a false dichotomy.
I'm at an internship right now getting paid quite well and I'm contributing to their bottom line (albeit indirectly since I am working on internal tools). I'm also learning quite a lot.
Paid internships are great for folks like you and me. In school with some good foundations in programming but really need to learn a lot more. The best opportunity for that is on internal tools where if we screw something up it won't be customer-facing and potentially lose money.
unpaid interships aren't producing anything. If you are getting paid, then it's not really relevant to the discussion of "unpaid internships."
Sorry if you don't understand. Your ignorance doesn't make me wrong.
Regardless, being right has nothing to do with popularity. I mean, enough people watch Fox News. Besides, I'm not the one support unpaid interns doing illegal work. And before you try to chime in with some quip about straw man, unpaid internships are the topic, not paid work. It's what my comment was about. A few people disagreed.
Whatever. Go back to your "popularity makes it right" way of life.
I am not convinced it's a net win for society.
My outside view is that a lot of Americans pay thousands of dollars to go to university.
Universities are, for a lot of people, just a means for learning a discipline and giving them more/better possibilities in a future job search.
While most internships aren't as "prestigious" as a university degree, they probably don't cost as much either.
In the end, both of them will have allowed you to make some new contacts, learn trade-specific things and add a new slot on your résumé.
p.s. this certainly doesn't go for all professions/internships. But the general direction seems about right.
But it is also up to the intern to decide whether or not our internship is right for them. A overgeneralized diatribe like the one posted is aiming to get people to not intern at all, whereas the appropriate act would be to critically evaluate your options, and make an informed decision about each specific company.
I want to be able to buy gas and keep my car maintained so I can actually come to work, so I'm not "engaged". If I want to pay enough of my tuition up-front so that when I graduate I can afford to work for small companies doing interesting projects, instead of auctioning myself to the highest bidder to cover my loan payments, then I'm a "bad fit". So be it, I guess.
There is much talk of a "sense of entitlement" when talking of young people today. I've not seen much evidence of that, but what I have seen is a "sense of entitlement" among companies - many of whom are certainly not hard up - with regard to taking on untrained employees.
That said, I completely understand that my experience was the exception rather than the rule. Plus, both companies I interned at most likely could have afforded to pay me too.
The second situation is, when students try to get a job, which a lot of people want to have, like at Google, Price Waterhouse Coopers and so on. In this situation the brand alone will help them out later to get better jobs or even give them a chance for a full time job in this company that others can't get. It's a little like doing a start-up. You put in a lot for the small chance to get a unnatural big payoff.
In both situations I can't disapprove of unpaid internships. I hope with sharing these experiences, other readers might get a more objective point of view. It is not all bad about unpaid internships!
I'm not suggesting this was fair but it was a pretty clear case of supply outstripping demand, which meant that employers could afford to let the system develop this way.
Personally I would feel like an a-hole offering someone minimum wage to do intern-level work at our startup. Nor would I want it on my resume that I worked as a web developer for $8/hour. They do not want a market price that low on their skills. They'd rather have a free internship on paper.
That said, it does all depend on context. In fact during high school I worked in a bio lab for free for about 50 hours and then asked for a paid internship (which was minimum wage) during the summer. However I was a high-schooler, so this was cool. But I would not have taken (and in fact turned down) low-paying jobs after college. So I can see that context does matter, and I don't think it's fair to rip on all unpaid internships with the same stroke.
shrug worked on me. 600 dollars for a parttime research thing during school for a term that worked out to $9 an hour, felt way better split into 2x300.
Am I clueless, or are other people just ignorant?
The "idea of an internship" is experience and networking if you're the intern, recruiting if you're a smart company, and free/cheap labor if you're a dumb company.
"Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer 'derives no immediate advantage' from the intern’s activities [. . .]"
I learned a crap-load of stuff there, technical and otherwise. I am enormously better off having taken that opportunity. Would I have been worse off if I had worked on stuff that directly made them money? No.
My friend has left to work on his own startup, but I started this week as a paid intern. I hope to keep working part-time when I start school again.
I cant speak for other people's experience with less-scrupulous employers, but I have nothing but gratitude for the people who gave me my unpaid internship.
The 3 MAJOR problems are:
1. The company is sending a signal that says, "we don't trust you", "we don't think you can do valuable work", "and we don't value you enough to pay you"
2. The company gets lower skilled people, because the good ones get the jobs with good experience AND pay
3. Have you EVER tried to get a volunteer to do anything?! It's impossible. Incentives are not aligned.
I've seen both unpaid and paid interns treated poorly. I've also seen both thrive. I personally had 2 paid internships before I graduated college. One was demeaning and the other an incredible learning experience.
If an unpaid opportunity offers a lot and you can afford to take it, why not? How is this different than contributing to open source or doing pro bono for charities?
However, if a company doesn't want to pay, I'd suggest more caution. Ask lots of questions, and if you end up just getting people coffee, quit. Interns are working professionals just like anyone else and deserve equal respect.
The thing is, you have to be able to cut it and basically interview as someone who they would WANT to hire as a FT after a year or two more experience.
In California, unless the work is for course credit at an established institution, an intern must be paid minimum wage. If not, the intern can do the work, and then file with the state, which will then do all the investigation. The intern doesnt need to get a laywer. They get the state's lawyers looking for a hefty fine, back taxes, and the opportunity to audit the hell out of someone. Start-ups are especially vulnerable to this because programmers who would normally be exempt probably aren't making enough and should be paid overtime. The state doesn't care what those programmers want. They want their back taxes.
You are not going to work there to do slave labor, you're getting bullet points on your resume, mentorship from senior engineers, as well as taking in the business environment which you've probably never seen before.
I hope no college student who can't find another option has decided to stick his nose up at an unpaid internship because of this post.
Banning them is unlikely in most countries as it's politically unrealistic. Exhorting companies not to do it is unreliable. So not easy to close off intern demand.
Tackling the supply side might be a better bet. The answer might be in educating grads to mentally file internships alongside diet pills and pyramid schemes. Providing alternatives also good (but more difficult).
The first is what you describe, scamming desperate people during a economic depression out of free skilled labor that has monetary value to the company.
The second is internships at places like magazines, newspapers and politicians offices. These ones are more interesting. Poor people and minorities can't afford to work for a year for free. But the children of the rich can. The internship provides cover to avoid having to hire minorities since hiring takes place from the internship pool.
Poor people and minorities? So minorities, even if they happen to be individually rich, can't afford to work for a year for free?
I felt under valuated, I can make really complex s/w architectures, solve complex, challenging problems & I was doing work that I could've done as a 14 year old during the internship..
Or perhaps the potential for learning a lot (practical knowledge) in a short time is greater in software dev work than others?
For an unknown company - not a chance.
But if someone fresh grad is duped into believing doing unpaid work will get him something else then its bad.
As a student, I see this as a way of getting something on the resume to break the catch-22 situation of having zero experience.
With most of my bosses, I had the following deal: "I have no experience, so every task lasts as long as I think I need. You pay a low wage, so if you hit one of the points where I am actually experienced: you make a good cut. If you assign me to tasks where I have to learn everything: you make a bad cut."
It worked great, if you know the line where you shouldn't force those terms.
Its a business and working for free is harmful to everyone who wants to make a living from it.
Look at it as a freemium model.
If working as an unpaid intern is indeed horrible and so incredibly lacking in non-monetary value, then people will learn there is no reason to voluntarily engage (or continue) in such a relationship.
We do not pay our interns and still lose money in the process if we don't hire them after because we have lost too much time not just training but also fixing errors people at their first experience will do.
Nevertheless we still invest on internships because that's the only way to snap good talent just out of university.
So please, stop the bullshit.
Yeah, and downvote away.