Are you saying that instead of letting people make their own choices at an individual level as to whether or not the experience is of value, it's better for government to just ban the choice altogether?

First of all, if you have a minimum wage law (which we do), it has to be enforced. Allowing people to work as "unpaid interns" is a half-assed way that corporations take to work around that law. You can argue about the efficacy of minimum wage laws, but it seems like real empirical studies (instead of just theoretical arguments) have been pretty inconclusive. And overall, the point is that you can't just let people create a massive loophole in that law by just deciding not to pay people at all.

Secondly, from a simple ethical standpoint, unpaid internships privilege people who are already well enough off to be able to give their labor away for free (i.e. generally middle-class or wealthier kids whose parents can support them). You don't get a lot of poor kids applying for unpaid internships at age 20 or 22 because, guess what, they need those 40+ hours a week to actually earn an income. So the tradition of unpaid internships in certain traditionally white-collar industries tends to be a subtle form of class discrimination.

And recasting it as a "volunteer" thing is also a total cop-out: you volunteer for a non-profit charity, not a for-profit corporation.

By this logic, should we ban or let government set prices on everything? After all, any free giveaways causes pressure on substitutes to go down in value. So by setting a price on a good or service which is below what some other guy has, you're essentially being "exploited".

Class discrimination? Right, so you're arguing that it's not fair that "middle-class or wealthier kids whose parents can support them" have the privilege of unpaid internships so this practice should be stopped?

As for empirical studies, the problem is that it's very difficult to isolate the variables but when it comes to understanding simple price floors and price ceilings, it's a pretty simple, conclusive relationship. Further, the studies are pretty clear in my books with the overwhelming evidence of cause and effect of minimum wages (sure there are those that are inconclusive, but if you're looking for a "scientific consensus" - you won't find the average economist saying that it's inconclusive unless they happen to work for a union): http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm

Absence of evidence is not the same as evidence of absence.

> And overall, the point is that you can't just let people create a massive loophole in that law by just deciding not to pay people at all.

I, for one, don't have any problem with people finding "loopholes" in bad laws.

> So the tradition of unpaid internships in certain traditionally white-collar industries tends to be a subtle form of class discrimination.

Class warfare? Seriously . . . ?

If you disagree with that logic, that's fine: just explain how I'm wrong instead of just dismissing it.

. . . and claiming otherwise, specifically when those sets of people are identified by social or economic class, is pretty much "code smell" for "class warfare".

We don't. The government takes the logical position that all such internships are illegal, so regulators don't need to make that subjective judgment.

In this light, the answer to your second question is "yes" -- the government is erring on the side of worker safety. It's a judgment call, and you can disagree with it, but both sides of the debate have perfectly reasonable arguments.

It's not perfectly reasonable to the person being denied the choice. Clearly for the employer, the task(s) aren't of sufficient value to pay for the work otherwise, if they couldn't get unpaid workers, they would just pay for it.

Instead, banning the practice makes society tangibly worse off as the work on the margins isn't being performed and the next paid job the unpaid intern will get will likely be lower paid on average because they have less experience.

Just because a job is attractive, doesn't mean it's going to further your career or somehow increase your value. And if you can't pay the bills while you're pursuing it, who ends up paying? Not the company who got your hours for free.

But presumably this isn't the case in some job like telemarketing or other really marginal menial tasks that you might realize within the first couple weeks if not month of doing it?

That's called a "gamble". The potential for loss is inherent in that type of decision. Does the potential failure mean the potential win should be prohibited?

How else would you describe a response that doesn't even take into account the possibility that one could avoid government regulation when there's apparently no solid proof that regulation is better than the lack of regulation? It sounds like a knee-jerk response to me.

Why don't you default to "We shouldn't spend a bunch of extra money on regulation when we don't have any reason to believe regulation will help, or even won't hurt!" instead? If you have some meaningful, reasonable explanation for that choice, I guess I might have been mistaken about the idea that it's a knee-jerk response, but you haven't shared any reasons so far, and there aren't any obvious explanations for why wasting resources on regulation that might just make things worse is better than avoiding that regulation.

You may not like the values the law represents, but you can't attack its implementation as subjective.

I believe the law protects people (specifically young people starting their careers) from exploitive practices. It also hurts them by penalizing non-exploitive and beneficial practices. I personally beleive the protection outweighs the potential benefits in this law, and thus agree with this law.

Is this a little big brother'ish? Perhaps, but nonetheless I would vote in favour of it.

I presume you accept that the young person would only do so if (a) they weren't able to find a paid position, or (b) the experience they believed they could get would exceed the pay they could get elsewhere - and presumably therefore would result in future benefits?

If a telemarketing firm had approached me for a free internship with the promise of riches once I put in my time, I may very well have turned down paying positions at McDonald's etc. I'm not trying to say most of us are dumb coming out of school, but I do believe that the fake pot of gold is pretty appealing and that there are many ethically questionable companies who would make all kinds of promises if it would benefit their bottom line.

I think the system where these companies are forced to act at least somewhat ethically by paying a minimum wage is a good system.

I think there is and should be a line though. If you are unable to value your work properly, young or old, then maybe you simply don't deserve to make more than minimum wage. I don't think society should pay for your bad decisions beyond a certain point. However, I like that you can still at least make some sort of living, and I think the company that is benefiting from your poor decision making skills should be footing that bill, and not tax payers. It would be infuriating to pay a wellfare tax while the persons receiving the benefit of that tax are passing it on to companies where they are working for free.

A company could get an extremely discounted rate for certain services if they were able to hire free interns. Then to take it to extremes, if a publicly traded company could gain a competitive edge by doing this, then it's practically illegal for them not to.

I look at it on a pricing continuum. On the extremes, would you pay nothing to get work done that you considered to be important for your business? I mean I employ a number of people and I'm pretty sure I don't pay in the lowest quartile or even half of comparable skilled positions. It's almost the same as buying any product or service, price is just one factor. For most people it's about the overall value. I think this also applies to hiring (at least for me). (I didn't realize that unpaid internships were possible - and like you probably, coming from Canada it's a foreign concept that I hadn't heard of until working in the US - but it seems like a reasonable idea to pay as little as possible during a probationary period before hiring someone for good only given the high costs of training involved with entry level positions?)

There are some great articles at http://www.no-spec.com/ that describe a fairly similar problem.

Let's say I'm starting a business and require a large amount of data entry. I categorize this work as grunt work for the most part. I get free interns to do it since I don't have the capital to pay anyone for it. Let's even say the availability of free work prompted me to start the company in the first place. I sit all these interns in cubicles and have them populate my application. What I'm not doing though is keeping a really good eye on the content their grabbing, copyright infringements etc. because to me, this work is free, if one of them messes up I'll just replace them. I don't have the time to babysit this free work because I'm busy running other parts of my business.

Now, if I was paying for the work I would value it more, and keep a closer eye on it. Why? Well beause I'm paying for it and if I'm paying for it, I want to make sure I'm not getting ripped off. We only value something when it costs us something. Just like we only value the poker pot once we've invested in it. I wouldn't value a free intern nearly as much as a paid intern. This will be reflected in the way I treat the free workers (lack of respect when they are easily replaced, because if I actually respected them, well then I'd pay them), it will reduce the interns sense of pride in their work, and it will definitely degrade the quality of work.

Now there are definitely exceptions, and maybe this article is one of them. However, by and large I think free workers is a really bad idea, and therefor I agreed with laws that prevent this practice.

re: No Spec - yes, it's a position I sympathize with but at the same time, I don't believe any of these markets operate in a vacuum. Given the tensions in the spec market (or any service that seeks to be sold based on price/free), over time it seems almost inevitable that it attracts the bottom end of the market. It's the same reason why I try to make sure I don't underpay employees or service providers as the cost can be far greater in the long run if you do.

re: large amounts of data entry. Having had to do it at one time for a professor, though I was paid, being paid did make me feel as if I had an obligation to do it as right as possible without allowing bad data to fall through the cracks. I'd like to think I was better than that but frankly if I wasn't paid I suspect I would not nearly have been as careful. But that's the thing - sometimes you get what you pay for - and especially for the more menial tasks if you don't value the output that's fine but there was still a cost for the professor to manage the project and there was indeed value to the underlying data that he needed to be accurate. Indeed - often the cost of the overhead is a significant cost of the underlying wages - even more so I suspect for entry level positions.

Such is the case for managing volunteers or unpaid interns for which I don't really see too much of a differentiation. The way I see it is that unpaid work is essentially producing a sample of your work for sale. Sure you don't want to keep on doing it, but at least in a market these things tend to work themselves out. As for spec work (or any industry that provides free samples) - are also of the view that this should be made illegal?

As long as it's the businesses that foot the bill then I really can't complain right? However when it comes to free interns the consequences are either paid for by the people, or it's limited to those that can afford to go without a pay check. If I'm paying for someone's rent and food stamps while they get an education / experience / whatever as an intern, then I'd feel better if I knew it was a respectable education / experience etc.

I simply do not believe free internships will give me this piece of mind. On a case by case basis, sure there are probably plenty of great free opportunities, but this is shark infested waters imo. I think the majority will see very little benefit if the floodgates were opened.

It also sounds like the way you run your ship is very ethical and mature. While I'm sure plenty of other business would be just as fair, I highly doubt they would be the majority. In fact I think you would be part of a very small minority. The words Free Interns would attract a lot of attention. Maybe there should be a qualifying process that a company could go through to have this right? Similar to government grants maybe.

What annoys me most about many of the opinions expressed in this discussion is that people think it's okay to punish the honest employers, and the people those honest employers would like to employ, for the actions of the dishonest employers.

At the end of the internship, the intern has gained nothing. They have provided a service to company Y, but received no training, enlightenment or greater understanding of the industry. In fact, based on what they experienced, it is likely the intern would decide to NOT go into the fashion industry because their entire perception of what the job is is now contradictory to what they thought it was before (but the new view is in fact incorrect). The internship had a negative impact on the intern who may have actually enjoyed the industry. Without having paid the intern (class credit, money, real industry experience), all they did was provide a service for the company for free.

(As a side note, I tried to model this close to the blog post, not provide some artificial "it wouldn't happen" type scenario)

> Either way, the intern would have lost that week or two (even if they recognize it was a bunk internship)

. . . and what else would they have done during that time?

Sometimes, one must try two or three things to find one that's worthwhile. Should I then be able to bring suit against a software developer whose software wasted a week of my time before I decided it wasn't doing me any good, before I moved on to something better?

What happened to paying your way through college with paying jobs? Kids need to put their bottom line first, just like employers do.

The unpaid internship thing is often a scam to get people to do just the kind of work you're describing. In companies I've worked for, I've seen it done.

I saw interns manually 'cleaning' data in a way that could be entirely automated. I told my employer at the time that they'd never be able to keep up with new incoming data and it's terrible, pointless work. I also said I could automate it in about 20 hours of work. He said, "we'll put an ad in for more interns."

Young people are naive, it's part of being young. It's unscrupulous to take advantage of that. Cuban could have paid internships paying at minimum wage if he'd like. It would still be far less expensive than getting actual professionals to do that work. His real complaint should be that he can't extract any real value for that work from the marketplace, because that's where his real problem is.

If so . . . where's the problem? Is it that people just assumed they'd get more than they were promised?

The government can't figure it out. Can the interns? If there's a huge population that's willing to work for free, and they're all undervalued, then a company that hires interns for minimum wage will be able to get all the good ones.