The minimum wage isn't bad because it hurts employers. It's bad because it hurts those who want to be their employees. Imagine you're either a recent college graduate or soon to be a college graduate. You're armed with a degree in English, History, Business, Electrical Engineering, or, well, it almost doesn't matter. You're armed with a degree. But so are hundreds of thousands of other recent graduates from across the country.
You can submit a resume to every employer who's looking for help. In fact, you have. But, then again, so have hundreds of other people. Some companies receive hundreds or even thousands of resumes for just one open position. How in the world are you ever supposed to rise to the top of the pile?
You think, despairingly: "If only they knew what a great worker I was. Once they see the work I can do, I know they'll hire me." Then you get a bright idea. You'll volunteer to work for free for a week or a month. You'll let them see the work you can do. Hopefully they will decide to hire you afterwards. And, if they don't, at least you'll have done something better than just sit around waiting.
Not so fast. Your bright idea is illegal. After all, we have a minimum wage in this country. You aren't allowed to work for anything less than $7.25 an hour. And free is most definitely less than $7.25 an hour.
"If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law," the Labor Department's Nancy J. Leppink tells the New York Times.
The Times also quotes Trudy Steinfeld, director of New York University's Office of Career Services, regarding opportunities for unpaid internships. "A few famous banks have called and said, 'We'd like to do this,' said Ms. Steinfeld. "I said, 'No way. You will not list on this campus.'"
John Stossel relates his experience with hiring unpaid interns.
When I asked WCBS to hire me a researcher, my bosses looked at me as if I'd asked for the moon. Since they wouldn't pay, I started calling colleges to ask if they had students who wanted internships. Many did. From then on, I got much of my best help from unpaid college students.
Many later moved on to paying jobs at the networks, and many became network TV producers…
At first I felt guilty asking students to work for no pay. But I stopped feeling bad about it after most told me they'd learned more in our newsroom than they'd learned on their campuses. Their schools charge them money, while I taught them for free.
And, he discovered, if you did want to work for free, you couldn't do anything that actually helped your possible future employer. So, a practical demonstration of the value you can add to a business is right out.
[T]he six federal legal criteria that must be satisfied for internships to be unpaid. 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 -- in other words, it's largely a benevolent contribution to the intern.
Perhaps, in the eyes of the Labor Department, it should be a benevolent contribution to the intern, from the business. But what if the intern genuinely wants to help, in exchange for the possibility of a job? What if the intern wants to create a great resume that can be used to stand out from the pack when applying for the next job? Doesn't the intern have any choice about how and when he can sell his labor? And for what price?
As I see it, the minimum wage is hurting those who want to work hard, who want to stand out. The minimum wage isn't bad because it hurts employers. It's bad because it hurts those who want to be their employees.