Does this mean we should abolish the minimum wage? Well, if there's a good reason why trainees should get either $0.00 or $7.25 but nothing in between, I'd like to hear it. -- Bryan Caplan
I've seen startup software companies try to use unpaid internships to get coding done on the cheap while scoping out potential talent, but that whole scene has always struck me as an accident waiting to happen.
By not paying people you risk creating huge resentment not just from the interns not getting paid but also from the staff whose time gets wasted supervising them. This is a corollary of Fred Brook's famous mythical man month argument.
Nevertheless, unpaid internships are quite the thing in no less of a place than in our nation's capital where not only are such engagements legal, they are often used by the same people push for laws to make some paid positions illegal via so-called minimum wage laws.
So I was quite glad to see Bryan Caplan annihilate the 'happy hypocrisy of unpaid internships' in his Library of Economics and LIberty post this last week:
The real problem with unpaid internships is that we're not hypocritical enough. Regulators look the other way when businesses train college students for college-type jobs in exchange for their labor. But the rest of the labor market is out of luck. If McDonald's set up unpaid internships for high school dropouts, regulators would come down on it like a ton of bricks. As a result, the only people who can get on-the-job training are those who need it the least. Instead of banning unpaid internships, we should make them available to everyone.