Obama Admin: Why We Shouldn't Regulate Internships

BlogHer Original Post
People in front of building

Imagine that you're graduating from college soon. With unemployment at 10 percent, do you have a chance of getting a job when competing with experienced workers? What are your options?

For many recent college graduates, they take internships. It's not ideal, but it often gives new workers experience and puts their foot in the door when openings do come up.

That option may not exist much longer.

According to the New York Times, labor commissioners in Oregon, Washington, New York and the U.S. Department of Labor are investigating if internships are legal:

Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.

Step back and think about this for the moment. Unemployment is highest among teenagers and recent college graduates. Often, the only opportunity to get professional experience is to take an unpaid internship. In addition to requiring young people to buy insurance, raising our taxes and taking away freedom in purchasing student loans, the government is going to destroy the internship market? This will be an additional burden from an administration with policies that attack the futures of its most ardent supporters.

What's wrong with internships? Well, according to the Labor Department, they violate minimum wage laws. That means the college grad who brings you coffee and makes copies should be paid $7.25 per hour. Per the Labor Department:

The Labor Department says it is cracking down on firms that fail to pay interns properly and expanding efforts to educate companies, colleges and students on the law regarding internships.

“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,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.

This is going to to have widespread and adverse effects on college students and recent graduates. The vast majority of career fields that employ liberal arts majors have unpaid interns. It's part of life. If you want a career, you do what it takes to succeed. I guess that's not good enough for the Obama Administration.

The kicker: this only affects for-profit businesses. That's right. The ones that make those icky profits. Notice that government and nonprofits are exempt from these standards.

Regulating internships is another attack on the free market. If it were in the best interest of businesses, they would pay interns. Paid internships always attract the best talent and are the most competitive. Hiring interns also allows companies to see if a prospective employee is a good fit. The Obama Administration just found one more back-door way to keep the private sector regulated and force more people to go into bureaucratic fields or nonprofits. Since the government will soon be the only employer, how do you think they'll keep up with payroll? Higher taxes of course!

Companies are already burdened with additional taxes and mandates from health care and soon (heaven forbid) Cap and Trade. Now, the government is going to eliminate another pool of inexpensive labor that helps both parties. Internships give new workers critical skills and often help get the grunt work done. If the government forces companies to pay these unskilled workers, they'll just pull the programs completely. That leaves only government or nonprofit internships available to students. Since more and more Americans are earning college degrees, internships are the only way to separate yourself from the competition. The Labor Department is creating a vicious Catch-22 with this policy.

The administration has already clearly stated that they want young Americans to leave for-profit sectors and work in government or philanthropy fields. Look at Mrs. O's comments to a group of AmeriCorps (federally paid volunteers) last year:

What placed them in this position, Mrs. Obama said, was their decision to "move out of the money-making industry"--both had worked in corporate law--"into the helping industry." Again, the term "helping" is loosely defined: After leaving their law firms, he went to work for the Illinois state senate, she to Chicago city government and then a nonprofit hospital. "We left corporate America, which is a lot of what we're asking young people to do," she said.

Ugh. Those dreadful profits. Those things that actually fund* the philanthropy industry and make jobs in the "helping industry" possible. Good heavens! Whatever would possess a college grad to have aspirations of working for the private sector?

It's perfectly fine to want to work in nonprofits. I did for the first six years of my career and three out of the four internships I had in college. However, I chose to work under those conditions (and conditions are generally sketch. Burnout rates are far higher at nonprofits than for-profit entities). The Obama Administration is destroying all choices that college graduates have. They just eliminated all choice in where they go to fund their college tuition and health insurance. Soon, they won't have many choices in where they go to get a job. *In his controversial book, Who Really Cares?, Arthur Brooks found that for every dollar of government aid given to philanthropy, private sector dollars drop by .50. Having worked in nonprofit fundraising, I can tell you that his statistics are accurate.

Update: Independent Women's Forum also picked up this syndicated story.

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