Government Regulators Don't Like Internships

Posted: Apr 05, 2010 11:24 AM
Apparently, government officials have decided that unpaid internships may violate minimum wage laws, they're getting excited about cracking down. Several businesses have been fined for their use of "unpaid labor."

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.

While a crackdown on unpaid internships may result in some of those unpaid internships being switched to low-paid internships, it's easy to project what will happen: net loss of internships, net loss of productivity, net loss of experience for eager young workers willing to get some entry-level exposure in their field of choice.

Hat tip: my favorite economist.

Update: For those of you who would be curious, the government is exempt from these regulations. They'd get to continue reaping the rewards of unpaid labor.

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