05
Apr
10

“Choice for me but not for thee”

I promised some wharrgarbl about minimum wages, so here y’go.

First of all, der Blaustrumpf rants about people ranting about minimum wage:

As a resident of nonprofit capital San Francisco, I’ve had more than one conversation with those who earnestly defend minimum wage laws and assert that they protect rather than harm young people.  […]  Often enough, these individuals were employed at nonprofits which would have promptly gone under had they paid their interns anything resembling a “living wage.”  And usually these individuals got ahead at the organization by completing one of these internships.  It never seemed quite politic to point either of those out, however.  After all, they were working at nonprofits, and minimum wage laws are obviously directed at The Man.  It was regrettable that they had the relative luxury to pursue un- and low-paid internships, while working-class kids did not, but like everything else that could probably be remedied by taxing the wealthy.  Why they could arrogate to themselves the privilege to work for zero dollars in exchange for future job opportunities, while certain other groups of people could not accept anything less than an arbitrarily set wage, was never explained.

(Her blog has recently joined my list on the right-hand column, not to mention my blogfeed.  It’s well worth your while.)

The problem with minimum-wage laws, much like the problem with rent-control laws, is that they increase the cost of hiring new employees into entry-level or low-skilled positions.  Employers respond to this cost increase the way you’d expect: they hire fewer new employees.  This is bad for, well, exactly the people minimum-wage laws were intended to protect.

Basically — and I admit that I might be abusing the term here — this is a transfer from people who would be employed with lower (or nonexistent) minimum wages to those who are fortunate (or skilled) enough to get hired regardless.  That sounds regressive to me, but the people who champion minimum-wage legislation call themselves progressive so I must be wrong.  (After all, Bush 43 called himself a fiscal conservative, and — oh hello Medicare D and TARP, I didn’t see you over there!)

But minimum-wage laws aren’t just a form of taxation on the poor and undeserving: they’re also a restriction on choice.  As Cheryl points out, the folks who could get into non-profit internships (going from my own experience, these folks are well-off and well-educated) have the opportunity to choose between a low-paying internship now to build up credentials for later in life (I think a law student from Chicago had this pay off recently) and a better-paying job now that’d less politically-lucrative credentials down the road.

Now suppose that I want to mop floors and haul trash at a race-prep shop in exchange for welding lessons from the mechanics, damper-tuning secrets from the engineers, and patient heel-and-toe instruction from the drivers.  Nein!  Nein!  VERBOTEN! That race shop is an evil awful profit-monger, and I’m forbidden from trying to follow my motorsports dream by trading free time for a foot in the industry’s door.  I’m not smart enough to know what’s good for me, but oh thank gawd there’s someone in Ottawa looking after my best interests!

Cheryl continues on the subject of unpaid internships:

Of all entities, it’s the federal and state governments who are tuning in to this apparent hypocrisy, and are remedying this grave inequality by–you guessed it!–demanding money for themselves.

[…]

On behalf of the poor students these companies supposedly took advantage of, the government is demanding fines to be paid to itself.  You kind of have to admire that sort of cheek.

The book is only being thrown at for-profit companies for now, but it isn’t hard to imagine that nonprofits might be next.

But… that’s different!

The funny thing is, not every for-profit is being targeted.  Some for-profit cartels that exploit the young and uncredentialed — and brag about it — are doing quite well at the moment.  In fact, one of their biggest commercial events just ended:

Here’s how it works: The NCAA rewards coaches and universities enormously for constructing and maintaining high-profile college athletics programmes, but forbids the players — those young and uncredentialed kids — from receiving a share of the profits.  All well and good, you might say, if it gets the kids into pro sports later on.  (This situation would be analogous to the underpaid interns at not-for-profits.)  But the NCAA has something to say about that:

There are over 400,000 NCAA student athletes. And just about all of us will be going pro in something other than sports.

YA RLY.  Look, I’m a robust advocate of the original doctrine that drove college sports — a healthy mind in a healthy body — and I admire the college athletes that can pull it off.  But the incentives within the system select for people who are essentially pro athletes, but getting paid far below what they’d command in a free market.  Go RTWT.  (Update: Also, read this post by Ilya Somin, which expands upon Henderson’s point.)

But we can’t have college athletes cashing in on valuable sponsorships, now can we?  Dealing with a half-dozen brand agents from high-profile corporations might corrupt the poor little snowflakes — as opposed to dealing with a half-dozen recruiters from high-profile programmes (that’s totally different!).

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