Minimum Wage: Charles Murray Surrenders
By David Henderson
As co-blogger Bryan noted earlier today, Charles Murray advocates requiring that internships pay the at least the minimum wage, currently $7.25 an hour at the federal level. Is this because he, a perceptive and economically literate analyst, does not understand the damage the minimum wage does to young people’s job prospects? Is it because he does not understand that the traditional proponents of the minimum wage, labor unions, want to price out their competition? No and no. It’s because he does understand the damage and he wants the damage. And he wants the labor unions to win. Here he is in his own words:
For one thing, we should get rid of unpaid internships. The children of the new upper class hardly ever get real jobs during summer vacation. Instead, they get internships at places like the Brookings Institution, the American Enterprise Institute (where I work) or a senator’s office.
It amounts to career assistance for rich, smart children. Those from the middle and working class, struggling to pay for college, can’t afford to work for free. Internships pave the way for children to move seamlessly from their privileged upbringings to privileged careers without ever holding a job that is boring or physically demanding.
So let the labor unions win this one: If you are not a religious organization and have more than 10 employees, the minimum wage law should apply to anyone who shows up for work every day.
Although Murray uses the term “privileged” incorrectly, he’s right that unpaid internships are easier for “children” from higher-income families to take because those from lower-income families need to earn some money over the summer. I was one of those people from a middle-income family, which is why I took a job in a nickel mine one summer.
But there’s a simple solution that I have proposed earlier (here and here): allow internships to pay less than the minimum wage. It’s a pretty screwy world in which the government says to an employer:
You can pay the minimum wage or more, or you can pay zero, but don’t let us catch you paying anything below the minimum wage and greater than zero.
But wouldn’t employers have an incentive to label jobs as internships and pay less than the minimum? Yes. And I would hope they would take that opportunity. The minimum wage law doesn’t make only bona fide internships more scarce. It makes more scarce all job opportunities for low-skilled workers who want on the job training.