With Interns, Congress Fails to Practice What It Preaches

Original Article: http://www.ocregister.com/sections/login/

  • Author: Michael Saltsman

  • Publication Date: July 2013

  • Newspaper: Orange County Register

  • Topics: Minimum Wage

This month, federal district judge William Pauley III ruled that Fox Searchlight Pictures was in violation of minimum wage laws by employing unpaid interns on its movie sets. Ironically, some of the minimum wage’s biggest defenders in Congress are this summer staffing their offices with employee interns that don’t receive a cent of compensation or a day of paid time off.

The Fair Minimum Wage Act of 2013, sponsored by Sen. Tom Harkin (D-IA) and Rep. George Miller (D-CA), would raise the federal minimum wage by nearly 40 percent to $10.10 an hour. A similar effort, called the Healthy Families Act, would require employers to provide up to seven paid days off.

Yet of the 183 House and Senate co-sponsors of these two bills, a new Employment Policies Institute report finds that roughly 97 percent fail to pay their employee interns. And of those select few who do—only one pays all interns, while five offer a mix of paid and unpaid positions—none provide paid leave.

A government pay or benefit mandate for all Congressional interns would no doubt prevent these offices from hiring more of them (just as it would at movie studios). But if this logic applies on Capitol Hill and Hollywood Boulevard, it also applies to the private sector. In fact, the businesses most likely to hire minimum wage employees—restaurants, grocery stores, movie theatres, and so on—face an even more difficult trade-off.

These employers keep just a few cents in profit from each sales dollar after paying expenses, and can’t simply absorb the cost of a new pay or benefit mandate. Absent the ability to raise prices, which could drive away customers, these businesses have to provide the same product with less service.

It’s a trend that we’re already experiencing: We pump our own gas at the gas station instead of having someone pump it for us; many grocery stores now have customers bag their own groceries instead of hiring someone to handle it; and full-service restaurants are eliminating bussers by having wait staff clear their own tables.

The end result is fewer opportunities for entry-level jobseekers at a time when 24 percent of them already can’t find work.

Even the staunchest advocates for additional wage mandates understand why this is a problem. Many legislators’ offices praised the “invaluable work experience” that interns receive in lieu of pay. Teens in the private sector receive the same thing, an “invisible curriculum” that comes from learning how to work with customers, report to a supervisor, or show up on time.

There’s monetary value to this education: Research suggests that seniors in high school with a part-time job are earning higher wages 6-9 years after graduation than their jobless counterparts. On the flip side, even a six-month spell of unemployment for a young person can negatively affect future earnings and job prospects—the equivalent of forgoing a quarter-year of school.

Our country’s young people are poorly served by outlawing unpaid internships, and  they’re also harmed by misguided mandates that raise the cost to hire and train them. It’s a pity that hypocritical members of Congress recognize one but not the other.

Michael Saltsman is the research director at the Employment Policies Institute.