Regulate Internships, Get Fewer of Them

As if finding the right internship wasn’t hard enough, college students may soon find another obstacle to getting their foot in the door in their prospective occupations: government regulators. A recent report in The New York Times notes the frustration which some regulators are having with companies they believe are using unpaid internships to save money.

The article notes the following:

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.

Regulators argue that they are only protecting the interns from unfair exploitation (read: expanding the nanny state), claiming that some companies use the title “internship” as an excuse to not pay employees. But wouldn’t these misled “interns” and sponsoring schools soon catch on to such a ploy from companies and reject further dealings with those deceptive firms? Or, do the regulators, as is often the case, view these students and schools as incapable of making these types of judgements on their own without the guiding hand of government (read: paternalism)?

Despite the stated goal of helping students, what this all can in practice lead to is fewer internships. Government regulators, by adding to the cost of internships to companies will, in effect, reduce the opportunity students have for getting internships.

With so many employers looking for “experience” and not just education in prospective new-hires, further meddling in the internship market by government will result in less opportunity for students to gain that experience. One likely unintended consequence of hindering the resume-building experience internships (even the unpaid ones) can provide students: more recent college grads either unemployed or floundering in low-paying jobs unrelated to their degrees. Should such an undesirable result occur, it would amount to just one more example of the blowback from government’s persistent desire to “solve” our problems.

* A similar version of the preceding was originally posted on the Young Americans for Liberty blog.

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