I work in a large classical music nonprofit org in a large city, in the finance department. And I have an MBA that included a very strong grounding in economic theory, from a school that demands rigorous empirical testing of theory (despite a reputation to the contrary). At my arts org, we have lots of unpaid interns, and the current situation is that it is nearly impossible to get a programming or artistic job, even entry level, without starting as an unpaid intern. We could probably afford to pay a couple interns, but not as many as we have (I’m the budget guy, I know this).

The person who might benefit from this legislation would be a person like I was when I graduated from college. Someone with pre-existing clerical skills, a degree in theater, therefore knowledge of the art, and heaping mounds of student loan debt. I was situationally poor then, and ended up going into temp office work that bored me to tears, which led to an accounting job and eventually an MBA and back into arts administration in the finance side rather than the creative side. So I’m not exactly fulfilled, and would have appreciated a minimum wage internship in the artistic or dramaturgy department of a theater, but I will survive. And I was forced to develop other skills that are potentially more lucrative than my current job.

The person who would not as likely be helped is the person who is systemically poor. Somebody who is poor because of urban blight, rural blight, or racism and had little chance to go to college (or at least a good one). No music education, therefore no internship at my organization (paid or unpaid). Going farther back, the person who is systemically poor had very few opportunities to study music intensely as a child, and it probably won’t be a surprise when I say that most of our administrators did. If you never studied music as a child, you certainly didn’t major in music if you got to college.

So, who is the legislation supposed to help? I hope it would be intended to help the systemically poor person. But the thing is, it can’t. If you want to increase access for the systemically poor, then you have to work on systemic issues. You have to help improve their arts education, their parents’ involvement, their access to top college programs… This minimum wage floor isn’t going to help. It’s too little, too late. Maybe a few extraordinary people from such a background would be helped, but you can’t set policy for the extraordinary. And if the legislature is actually designed to help people like me who left college with too much debt to pursue the unpaid internship… well, I guess I could have said thank you. But in the end, there is probably more utility to society in my learning other skills.

There is one possibility, hinted at in one of Mr. Moss’ comments, that organizations would see paid internships as an opportunity to fill their diversity hiring goals. That could be. And you only have to be a tiny bit cynical to perceive that if you use your lowest paid, least responsible positions as a relief valve for institutional diversity goals, you are actually doing a great disservice to yourself, your diversity goals, and the people you bring in as your token diverse individuals. Assuming race is one diversity vector here, this actually would reinforce institutional inferiority of people of color. There’s a negative externality for you.

Thanks for your comments and I have included citations in the original post.

While time does not permit me to attend to the bulk of your reply, I will answer the one question you indicated was a stumbling block for you, “The “well-documented economic literature” on price floors that you mention, is it based on empirical observation or primarily on theory?”

I assumed readers familiar with economics would know I was providing the textbook definition and effects of price floors. By invoking ceteris paribus (all other things held constant), I also thought it would be clear I meant theoretical effects of price floors in a static world. Hope that answers your question.

“you say the demand for labor in the arts is less elastic”

Meant to write “more elastic.”

Also, “you’re saying that because poor interns are more likely to win unpaid internships which they couldn’t afford to accept anyway,” obviously should read “poor individuals” instead of “poor interns.”

It should be no surprise to you that I disagree with your conclusions. Before I present my case, though, I want to ask you a question. The “well-documented economic literature” on price floors that you mention, is it based on empirical observation or primarily on theory? It’s hard to know since you don’t cite your sources, but the sense that I get from your writing is that the one instance of empirical analysis that you refer to, the study(ies?) on the fast food industry, actually undercuts one of the central pillars of your thesis (i.e., that firms will higher significantly less if the minimum wage rises). We can all play the theory game – you say the demand for labor in the arts is less elastic (because…?), I say arts organizations, being nonprofits, are likely to be more sensitive to the spirit, not just the letter, of the law than fast food giants and will therefore hire back at higher rates. Neither of our opinions means a hill of beans until someone goes out and tests it.

You say that even if large organizations hire most of their previously unpaid interns, smaller arts organizations will hire at lower rates. Your logic here is fair enough, but I would daresay that an organization that honestly cannot afford to pay an intern minimum wage is most likely an organization incapable of providing a valuable internship experience from a career-building standpoint, especially after taking into account the opportunity cost of the intern’s time. Training, oversight, and professional development require capacity, and if an organization can’t even afford a few hundred bucks a month for the actual work it’s probably going to be too overstressed and understaffed to provide these resources anyway. (Of course, someone may still find the work of intrinsic value, in which case a volunteer relationship would be entirely appropriate.)

So I don’t disagree with you that a minimum wage will result in fewer internships, though I continue to hold that the impact will be much less than you expect it will be. However, the internships that remain will be higher-value on average for the interns, both because they will all be paid and also because they will be at organizations that have the capacity to use intern labor effectively.

(You might rightly point out that this system punishes smaller organizations that could really use an extra set of hands. I’d agree both that that will happen and that that is a bad thing. However, I am not as concerned with this as I believe there are other ways to address the imbalance, such as through more equitable distribution of grant funds.)

You additionally claim that the legislation would actually make things worse for the poor because of the increased competition. Here your argument defies credulity. Your entire analysis rests upon the flawed assumption that organizations hire interns based on experience. But see, the whole point of internships is to get experience; many employers will even go so far as to avoid candidates they see as “overqualified” because they are afraid the candidate will leave for a better opportunity earlier than scheduled. Absent work experience, then, the hiring decision is based primarily on ability – and as I discussed in the previous thread, ability is distributed across all classes. (Even if firms did hire on experience, though, your argument still doesn’t make sense – you’re saying that because poor interns are more likely to win unpaid internships which they couldn’t afford to accept anyway, they’re better off now than they would be if they had a nonzero chance at some paid internships that were not previously available? Huh? The point was that poor people are less likely even to apply for unpaid internships — putting those 20-40 hours a week to other, income-earning use is a better option for them.)

Anyway, if the legislation were enacted, talented but poor aspiring arts administrators and others will choose to pursue internships that they otherwise could not have afforded. The organizations hiring will have a stronger pool of candidates to choose from, simply by virtue of the fact that it is larger. Some of those hired may be upper class, some of those may be poorer, but the choice will not be predetermined by class, which as I read it is the goal of the legislation. (This is without even mentioning that many organizations have diversity directives to hire individuals from socioeconomically disadvantaged backgrounds, a directive honored much more easily if the internship is paid.) At any rate, the poor will not be excluded from the opportunity as they effectively are now. The only poor individuals who may be made worse off by this change are those at the fringe: low-ability individuals who would be left out because of the marginally fewer internships available. So in that sense, yes, some poor people will be worse off—but their being made worse off is incidental to their socioeconomic class, not because of it as you claim.

Finally, you’ve overlooked one of the key benefits of the legislation, which is the benefit to the hiring organizations. By accessing a larger pool of talent driven by higher demand, including a previously unavailable well of poorer individuals who would not otherwise have been on the market, the interns they hire will be of higher quality.

In sum, though I agree the legislation would not be an unmitigated boon to everyone, I do think that it would increase opportunity for the poor without presenting an untenable burden for the large majority of current employers.