As pointed out in the comments on your last article:
Unpaid internships are illegal.
Unpaid internships are illegal.
That being said, if we (and other startups) don't want to hire you because you are inexperienced, offering to work unpaid may make it easier to get some experience. If, for some crazy reason, you really want to work for a startup, you should do what it takes to break into that community.
That's what I did in college, and for a year after college. No way I would have been able to found WePay without those experiences.
However, you're still advising people to break the law on your blog. Its a weird, perhaps antiquated, and largely unknown law - but it was pointed out to you on HN last week and you're clearly aware of it. Thus, IMHO, its irresponsible of you to continue to encourage unpaid internships on your blog.
Surely you can see how this could cause problems for someone else who has the bad fortune of taking your advice at face value.
Cut to John Doe. John is the son of Mr Doe, who owns a law firm. He spends time off working at his dad's law firm, because he intends to become a lawyer. John is not paid.
If I am told to cease and decease by a lawyer/my school/a policeman - no deal, I'll just stop and say: gee, I was in it because I wanted to learn stuff. Out of my own free will. I can't? No problem - I'll just stop. Ditto for John (though for some reason, I doubt anybody'd actually punish John, or even Mr Doe).
I don't see how I'd get in trouble. His article is directed at the non-technical student, not the employer. (If it was written for an employer/startup founder, then perhaps you're right to suggest that he should disclose that he's giving law-breaking advice. I'd be fully behind you on that one, qeorge, I would.)
But the article's fine as it is. And there's a corollary, of course. Entrepreneurs are relentlessly resourceful. If you're not relentlessly resourceful in figuring out a way to get into a startup for the experience, then you're probably not going to make it anyway.
It's an article that belongs on the founder's personal blog, not the company's blog.
Not the way law works. That someone accepted a position without pay does not preclude you from following the law. In the worst case scenario, the person leaves unhappily and they have a means to make your life miserable.
I suspect that the article above isn't an argument for employers to hire unpaid interns. It's rather an argument for non-technical entrepreneur-to-bes to approach the internship job with an attitude of 'you don't want to hire me? That's fine. I'll stick around and help you out until you do. And if you don't - that's still fine. I'll just learn all I can and then disappear after I'm no longer needed.'
Still a fair trade, IMO.
To understand more clearly, it may be helpful to consider illegal immigration to the United States. The basic problem is that even though US minimum wage is $7.25/hour some people are willing to work for $2/hour. The problem here is clear, even though the workers making $2/hour feel "its a fair trade."
Though less inflammatory, your unpaid internship example is the same. You are flooding the market with artificially cheap labor, making it impossible for others who can't work for free to compete.
Worse, as a business owner, how am I to compete with someone getting free labor while I'm paying my employees like a sucker?
At the end of the day, this "time honored" tradition of unpaid internships is little more than an end-run around minimum wage.
You are assuming that unpaid interns would otherwise take the jobs of paid employees. In this regard, you are categorically wrong. Read my post: we don't want to hire anybody. From the post: It's a position "that doesn't exist." Offering to work unpaid is a hack that get's you in the door.
Absolutely. But it doesn't have to be within your company. Rather, its a tragedy of the commons.
Lets use my migrant farm labor example again. Many farms in southern California will tell you they can't pay minimum wage and stay competitive with the farms who are using illegal labor. That's because the de facto hourly wage for a farm worker is closer to $2/hour than $7/hour, because of lax labor law enforcement.
I don't think its hard to see how the same is true of programming jobs being taken by unpaid interns. How is my group payment service that pays its employees supposed to compete with WePay that uses unpaid labor?
Simple. You'll compete and you'll win (assuming we control the other variables, that is). Why? Well for the simple reason that programming != menial labour. If you pay a premium to have a small group of elite programmers working for you, and WePay has a small group of $0 programmers doing -$10 work - you'll win in the long run.
This discussion is a) not about programmers. And even if it were - b) the argument doesn't apply. You get what you pay for. Nobody is arguing that you should ditch your technical department for a team of unpaid, inexperienced code-monkeys, the same way nobody is arguing that you should ditch your administrative department for a team of unpaid, inexperienced business students.
Startups are too small, and too close to the market to do things like that. They simply won't survive.
I'm not sure it's an especially effective hack. Min. wage is what, less than a tenth what you'd expect to pay a technical person. From experience, training a new guy is going to take more than 1/10th of my time, (and I'm overpaid; Min. wage is closer to 1/20th of my bill rate.)
I know I've turned down offers for free work for this reason, and I'm spending my own money (meaning I'm quite a bit more tight fisted than most startups.)
Although they could also spend most of their time learning and not return even minimum wage value, I guess it's a trade off.
I'm just saying that compared to the value of my time, adding in a minimal paycheque doesn't make the intern significantly more expensive, and it makes me feel a lot better about asking him or her to do stuff.
If an employer isn't willing to pay a token wage, I question how much (expensive) time they will give to that intern in training and mentoring. I mean, just having real problems can be valuable, but you can get that for yourself. Buy a $8/month VPS from me and write something. The advantage you (the intern) are getting out of an internship is the mentoring; working with people who are better and more experienced than you are.
Requiring people to offer working unpaid is a hack, that has been outlawed.
Nobody is requiring people to offer working unpaid
Like I said, these are students looking to fill positions that don't exist. I'm not going to offer you a job, let alone pay you, for something that I don't really want you to do in the first place. Did you read the post? I'm suggesting that if these students really want to work for a startup despite the fact that startups don't want to hire them, then they should basically break down the door and remove any possible objections.
Effectively you are. There are people willing to work for you or another startup and you tell them they can only work for you for free. When you subsequently derive benefit from one of those people, they are effectively competing with payed labor, that would otherwise have been performed in the future, when you would have money available for it. You can twist and bend this all you want, but the outcome is that you are in fact breaking the law when you do such a thing.
What you could use as a defensen is saying: "So what if it is against the law?". Law does not dictate morals. Laws often cover things they shouldn't reasonably be applied to. If you find it morally acceptable and think the net outcome for society is positive, then just do it. Defend it based on the intended outcome, instead of attempting a legal justification.
Remember the context of this discussion. We're talking about non-technical interns - who by definition are less valuable to an early-stage startup. Your argument assumes that your employees are of the same value as your interns. In an early-stage startup, the techs usually run the show. This article began by asking the following: "If you are a non-technical student, and you'd like some experience (i.e.: work) in a startup, what can you do to get in?"
Business owner assumes mature business != early-stage startup founder. The context is different; in most cases the startup isn't even in the market to hire non-technical talent. This robs no-one of a job.
No, we have labor laws to subsidize labor unions by driving up the cost of labor. It's one of the reasons we have rust belts instead of factory belts.
"You are flooding the market with artificially cheap labor, making it impossible for others who can't work for free to compete."
If a person's labor has lower value than free, they have a problem. That problem is not competition.
"Worse, as a business owner, how am I to compete with someone getting free labor while I'm paying my employees like a sucker?"
Logical thinking fail. "Artificially cheap labor", to use your words, drives down your costs for both labor and supplies.
In any event, unpaid internships are consistent with the principle of free association: the participants do not harm each other, and do not coerce anyone else. Restricting unpaid internships is morally equivalent to banning a church that does not charge for admission, on the theory that they unfairly compete with movie theaters.
Technically, you are correct - there is a such thing as a legal unpaid internship, according to some interpretations of the law. This would be when the student gets more out of it than the business.
However, most unpaid internships, such as the one WePay discussed in its last post, are clearly illegal.
So, A) you were technically wrong and B) you are still wrong in practice.
As a decision maker, I need information about threats and opportunities. As a tinkerer, I like knowing minutiae. My response both indicated the functional value of unpaid internships as not a legal threat and provided a link to a reasonable discussion of the technicalities.
Your statement "You should read the article you linked" doesn't add to the conversation, except as an attack at me. Even if you did not intend it as such, in this circumstance you are suggesting that I did not do my homework (when in fact I was helping observers of our interchange by providing sources.) While I thank you for leading me down the path of exploring this legal oddity, I'd rather you left out aspersions.