Thursday, April 17, 2014

Are Unpaid Interns Being Exploited?


Are unpaid internships going to become a thing of the past?  If the U.S. Department of Labor has its way, then that may be the case.

The Department of Labor recently filed a brief in support of a lawsuit by eight former interns who are claiming they are owed back wages, even though they signed on as unpaid interns when hired.

There are some bizarre rules when it comes to hiring unpaid interns.  While there is a six-part test available for the Labor Department to determine if a business can legally have unpaid internships, the courts more typically consider whether the company or the unpaid intern derives the greatest benefit.

In other words, it is all very subjective and a company really has no way of knowing whether they will win or lose in court if a lawsuit is filed against it.

In its brief, the Labor Department is saying that free labor is “both tempting and available” due to the weak economy.  But perhaps it is the unpaid interns seeking out such an arrangement in order to gain experience in order to later get a job.  Sometimes internships can lead to a job with the company providing the internship if management is happy with the work being done.

While the plaintiffs in the case are claiming they were made to work full-time while not being paid, we must be careful with the language being used.  Nobody was forced to do anything.  If the interns were not happy with the arrangement and did not like the working conditions, they were free to leave at any time.

When a company hires an intern to do work, with or without pay, it is an agreement being made between consenting parties.  Both parties deem themselves better off.  The company gets cheap labor, many times free, along with the potential of finding a good future employee.  The intern gets experience, along with a trial run at the type of work being done.  Some interns may decide whether or not that type of job is right for them.  In addition, the intern has the potential of being hired on for a full-time paid position by the employer.

In our world of high unemployment today (mostly caused by government), more people are likely seeking internships, even if unpaid, in order to find work, either through more experience or through the employer providing the internship.  If someone doesn’t have enough money to put food on the table, they probably aren’t going to accept an unpaid position as their primary employment.  Unpaid internships are sought by rational people who can look beyond today for a better tomorrow.

The Minimum Wage

I find it ironic that there are minimum wage laws, yet there also exists unpaid internships.  I have pointed out this inconsistency before.

You can hire an intern and pay that person nothing, yet it would be illegal for you to pay that same person doing that same job five dollars per hour.  This is our system of government.

So in the Labor Department’s attempt to crack down on unpaid internships, I suppose it is being more consistent.  We all know that the Labor Department would not start advocating a repeal of minimum wage laws, so cracking down on unpaid internships is the only way to gain some consistency.

Of course, as long as there are minimum wage laws, I would prefer the inconsistency of having unpaid internships, because at least it gives something of an opportunity for those seeking skills and experience in the workplace.

If the Department of Labor continues to pursue going after companies with unpaid internships, and if the courts start siding with the interns seeking back pay, then I fear what the consequences will be.

Just like most government laws and programs, the results will hurt the innocent who are honest and hardworking.  It will end up producing the opposite results of the stated intentions.  Just as minimum wage laws end up hurting unskilled workers the most, the disappearance of unpaid internships would hurt young people seeking experience the most.  These are the people struggling to find full-time employment because they don’t have the experience that many employers are looking for.

In addition, hiring interns is a great way for companies to test potential employees.  Many companies don’t want to hire employees without knowing their work habits because it is difficult to fire someone due to fears of a lawsuit.  Some companies will hire contractors through a temp agency to test people.  In the case of young, unskilled workers, it may not be worth it to pay someone even the minimum wage, as their initial productivity will be very low.  Being able to hire unpaid interns really is a win-win situation in most cases.

This is another case of the government getting involved where it shouldn’t.  It is interfering with voluntary agreements that will only result in more unemployment and more frustration for those seeking experience.

If someone doesn’t like the fact that an internship is unpaid, then nobody is forcing them to take it.

Tuesday, April 15, 2014

Do Employers Discriminate Against Women?


Obama is signing more executive orders without going through Congress.  This time it relates to ensuring equal pay between different races and different genders.

One executive order will require that federal government contractors publish wage data by gender and race to supposedly ensure that they are complying with equal-pay laws.

There is no word yet if Obama will issue a similar executive order to prevent unequal pay between various religious groups, political parties, and age groups.  And what about making sure that wages are equal between tall people and short people?  And let’s not forget about comparing wages between overweight people and skinny people.

Of course, I am being sarcastic with identifying all of these other groups.  Not only is the government involvement here morally wrong, it is ridiculous to think that the government could solve a problem of unequal pay if such a problem even existed.

It is actually the free market that brings us closer to paying people what they are worth in terms of production.  It is not to say that the free market is perfect and that everything is always in equilibrium.  It is just that the free market is the best mechanism for getting closer to equilibrium.  In this case, that equilibrium is measured in earnings for what people produce.

Most employers are not going to arbitrarily discriminate strictly based on gender or race because they would just be hurting their own bottom line.  Most employers care about their profitability more than any personal biases.  They are going to pay the most to the workers who they perceive as the most productive and for those they want to keep.

In a free market, if an employer is paying a male worker more than a female worker and they are truly equal in their production, reliability, etc., then this just presents an opportunity for other employers to pay the female worker more and hire her away from her present employer.  She may or may not make exactly the same as the male worker, but the free market will generally work towards this effect.

The problem here is that nobody is equal.  There are differences between men and women.  The obvious thing is that women have babies and are more likely to take a leave of absence from work, or even quit work.  This is a major cost to an employer and the employer may consider this when hiring and determining a wage.

But there are many other differences between men and women.  This is all generally speaking of course, as all individuals are unique.  Men are more likely to take jobs that require travel and that require longer hours.  Men are more likely to do jobs that are more dangerous.  Men are more likely to take on sales jobs.

There is also a genetic difference that determines what the genders choose.  Men are more likely to get into higher paying professions such as engineering or law.  Men are more likely to be doctors, while women are more likely to be nurses.  Again, this is very generalized, but it is just a fact of human nature.

Does anyone really think using the force of government is going to correct any unfairness?  Maybe some of it is unfair, particularly to a woman who doesn’t plan to have any kids.  But we have to acknowledge that the free market is more likely going to correct this situation over the government.

This will probably be like most other government laws and programs.  It will end up resulting in the exact opposite of the stated intentions of the law (or executive order).

Just as age discrimination laws end up making it harder for older people to find a job, this Obama dictate will end up making it harder for women to find a job, or perhaps making them truly underpaid.

I can envision employers trying to avoid being accused of gender discrimination, so they may hire a woman and classify her job differently than a man, even though they are doing similar work.  So if the woman’s salary is lower, he won’t get in trouble because her job classification is different.

We can’t be certain of all of the negative consequences, but you can be sure there will be some.

It is ironic that gay women earn more than heterosexual women.  Is Obama going to do something to “correct” this situation?  This statistic actually makes perfect sense in that many gay women are more likely to be career oriented and less likely to be tied down by children.  And the semi-free market has accounted for this difference as reflected in the statistics.

This whole topic of equal pay is just more politically correct garbage coming from Obama and other political hacks.  They are trying to stir up emotion and set up conflict between men and women, employees and employers, and left and right.

Meanwhile, pay no attention to the federal government spending almost $4 trillion per year.  If you want to talk about a wage gap, let’s look at the politicians and lobbyists in Washington DC in comparison to the average citizen whose money they suck away.

Sunday, April 13, 2014

Raw Milk or Raw Deal?


There was legislation recently introduced in Congress to lift a ban on raw milk in being traded through interstate commerce.  The story of raw milk is really one that epitomizes what has happened to our country.

First, you will notice that legislation is being introduced.  Why isn’t there legislation to repeal?  Normally I would be critical of legislation that seeks to add a law instead of repealing, but in this case, there isn’t really a law to repeal, except perhaps removing all funding from the FDA.

There is no federal legislation banning raw milk, but the Food and Drug Administration took it upon itself to prosecute farmers for selling their milk raw, as opposed to pasteurized milk.

This is one of the major problems that we face from Washington DC.  Most of the rules and regulations that exist are not passed directly by your so-called representatives.  Instead, Congress delegates authority to these bureaucratic agencies to make up their own rules.  Even Obamacare did this in delegating broad powers to the Department of Health and Human Services.

A second interesting thing about raw milk is that there are varying laws in the 50 different states, most of which are bad for liberty.  But it is usually better to have a bad local law than any federal law.  At least laws made at the state and local level are a little easier to change and at least there remains some options for those living there.

In the example of raw milk, the bad regulations from the FDA just exacerbate the problems created by the states.  If all federal rules and regulations are repealed, then at least consumers would have some choices, even faced with strict state laws.

A third thing to note about the quasi ban on raw milk is that it is just another example of protectionism.  It is done in the name of consumer safety, while it is really being done for the lobbyists and the big companies and the rich farmers.  It is usually the local family farm that will sell raw milk and get harmed by such legislation.

Once again, the rich get richer, but this isn’t a case of getting richer by meeting consumer demand.  It is getting richer by using the force of government to outlaw competition.

The last important point regarding raw milk is how it seems that the government actually wants people to be unhealthy.  This may sound cynical, but it seems that government will often promote things that aren’t healthy and run campaigns against things that actually are.  Aside from a few obvious things like not smoking and avoiding processed foods, the government will actually give advice that is the opposite of what you should be doing.

There is much debate about raw milk, but it tends to be politicians and industry protectionists who promote the supposed dangers of raw milk.  If you ask the average guy on the street, he probably won’t know much about raw milk.

But there is another side to the story.  While the anti-raw milk people claim that pasteurization is needed to kill the bacteria, it is the bacteria that some health advocates seek.

There are good bacteria and bad bacteria and human beings need lots of good bacteria in their gut.  Raw milk is a source of this, along with other nutrients.  It is the same reason that it is beneficial for babies to breastfeed.

While the anti-raw milk crowd can point to limited cases where people got sick from drinking mishandled raw milk, you can point this out in any industry.  There are people who get sick from eating bad meat all the time.  It doesn’t mean we ban the sale of meat.

Even if you disagree on the potential health benefits of raw milk, this is an issue of liberty.  If some people want to voluntarily make the choice of drinking raw milk, you should not use the force of government to prevent them from doing so.

We all have choices in life to make and they usually involve some level of risk and benefit.  We should not need permission from the government.

Free raw milk!

Tuesday, April 8, 2014

Is This Capitalism or Cronyism?


While the federal government usually gets most of the attention when it comes to lobbying and doling out favors to big corporations, it happens just as much with state and local governments.

It was recently reported that Motorola controls about 80% of the emergency telecommunications in the U.S.  There are cities and states across the country handing out noncompetitive contracts to the company.

Of course, it is not surprising that Motorola spends millions of dollars on lobbying, along with donations to various groups associated with police and firefighters, as well as, of course, politicians.

The so-called left in this country likes to rail against big business.  Think about the Occupy Wall Street group.  In some ways, they have a point.  But they are trying to blame capitalism when what we have isn’t capitalism.  It is cronyism.  In some ways, it is the economic system of fascism.  It is an alliance between big government and big business.

In a capitalist society, the government wouldn’t be doling out favors to big business.  In a true capitalist system, the government would be there to protect people and their property from encroachment and to enforce contracts.  In our current world, the government instead takes people’s property and hands it out to those with political connections, while throwing a few scraps back at the lower and middle classes.

It is ironic that some people justify government regulations and interference in the marketplace because they say that we need protection from big business.  But consumers can protect themselves from big business by refusing to buy their products in a free market, if they don’t like the products or they are too expensive.

Instead, government interference gives us what we have today.  It ensures the success of big business by forcing us to buy things (via taxation) that we wouldn’t otherwise purchase.  Government interference also tends to set up rules and regulations that make it impossible for the little guy to compete.

We also hear about the threat of monopolies if the government didn’t step in and regulate and control the business environment.  Yet, it is the government that is creating the monopolies where we have no choice in the matter.  As mentioned, Motorola has 80% of the market in this one category because of government contracts at various levels.

A company that obtains an 80% market share in a truly free market would really have to deliver a superior product at a superior price.  Even giant companies such as Walmart cannot control 80% of the market.  There is almost always competition.  And if Walmart did achieve this without government help, then it would be a result of delivering consumers what they want at low prices.

Motorola is just one example of a big company that relies on government for its business instead of relying strictly on its innovation and quality.  I guess you could say that they rely on their marketing, but it is marketing by lining the pockets of politicians to use your tax money to buy its products.  In this case, the company is not profitable because of consumers voluntarily purchasing its products.

Monday, April 7, 2014

Secession is in the Air


With Crimea breaking away from Ukraine and joining Russia, the topic of secession is becoming more popular, with strong opinions both for and against.

The situation in Crimea is a little different because the people of the region were actually voting to join another country instead of breaking away on its own.  This may seem odd to us, especially when it is Russia they are joining, but we do have to consider the circumstances.

That region is made up of people who consider themselves Russian.  They speak the language and probably share more of the views of the Russian people.  We must also consider that life in Ukraine is what we would consider horrific.  When people in Crimea see higher living standards in Russia, it is natural for them to want change and to want to share in those higher living standards.

Some critics say that the election was not valid because there was pressure on the people to vote to breakaway and join Russia.  This may or may not be true, but it is hard to deny that a large majority of the people there favor a reunion with Russia.

Regardless of the situation in Crimea, how should a strong advocate of liberty deal with the topic of secession?

Unfortunately, the topic of secession in the U.S. tends to get associated with the Civil War, which wasn’t really a civil war.  Because the southern states allowed slavery and slavery ended up being abolished at the end of the war, the idea of secession is sometimes tied to slavery.  The critics of secession have exploited this association by screaming racism anytime someone mentions the word secession.

Of course, this is ridiculous and it should not dissuade us from speaking about the topic.  Just because the southern states had slavery and they also tried to secede, it doesn’t automatically make secession bad.

If there is a mass murderer who also enjoys eating pie, does that prevent us from ever enjoying pie again?  Does anyone who eats pie automatically get labeled a sympathizer of mass murder?  This just shows the ridiculous notion of how anyone advocating secession is advocating slavery or racism.  It is just a smear tactic of the critics.

It is also important to point out that anyone who is against secession must also be against the United States.  The Revolutionary War was a war of secession.  The American colonies were seceding from Britain.  The Declaration of Independence is just that.  It is a declaration of secession.

Some will say there is a difference because Britain was ruled by a king, whereas we live in a democracy today (although it is supposed to be a constitutional republic).  But then how can an advocate of democracy deny the right of a group of people to secede if that is what the majority favors?

As a libertarian, I will always recognize that secession should be allowed and it is usually good for liberty.  Generally speaking, the smaller the region, the better it is for liberty.  It is actually smaller countries such as Switzerland and Hong Kong that tend to have more liberty.

It is also important that when there are smaller countries, there are more choices and there is more competition.  This can actually constrain governments to a certain degree.  While the U.S. has become quite centralized, you can still see a little bit of competition between state governments.  High tax states such as Illinois and California are finding that if they make things bad enough, some people will actually pick up and move somewhere else such as Texas or New Hampshire where taxes are less burdensome.

With that said, liberty advocates should remain consistent and still not oppose secession if it is coming from an area that does not reflect their views.  For example, there are some leftists in Vermont who would like to secede from the U.S.  While I don’t share their vision on some things, particularly on economic issues, I will not oppose any attempts of secession there.  If they want to breakaway and have their own little democratic welfare state, then it is better for it to happen in a small region where people can easily move away.

I don’t see secession happening any time soon in the U.S.  There are cultural and economic reasons for this.  But I think we should not be afraid to discuss the topic.  Smaller regions controlled by a government tend to favor liberty in the long run.

Monday, March 31, 2014

The Government That We Pay For


Many people think that we don’t get the government that we pay for.  This is probably true in most cases, but it could be far worse.  We could actually get all of the government that we are forced to pay for.

There was a recent story out of Rockford, Illinois in which the city government ordered a church to stop providing help for the homeless.  The church was allowing homeless people to take shelter from the bitter cold outside.

The caring city government shut this down due to zoning issues and for violating the fire safety code.

So the city government, in all of its wisdom, wanted to keep people safe from a potential hazardous situation.  The caring bureaucrats did not want a fire safety hazard.  Even if the odds of having a fire are less than 1%, we can’t be too cautious.

Therefore, to make sure nobody gets hurt, the city government thought it would be better to throw the homeless people back out on to the street in freezing temperatures.  Remember, safety first.

While this is a more blatant example of government incompetence, or perhaps government cruelty, this isn’t exactly an isolated incident either.

When thousands of new laws and regulations are passed every year – at the federal, state, and local levels – it is inevitable that some of them are going to have really bad consequences.  Unfortunately, it is not usually the bureaucrats who implement and enforce the laws who suffer the bad consequences.

It is also inevitable that some bureaucrat is going to interpret some statute in a way that it was never intended.  It is inevitable that someone is going to enforce a statute that is against all common sense and human decency.

In this sense, I am really glad that we don’t get all of the government that we are forced to pay for.  Imagine if all laws and regulations were enforced like this one.  It probably wouldn’t be an exaggeration to say that we would live in an almost completely totalitarian society.

There are many people who will complain about government, but say that government needs to be more efficient.  When Mitt Romney was campaigning for the presidency, he said he wanted to run the government more like a business.

But we should be careful in what we ask for.  Do we really want the government running more efficiently?  Can the government really operate like a business?  Businesses usually get money by pleasing customers, not by forcing people to pay for something that they don’t want.

I understand the sentiment in wanting government efficiency.  People don’t want their tax money wasted.  But you can’t expect it to be put to good use very often when you are forced to pay taxes, especially in large amounts.

Do you want a more efficient NSA that can track everything Americans say and do?

Do you want a more efficient IRS in making sure that everyone is audited?

Do you want a more efficient education system where children are only taught the materials deemed proper by the state?

Do you want more efficient city governments like that in Rockford, Illinois that makes sure no one is in violation of zoning laws and fire safety standards?

Government efficiency should not be a goal for liberty lovers.  Reducing government power should be a goal.

Saturday, March 29, 2014

The Obamacare Fun Continues


While Obamacare is causing great harm to most Americans, I still find it entertaining to a degree.  This is a classic government program in that it is doing the exact opposite of its stated intent – in this case, providing affordable health insurance.  It differs from most other government programs in that people are experiencing the pain right away and know where to place the blame.

Some health industry officials are now saying that the premiums related to Obamacare could double in some parts of the country.  The Affordable Care Act should have been called the Unaffordable Care Act.

While the dysfunctional website was getting all of the attention back in October and November, it was inevitable that bigger problems lay ahead.  Then millions of people were receiving cancellation notices from the insurance companies, completely contradicting Obama’s original claims that if you like your current plan, you can keep it.

The next major problem, and probably the biggest problem, is the massive premium increases.  This includes health insurance premiums for people who already have plans through their employer.  It isn’t just people signing up for Obamacare.

But this problem is a lot different.  It isn’t like the website that was fixable.  This problem isn’t going to go away.  People will either have to forego having health insurance or else they will see the huge premium expense each month.  In addition, for those signing up for high-deductible plans, they will also get sticker shock the first time they have some kind of a medical emergency.

To top this off, Obama said in an interview that the American people just need to prioritize when it comes to things like having a cell phone.  Aside from the fact that a monthly cell phone payment is not going to cover the cost of health insurance for most people, this statement is quite amusing from someone taking million dollar vacations on the taxpayer dime.

This is going to spell major trouble for the Democrats in the mid-term elections this November.  This is one of those rare pieces of legislation that split almost unanimously along party lines.

Generally speaking, I think most Republicans are more free market oriented than Democrats.  But this doesn’t always translate into good Republican politicians, even on domestic economic issues.  There are some who probably go to Washington DC with good intentions, but those good intentions are quickly destroyed by the lust of power.

But in the case of Obamacare, it worked out for Republicans in their opposition.  Most Republicans in DC don’t really favor the free market to a strong degree and this includes the area of medical care and insurance.  But while they don’t offer much in the way of alternatives, it is universal opposition to Obamacare by the Republicans at this point.

Politicians will say that they don’t want to run a negative campaign and that they want to present their own positive agenda.  But the reality is that negative campaigns can win elections, particularly if you strike at a fear or a hot spot of voters.  It will be easy for Republicans to campaign against Obamacare and you will be surprised how many people respond.

It is not that most voters like the Republican candidates, but some voters will be absolutely furious at the Democrats for passing Obamacare.

While the large premiums (and continuing to rise) will be really harmful to the average American, it will be the gift that keeps on giving, politically speaking, at least for the Republicans.

People get mad about a lot of things politically, but they also have short memories.  By the time the election comes around, most of it is forgotten.  But the American people will be continually reminded every month of how much a disaster Obamacare is when they have to pay for it.

The whole healthcare and insurance system was a disaster when Obama entered office.  But Obamacare has made it far worse and that is what people will blame, with the exception of a few loyal Democrats.

There will be a push for a full government takeover of the medical industry.  It may or may not work.  But right now, Obamacare is not well liked and it is only going to get worse, even with Obama arbitrarily changing the law by himself.

As I continue to say, the Republicans are not going to defeat Obamacare.  Obamacare is going to defeat Obamacare.  It is already happening.