russiangambit (29.94)

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It is illegal to work for free. What?

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July 13, 2009 – Comments (8)

Continuing with the minimum wage discussion. Apparently, in the US and other countries with minimum wage laws it is illegal to work for free or for anything lower than the minimum wage other than volunteering for non-profit. There is an article on CNBC this morning on how unemployed people want to work for free for prospective employers to keep their job skills current. I think it makes a lot of sense. In fact, I did it too once. Nobody wants to hire inexperienced people until you can prove you can do it. It is a catch 22. New person requires a lot of training. So, you are training them and you are paying them for it? Unbelievable. What happened to the idea of apprenticeship? I know there are interns in the US, are there limits on how old they can be? DO they also have to be paid min wage?

I can see paying a person who wants to get job skills and who I don’t really need about $500 a month to cover food and other minimal expenses, assuming they live with the parents and parents help with other expenses, just like they would if a person were at a college. And I would lock them into 2-year contract to pay off for their training afterwards.

I just see people being laid off in droves after the July min wage hike. Inexperienced person who I still have to train, which means I get less time to get all my work done, is not worth $10 per hour. That applies to lower skilled jobs. For higher skilled jobs we are talking college grads who still have to be trained for at least 6 months while you are paying them 50-60K a year. There are not going to be jobs for them either.

On a positive note, Meredith Witney upgraded GS today and she made some positive comment on the banks, in the effect saying that some of them will be able to earn their way out on the debt issuance and mortgage refinancing fees.

However, she sees unemployment reaching 13% and many banks are not prepared for it. So, some banks will be able to make it but overall they are in big trouble I think. CIT is talking about possible bankruptcy this morning.

8 Comments – Post Your Own

#1) On July 13, 2009 at 11:06 AM, Schmacko (92.75) wrote:

I'm pretty sure unpaid internships still exist in America. Also waiters/waitresses are paid less than minimum wage.

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#2) On July 13, 2009 at 11:43 AM, madcowmonkey (< 20) wrote:

Are there not internships in Congress? Political Campaigns? How else do you think any work gets done in Washington:)

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#3) On July 13, 2009 at 11:45 AM, caterpillar10 wrote:

w/o gratuities involved - starting a biz and paying self and partners zero is the only way i know to be completely outside the law. there may be a way to go on as a 'consultant' and bill zero during 'assignment orientation' but you'll want a tax geek to set it up as many independent contracting loopholes were redefined in 60s&70s to hem in people avoiding witholding ect. even car dealers had to start paying reps min.wage which they can recover against 'billable gross' in the same period - another way to go if a firms revenue can be tied to a 'consultant's' activity.....

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#4) On July 13, 2009 at 11:48 AM, ReadEmAnWeep (33.17) wrote:

"What happened to the idea of apprenticeship? I know there are interns in the US, are there limits on how old they can be? DO they also have to be paid min wage?"

They have unpaid internships for "school credit". I believe any other kind of internship will be for minimum wage - they can't pay you less if you are getting paid.

You can work for comission as an independant contractor - but we all know that is bs.

I heard that about waiters and all that - they consider your tips money that they pay you, when in reality it is not money they paid you. So that sucks.

I think the only unpaid internships are part of school. I think you can still "volunteer" at some companies though.

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#5) On July 13, 2009 at 1:09 PM, Schmacko (92.75) wrote:

"I think the only unpaid internships are part of school. I think you can still "volunteer" at some companies though."

I think there's loopholes for some non profits and religous organizations somewhere in there. I remember reading an article about scientology talking about how they worked the hell out of their non-famous lower level people and paid them far below minimum wage and could get away with it, because they had the status of being a religous organization.

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#6) On July 13, 2009 at 1:39 PM, ReadEmAnWeep (33.17) wrote:

"...reading an article about scientology ..."

Ha, I bet. Scientology is more of a cult than a religion because of that and other reasons, I think. It is funny either way - Pay us money to move up in the "church".

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#7) On July 13, 2009 at 2:09 PM, lemoneater (86.84) wrote:

College work scholarships sometimes pay below minimum wage also.

My husband wanted me to darn his socks but I told him that it wasn't cost effective at what I was worth an hour and that it really would be better to buy some new socks. LOL

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#8) On October 26, 2009 at 6:57 PM, kdc123 (< 20) wrote:

As a teenager, I can tell you that internships are unpaid 9/10 times. Any law against it is about as effective as the one saying you have to pay tax on the money you pay your babysitter - as in, not at all.

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