It is illegal to work for free. What?
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.