Economic Analysis of Unpaid Internships
Human capital is important in facilitating performance outcomes of organizations across the world. It is important for an individual to adopt an approach to developing a platform that would be utilized to incorporate an investment attitude and lifetime perspectives. This paper focuses on answering questions that are related to unpaid labor. In addition, it supports or disputes some arguments and policy proposals in the labor market.
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A college senior is considering taking an unpaid internship after graduation. Using the basic human capital investment model, explain how this student would decide whether or not to take this unpaid internship.
Using the human capital investment model, the college senior would make a decision whether to take an unpaid internship after graduation. Upon graduation, the student would have invested in education and training. If he or she would move in search of an unpaid internship, he or she would also invest in terms of migration.
All these are investments of human capital that should be paid. Assuming that the college senior would have acquired the required skills and knowledge that would be applied in the job market, he or she should not take an unpaid internship.
Are unpaid interns considered to be in the labor force?
Employers may utilize internships as a strategic management approach to reducing the costs that are associated recruiting and compensating personnel. It can be argued that interns who are not compensated for their services are not in the labor force.
Two important elements in relation to the labor force are service offers by workers and wages that are given by employers. In fact, persons who are not paid cannot be regarded as valuable assets in the labor market.
Policy analysis of unpaid internships
It is true that unpaid internships are used to exploit students. It is unfair for students to do a lot of work, yet they are not compensated for their services. Unpaid internships are used to improve outcomes of firms at the expense of students.
Position A: Unpaid internships do not exploit college students and should be seen as human capital investments just like any other training/education programs that workers participate in.
Unpaid internships are designed to help college students to develop practical skills in the job market. In most cases, there are differences between what colleges teach and what the labor market requires. Thus, students should offer free services so that they may be trained.
Position B: Unpaid internships exploit college students and the US Department of Labor should create and enforce stricter regulations to protect students.
The US Department of Labor should aim at creating and enforcing strict rules that would go a long way in protecting students in the context of unpaid internships. The department should inform all employers that it is illegal to enjoy free services of students.
Assessment of the policy proposal
In the contemporary job market, it is difficult to measure the benefits that are derived from an intern. Thus, it would be misleading to adopt the proposal, which states that compensation should be based on interns’ production and employers’ costs. If an employer is not keen on paying a student, then wrong figures with regard to the intern’s production and employer’s costs would be given.