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Imagine that you have an opportunity to "bid" on the right to be a waiter this evening at Masa, the NYC $400/plate (not including alcohol) sushi restaurant. Yo

Imagine that you have an opportunity to "bid" on the right to be a waiter this evening at Masa, the NYC $400/plate (not including alcohol) sushi restaurant. You are an experienced waiter and expect to average 18% in tips on 20 plates served over the course of four hours. Presuming that no one orders alcohol, that's $1440 or $360/hour. If there were no labor laws and Masa really had a free market system such as this in place, it would be rational for a waiter to pay a great deal for the right to collect these tips given that there are few opportunities available to make this much money relative to the supply of capable servers. I see the internship market as similar. How much is it worth in future earnings to directly observe "how the sausage is made" in a Senator's office? To watch a PR mogul operate after Client X is caught on video grinding up cute puppies in a blender? There are many more people who could profit later from these experiences than there are internships to dole out. It is only the relatively constrained supply of good software engineers which prevents Google from charging for the right to spend a Summer there (not that I think it would even if it could).

antiterra 16y ago
I think you're missing what's actually happening here. In these cases, the students are paying the university for a "registration credit," in order to legalize work without pay. The provider of the internship does not receive this money, and the amount is, more or less, arbitrarily decided by the academic institution. The amount the student pays is therefore cushioned and abstracted from the sort of market forces you describe.
- ShabbyDoo 16y ago
  I agree with you, but my point was only that paying (or simply taking a loss by paying rent in NYC for the Summer) might actually be rational on the student's part. Whether or not the firm receives the payment makes little difference to me in this case although I do appreciate the distinction. My comment about Google charging certainly could have led one astray.
bugsy 16y ago
The waiter situation is not very comparable because the payoff is instant. You collect enough each night to pay the fees. Thus the situation is more akin to renting a booth to sell your wares. You pay rental for access to a crowd that is buying things (food and wait services). Furthermore, the risk is low. If payback is not as much as you expected after the first night, you can move on with only one nights rent lost. With the internships, there is certainly not an instant pay off. You pay and receive nothing during which you work to benefit the first. No one is paying you for months on end. There are no nightly tips.
- ShabbyDoo 16y ago
  I agree that the waiter's risk is much lower. It was only the evidence that it is sometimes rational to pay for the right to work which I sought from the example.

antiterra 16y ago

I think you're missing what's actually happening here. In these cases, the students are paying the university for a "registration credit," in order to legalize work without pay. The provider of the internship does not receive this money, and the amount is, more or less, arbitrarily decided by the academic institution. The amount the student pays is therefore cushioned and abstracted from the sort of market forces you describe.

ShabbyDoo 16y ago
I agree with you, but my point was only that paying (or simply taking a loss by paying rent in NYC for the Summer) might actually be rational on the student's part. Whether or not the firm receives the payment makes little difference to me in this case although I do appreciate the distinction. My comment about Google charging certainly could have led one astray.

bugsy 16y ago

The waiter situation is not very comparable because the payoff is instant. You collect enough each night to pay the fees. Thus the situation is more akin to renting a booth to sell your wares. You pay rental for access to a crowd that is buying things (food and wait services). Furthermore, the risk is low. If payback is not as much as you expected after the first night, you can move on with only one nights rent lost. With the internships, there is certainly not an instant pay off. You pay and receive nothing during which you work to benefit the first. No one is paying you for months on end. There are no nightly tips.

ShabbyDoo 16y ago
I agree that the waiter's risk is much lower. It was only the evidence that it is sometimes rational to pay for the right to work which I sought from the example.