The Agenda

Why Georgia Work$ Works

Ike Brannon has praised Jason Furman’s call for taking the Georgia Work$ program national in The Daily Caller, and I’d like to second the proposal:

 

Jason Furman is the ostensible proponent (as well as the subject of a petition campaign attacking him) for what I think is a thoughtful, innovative proposal that would encourage corporations to hire unpaid, currently unemployed young professionals as interns to help them get a toehold in the workaday world.

I’ve got no idea whether this is a liberal, conservative or reactionary policy, but I do know it makes a lot of sense. It also happens to be a good example of the administration taking a cue from the states and borrowing something that is working there — in this case, the model is a Georgia program designed by Georgia’s Democratic labor commissioner, [Michael] Thurmond, called Georgia Work$.

The program recognizes that unemployment not only costs workers their lost wages but robs them of valuable experience they need to move up the ladder. Spending two or more years without a job can be devastating to a career, and anything that we can do to help alleviate this is a step in the right direction. By allowing people who are receiving unemployment to work for free for a limited period of time without losing their benefits, the program encourages employers to look for people worth their while to train while at the same time encouraging potential employees to get back into the labor force.

Brannon links to a Stateline.org report by Christine Vestal that notes objections to the program:

Under the program, job seekers can spend 24 hours a week for up to six weeks in on-the-job training and continue to collect unemployment checks. If not receiving unemployment benefits, workers would agree to become unpaid trainees. In both cases, the state would provide each worker up to $600 to help defray job-related expenses such as transportation, child care and clothes. …

 

Despite rave reviews from some quarters, Georgia Work$ has its detractors. In a letter to the U.S. Department of Labor, the National Employment Law Project said the program runs the risk of violating fair labor laws if the businesses fail to provide legitimate training under federal rules. “Training is not just some canned phrase that’s up to the employer or the state to decide. It’s determined by federal wage and hour laws,” says the worker advocacy group’s co-director Maurice Emsellem. 

Responding to the complaint, the federal government advised state agencies that if employers want to provide on-the-job training without paying minimum wage, the courses must be similar to those provided in vocational schools or academic settings and must not displace regular workers. In addition, employers must make sure trainees understand they are not entitled to wages and are not guaranteed a job upon completion of their training. [Emphasis added]

Given that many of the potential employers are small firms that are very unlikely to have the resources needed to offer courses similar to those provided in vocational schools or academic settings, the federal government may well undermine the central virtue of this approach, namely that it provides meaningful on-the-job training. 

At the risk of stating the obvious, Georgia Work$ sounds like a second-best approach to addressing the fact that the statutory minimum wage prices at least some potentially productive workers out of the labor market. Employers who might be willing to hire workers at a very low wage, factoring in the time and effort they’d have to devote to providing training, are unwilling to take on the risk at the minimum wage. By allowing for unpaid internships under strictly limited circumstances, Georgia’s labor commissioner is helping to alleviate a problem that labor market regulation has created. Merely acknowledging that the minimum wage might price some workers out of the labor market isn’t in itself a decisive case against minimum wage laws. There could be other compensating benefits. But Georgia Work$ does look like a solution to a problem created by another solution to a problem. Since we’re not going to eliminate the minimum wage, bracketing the question of whether or not we should, Georgia Work$ is an excellent idea.

Michael Thurmond is a Democratic candidate for the U.S. Senate. His opponents would be wise to embrace his innovative proposal.

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