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Proposal Two: Improvements to Work Study and College Internships

23 Sep

Proposal Two: Improvements to Work Study and College internships

Funds for work study positions on campus should be increased. Additional funds should be allocated to subsidize internships at start-up firms. Student interns at federal agencies and departments should be paid at least a minimum wage.

Background on work study programs: Around 700,000 students per year receive federal work study positions, mostly in jobs on campus. Work study positions are disproportionately used at private four-year colleges. The use of work study has fallen by 25 percent in real inflation adjusted terms between 2000 and 2015.

Discussion on internship issues: Increasingly, internships are a necessary step towards a first job. Students from lower income households may not be able to afford to take an unpaid position. The percent of students taking unpaid internships to obtain job experience has risen substantially in recent decades. Many students taking unpaid internships rather than normal jobs end up incurring more college debt.

Private firms hire unpaid internships often find themselves in violation of state and federal minimum wage laws. Start-up firms often do not have the cash to pay interns salaries. The use of federal funds for work study positions at start-ups would enable these firms to hire interns.

One concern with unpaid and paid internships involves the possible displacement of full time hires. This concern is mitigated by limiting the duration of the internship to six months and by limiting eligibility to students enrolled in a university.

I don’t have much to say about this proposal except that government should lead by example. Budgets are always tight at federal agencies but believe me budgets are generally much tighter at start-up firms, which often find it difficult to take on unpaid interns due to minimum wage laws.

Next set of issues:
The next set of proposals involve providing debt relief to students who find themselves over-extended. Many conservatives have taken a really harsh view of debt relief and bankruptcy. I believe their approach is shortsighted because debt relief efforts can closely target people with the greatest need. Debt relief efforts can in some circumstances benefit taxpayers. Also, debt relief for the most vulnerable make austerity programs and budget cuts more humane.

I have three posts on debt relief, one on possible changes to the income based replacement plan, one on issues related to public service debt forgiveness programs, and the third on rules governing bankruptcy.

Proposal Three: Reforming Income Based Replacement Loan Program
https://economicmemos.com/2017/09/24/proposals-three-reforming-income-based-replacement-loans/

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