Young People Should Work for Free
Jul 05, 2010 - 10:07 AM GMT
With young people nearly shut out of the market (by recession, regulation, "child" labor laws, and ghastly minimum wage laws), I would like to suggest the unthinkable: young people should work for free wherever they can and whenever they can. The reason is to acquire a good reputation and earn a good recommendation. A person who will give you a positive reference on demand is worth gold, and certainly far more than the money you might otherwise earn.
Many of the essays in my book Bourbon for Breakfast turn out to have forecasted both the current mess and this solution. But first let me tell a story of two cases in point, the first an example of the worst possible kind of worker, and the second an example of brilliant foresight.
The first case comes from a job I had in my teens. I was standing around with a few other employees in a clothing shop. The boss walked by and said to my coworker: "Please straighten these ties on this table." My coworker waited until the boss walked away, and then he muttered under his breath: "I'm not doing that for minimum wage."
That comment seared right through me, and I thought about it a very long time. The worker was effectively asking for money up front before working, even though he was employed to do things like straighten ties. This was even worse than insubordination. He had this idea that the value he contributes to the firm should never exceed the value of the money he is earning in money. If that must be true, one wonders why anyone should ever hire him.
The goal of every employer is to gain more value from workers than the firm pays out in wages; otherwise, there is no growth, no advance, and no advantage for the employer. Conversely, the goal of every employee should be to contribute more to the firm than he or she receives in wages, and thereby provide a solid rationale for receiving raises and advancement in the firm.
I don't need to tell you that the refusenik didn't last long in this job.
In contrast, here is a story from last week. My phone rang. It was the employment division of a major university. The man on the phone was inquiring about the performance of a person who did some site work on Mises.org last year. I was able to tell him about a remarkable young man who swung into action during a crisis, and how he worked three 19-hour days, three days in a row, how he learned new software with diligence, how he kept his cool, how he navigated his way with grace and expertise amidst some 80 different third-party plug-ins and databases, how he saw his way around the inevitable problems, how he assumed responsibility for the results, and much more.
What I didn't tell the interviewer was that this person did all this without asking for any payment. Did that fact influence my report on his performance? I'm not entirely sure, but the interviewer probably sensed in my voice my sense of awe toward what this person had done for the Mises Institute. The interviewer told me that he had written down 15 different questions to ask me but that I had answered them all already in the course of my monologue, and that he was thrilled to hear all these specifics.
The person was offered the job. He had done a very wise thing; he had earned a devotee for life.
The harder the economic times, the more employers need to know what they are getting when they hire someone. The job applications pour in by the buckets, all padded with degrees and made to look as impressive as possible. It's all just paper. What matters today is what a person can do for a firm. The resume becomes pro forma but not decisive under these conditions. But for a former boss or manager to rave about you to a potential employer? That's worth everything.
Sadly, many young people who can't get jobs have no work experience to show for themselves at all. They have been wildly misled all their lives about the great glories that await anyone who "stays in school" and gets great grades. There are innumerable aerospace engineers, mathematicians, and even lawyers who are in this situation, to say nothing of sociologists, historians, and people with degrees in communications and marketing.
Adding to the problem today is the burden of student loans. Kids are graduating today with six figures in debt that they will immediately be forced to service if they accept employment. But with no prospects outside Wal-Mart and Starbucks, they opt to stay in school and get yet another degree, hoping all the while that the labor market will turn around. This is a terrible trap.
They have structured their lives around the speculation that a high-paying job awaits following graduation. But there is no such thing. A low-paying job isn't even enough to pay the rent plus debt service.
It was a very bad speculation. Their dreams are being killed by a desperately tight labor market for anyone without work experience or any kind of work reference at all. Under these conditions, the solution is to gain that thing of highest value. That means volunteering. The state can't come after you to start paying the student-loan debt, and yet you gain people who will become your benefactors later.
Where to volunteer? A nonprofit such as a church or educational group would be fine. But also fine might be a local plant nursery, lawn service, mail house or printer, or even at a law firm. You can make an application informally but be clear that you want no payment. If there are legal issues, try to work around them. If you are accepted (not a foregone conclusion), set hours for yourself and stick with them. Make yourself super useful, super dependable. Get to know as many people as possible. Explain that you are working only for the experience, which you value. Do this for six months up to a year. Then you will have something interesting and wonderful to tell future employers about.
A time will come when one of the people you came to know will receive a phone call. He or she will be asked their opinion of you and your work. That's when the whole of your life can change for the better. Is that six months to one year of volunteer work worth it at that moment? It is worth everything.
On the other hand, you can spend your life refusing to straighten ties because you aren't paid enough to do that. That person will never be paid to do anything.
Jeffrey Tucker is the editor of Mises.org. Send him mail. See Jeffrey A. Tucker's article archives. Comment on the blog.
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Shelby Moore (author of "End Game, Gold Investors Destroyed")
06 Jul 10, 05:00
School is working for less than free
School is working for less than free. A challenging job is better education and it costs less. You might just get hired as you become important to the company where you volunteered. Any super talented and motivated software programmers (I am) should contact me, if they want to change the world and end the bankster fraud.
06 Jul 10, 11:41
Talk about confused thinking! You correctly note that "A low-paying job isn't even enough to pay the rent plus debt service." and yet you recommend that young people should work for free. Working for free might take care of the student loan repayment problem temporarily, but it certainly will not pay the rent or do anything for you at the super market. And if all youth took your advice, then there would be no advantage when applying for a paying position....A far more sensible approach would take a serious look at wealth distribution first. The top 1% of earners now make what the bottom 90% earn. Adress that issue and unemployment would no longer be the problem it is.
06 Jul 10, 20:05
Socialism is a solution?
re: Confused thinking by vox
Your solution to a failure being caused by socialism (due to fractional reserve debt is socialism, theft via inflation, and leads to a larger fascist govt), is to advocate more socialism, i.e. you want a centrally planned wealth redistribution. You are so confused about economics, and you are an example of why our system is socialist. You think you are capitalist, but you don't realize you are a socialist.
Read my prior post and think. Working for free is less costly and more educational than going to school (after a certain level of proficiency is obtained in school). Plus, you are being paid in experience, interaction with those who generate wealth, and networking. Do you realize how much it costs to provide the overhead for a company? You get that for free, by working for free. There are 7 billion people in the world, it is going to take a lot of production to employ them all. 6 billion people are going to be fighting for 1 billion jobs, until we all get productive and stop whining like a bunch of spoiled 5 year olds on the floor at Toys-R-US. Life is about production. You might even be able to sleep at work and order pizza on the company tab. Do you have any idea who you are competing with? I live in Asia, and I programmed CoolPage(.com, a million user product BEFORE friendster, mypsace, and facebook) from a Nipa Hut eating rice and vegetables only in a squatter community where I had dysentery and fever every week from all the unsanity conditions. Do you understand that my welder works very hard for $10 per day and lives in squalor and that is a very high salary here (3 - 5 times the normal salary for unskilled high school graduate).
Wake up westerners, you are getting ready to be hit by an economic tidal wave!
07 Jul 10, 02:53
Response to Shelby Moore
Whatever gave you the idea that i think of myself as a capitalist? Nothing could be further from the truth. As for my being confused about economics, i can only hope that i never come to have your self-proclaimed clarity of vision. As for your bandying about emotionally charged terms such as socialist and fascist, you show yourself to be a third rate intellectual who rather than dealing with the facts, resorts to name calling. Shame on you. As well, i suspect that you have no idea what fascism (or socialism for that matter) really is. Having one or two characteristics in common with fascist regimes does not make a country fascist. Read some history before you go making such outlandish claims.
You have asserted that by working for free you MIGHT get hired and you MIGHT even be able to sleep at work and order a pizza on the company dime. Yeah, that sounds like a really sensible game plan. And let us not lose sight of the fact that by working for free, we are taking away a paying job from someone else. Should that person then solve their unemployment dilema by going to work for free at another company, hoping that they can sleep at their desk and order a delicious and nutritious pizza at the expense of their kindly employer? And what then for that now redundant employee?
You wish to put the blame for the economic tidal wave that is about to hit on socialism. What utter hogwash! It seems to me that the socialist countries such as Norway, Sweden,
Canada and Australia are in pretty good shape. But i suppose that is a fact you would rather not be confronted with.
As for what i had to say about dividing up the economic pie more equitably, i urge you to consider the following facts.
In the decade of the 1960's, the bottom 90% of families took home 66% of the economic pie while the top 1% earned 12%. Compare that with the situation for the years 2002-2007 when the bottom 90% earned 11% of the economic pie while the top 1% took home 67% of it. (These figures are for the U.S. and come from the Labor Dept. and the Fed.) Unless i am sorely mistaken, the captains of industry were able to keep their factory doors open in the 60's. Indeed, it was a far more prosperous time for the country as a whole and so your question wondering if i realize just how much it cost to provide the overhead for a company shows that you either have no idea yourself or that you are a paid shill for the financial elite.
As for what you had to say about how it is better to work for free than stay in school once you can read and write, you yourself debunked that nonsense when you stated that your welder makes 3 to 5 times what a high school graduate earns. What you failed to say but was implied is that someone with a higher education will earn 3 to 5 times more than your welder. And yes, i too have lived in Asia, so i do know what i am talking about.
And by agreeing with the author about working for free, i take it that you also find the minimum wage laws to be ghastly. Yet Mr. Tucker claimed that one could not pay one's rent and service their student loan debt with a minimum wage job. Your solution that a person work for free, after dropping out of school, hoping that they can sleep on the shop floor and that their employer will buy them the occasional pizza is utterly banal.
What you propose is a system that can only benefit those who are in no need whatsoever of a helping hand. Whether you realize it or not, you are advocating for corporate welfare and that it should come from the poorest and most desperate members of society through the gifting of their labor. You try to gussy it all up by claiming that this MIGHT lead to a paying job one day and that in the meanwhile one should be happy to sleep on the shop floor and eat whatever and whenever the boss pleases. It kind of sounds like you long for a return to the good old days of feudalism.
07 Jul 10, 11:55
Let's gang up to steal from each other
A fact is that societies that steal from each other, end up in great misery and poverty eventually.
I have defined 'socialism' and 'capital':
(also read the post higher on that page about the 10 manifestos of Communism)
"Socialism is the redistribution of capital from individual decisions to central managers"
The problem is that socialists do not understand the law of entropy (1st law of thermodynamics) that small things grow faster, i.e. a poor person can double his net worth in a day, buying a cold drink and selling it for double-price at a stoplight on a hot day. Whereas, central decision making and laws, destroy capital (they destroy the opportunity for small decisions that grow faster). Thus sure way to know that socialism is increasing, is when the governance is increasing as a percentage of the economy:
vox, your proposals all involve increased central decision making, which is socialism as I have correctly defined it (check dictionary.com also). You propose to steal from me, so do not expect me to be nice to you, you are a thief. Whereas, capitalism is equivalent to anarchy, where capital is free to maximize itself. Socialists like to use bogus environmental fear to scare people into anarchy is not superior to socialism:
(see Global Warming charts near bottom of linked post)
We see that when govt is in control, there are horrible disasters:
Socialism is a way (ganging up in central governance and fiat inflation) for a few people to steal, plunder, and manipulate the rest of us. The Bible warned us about this 2000 years ago, but we are STILL too stupid to listen:
http://www.biblegateway.com/passage/?search=Exodus%2020:15&version=NIV (8th commandment)
vox, there is no emotion, socialism is mathematically guaranteed to result in poverty, and thus eventually in dictatorship and/or fascism. Study history.
Countries that have small population relative to their large natural resource contribution to the economy (e.g. Sweden, Norway, Canada, Australia), are able to fund their socialism for some time. But eventually this will catch up with these countries as it has in USA, as socialism (as I have defined it) will eventually allocate more than 100% of the resources and even destroy the production of natural resources.
Yes vox, the wealth becomes highly distributed to those few who can buy the central decision makers in socialism. They get their hands on the creation of fiat money, then they buy the politicians. Rothschild told us this, "Permit me to issue and control the money of a nation, and I care not who makes its laws".
It seems you somehow assume that centralizd law making can somehow be made orthogonal to centralization of control and power. You propose more of what caused the wealth to inequitably distributed.
vox, I wrote "proficiency", I did not write "read and write". That means once you have obtained the necessary building blocks for your desired career, then putting that knowledge to work for a while, actually generates more knowledge than adding more degrees and education. The author of this article was writing also about people deciding to stay in college for a 2nd or higher degree and taking on more debt in the process. I found that college classes were too slow. I would not attend class, and learn all the material from the book the night before the exam, and then usually got in the mid to high 90s in score (out of 100). I spent the rest of the time in the library learning what one would learn during their masters thesis, and also actually working and even creating my own software projects. Each person has to decide their own personal optimal mix of formal education and applied education. That makes a free market. The author's point is that taking on more debt beyond a point of diminishing return in incremental additional education, is more costly and less advantageous than applied education which can get one closer to earning an income. And I have added that apprenticeship actually earns an income, because you are getting many overhead items for free (things that I had to pay for when I did my own 'for profit' projects).
Yes I know that minimum wage is a way to steal from the poor. Due Coase's Theorem, the free market (economics) always routes around subsidies. Business will simply leave and go to where the labor is priced freely (the most competitive). If somehow a world govt is able to dictate that wages should be higher every where, then capital will be destroyed (see my definitions and math above), and thus more people will not have jobs.
You simply don't understand the basic laws of nature. One can not mandate the free market without destroying opportunity cost and thus destroying capital. As I said, you don't understand economics at all. But most economists don't understand either. They have been taught a bunch of nonsense by the bankster controlled educational and mass media system.
I proposed they walk away from their student loan and never pay it. Declare bankruptcy. Then go work for free for 1/10 of the years they would have been working to pay their debt. In that time, get a free place to sleep and eat, and build a huge reservoir of experience and connections in the industry. And then emerge from bankruptcy with a super high paying position and become extremely wealthy. Instead you propose to have govt mandate "solutions" that destroy capital and you propose to have students go further into debt and debt slavery.
You are the banal slave driver. I am the light of freedom and prosperity.
Bring on the debates!
P.S. The great thing about this working for free sleeping floor and food idea, is that it completely wipes out the govt's ability to regulate and destroy capital! And I slept on the floor and ate pizza in the office during most of my best software programming performances. It was actually fun and exciting to be so engaged in a project.
Also realize that as an entrepreneur, I had to put up my months of unpaid effort before a product was released that I could sell. Working for free (sleeping floor and food) is a similar investment in one's future earning capability, as one owns all the knowledge gained. Interestingly as automation increases, labor becomes more knowledge based, which means the employee keeps most of his work in his brain and owns it!
09 Jul 10, 23:34
Outsourcing is accelerating
Recent Celente interview talks about this:
I know many people in Cebu who have recently gone from abject poverty to being extremely high paid in call centers at $400 per month. This is about 3 - 4 times higher than the normal salary would receive here at their education level.
Please read my prior comments.
10 Jul 10, 10:59
Here is the link to the company in Cebu that is hiring so many people lately.
They do phone support for example for the cell phone companies in USA.
What is really striking is that people who had applied numerous times to be call center agents and were denied numerous times over the past 2 - 3 years, are now being snapped up and paid $400 salaries (that is roughly equivalent to a $5000 salary in USA in terms of status in society).
So I definitely sense first hand with numerous examples, the acceleration in outsourcing as Western companies respond to the depression, by cutting costs on labor.
14 Jul 10, 23:54
Opportunity cost of college degree
Denninger runs some computations at the link.
24 Jul 10, 10:56
The links and info I provided in my prior comments above about Skyles in Philippines, pertains to AT&T in USA which is outsourcing at least its internet services technical support (i.e. customers calling to find out why their internet connection is not working).
The are paying these workers about $300 a month, plus a daily transportation and food allowance. They are radically increasing their hiring, so it looks like they want to increasing outsource.