Remember the “good old days” when young people would apprentice for a few years earning nothing just for the chance to learn a trade? Well, I don’t either, but that is the way things used to work.
Enter minimum wage laws. All of a sudden, working for no monetary compensation is illegal. In reality, though, the apprentice does receive compensation in return for his labor: the acquisition of a valuable skill. The apprentice receives a valuable skill and the recommendation of his teacher while the employer receives a number of years of labor and the satisfaction of helping a young person succeed.
Today, there is only one way for a young person to gain skills necessary for a career: college. If one studies the situation, one would easily see that this situation is much worse than apprenticeship. Obviously, there are some careers that require college education and many people would benefit and enjoy the broader education college provides. But for somebody who is only interested in learning a skill, apprenticeship is vastly superior than college. Instead of working without compensation a couple of years to learn a skill, the young person is forced to pay a college to learn these skills. Now, the young person has graduated with a debt of tens or hundreds of thousands of dollars. How is that better off than working for nothing? And in fact, the college graduate is often behind where he would have been had he been working in the industry for a number of years learning these skills hands-on instead of in a classroom, making valuable contacts within the industry, and establishing a close relationship with a successful professional in the same field.
The young person today often chooses to skip college and go straight to work after high school. Many have no desire for college and others cannot afford it. Apprenticeships would be great for just such people, but they are now illegal, in almost all cases (political internships and graduate assistants seem to be the most obvious exceptions).
Thus, our young people are stuck in a Faustian choice between going to college and graduating with little or no hands on experience and deep in debt or working at a low skilled job for low pay. And that’s assuming they can get such a job in this environment, where the benefit an employer may receive less output from the employee than the costs of his minimum wage and other costs, such as insurance, payroll taxes, and compliance with government regulation.
As a result, young Americans are not learning the skills they need and thus earning less in later years. To help everybody become more productive and earn a better living, we need to eliminate minimum wage laws and bring back apprenticeships/internships.