The other day, a freshman from Santa Clara University called me to inquire about internships at PRI. She had just heard Sally Pipes give a talk on health care. She was also familiar with the work of Arthur Laffer. As an economics student, she thought PRI would be a great place to get hands-on research experience.
It pained me to tell her that this summer, we decided not to offer internships. The $14 hour minimum wage law in San Francisco put interns beyond our budget. Back-of-the-envelope math showed that if an undergraduate or masters student worked full-time for 10 weeks for PRI, the salary expense would be about $5,600 per intern. That’s about what universities pay PhD candidates for summer fellowships.
Indeed, salary is just one of our expenses for interns – there are also payroll taxes, IT expenses, and space considerations. Another big worry: the lack of affordable housing in San Francisco. The average rent for an apartment in the city is now $3,803 according to Rent Jungle. Even if we paid the minimum wage, where would the interns live?
On balance, it just made better business sense for staff to do their own research, knock out the daily e-blasts, or stuff envelopes.
For years, PRI offered summer internships. We got the opportunity to mentor great young minds who grew up to become leaders in business, government, and the free-market movement. And these young scholars got valuable work experience.
I was a White House intern in the Reagan Administration. While we weren’t paid, we were richly compensated in other ways. I made many connections, many of whom are still my colleagues and friends today. In fact, during my internship 30 years ago, I met Clark Judge, the chairman of PRI. He was partly responsible for bringing me to PRI. An internship changed the course of my career, and did so for hundreds of thousands of other young people.
There are no studies yet on the impact of minimum wage on nonprofits or internships. But over time, it wouldn’t surprise me that the nonprofit world will scale back their internship programs – especially if it strains the budget for full-time staff. As we’ve argued at PRI many times, minimum wage laws hurt the very people they intend to help.
Rowena Itchon is senior vice president of the Pacific Research Institute.