Standing in the Way of Success

Megan McArdle has a good post and excerpts from Adam Shepard, who set out with $25 to see how hard it was to escape from poverty.  I won't re-quote that post here, you should see her site, but I wanted to comment on one thing Shepard says about his early days trying to convince supervisors they should hire a homeless guy:

So, he gave me the secret. To paraphrase, he told me to go to these
managers and tell them who you are, that you are the greatest worker on
the planet and that it would be a mistake not to hire you. If they take
you on, great. If not, move on down the line. By day's end, you're
gonna have a job.

So I did. The next day, I went to see Curtis at Fast Company, a
moving company where I'd already applied. "Curt!" I said. "I'm Adam
Shepard, and I'm the greatest mover on the planet. It would be a
mistake for you not to hire me." He looked at me across the table and
smiled, knowing I was lying like hell to him. But he liked my attitude
"“ especially after I offered to work a day for free "“ so he hired me on
the spot.

This is very normal -- if you want someone to take a risk, you try to reduce the cost for him.  Not sure you want to try our product?  We'll give you a free sample.  In this case, he agreed to work for free to convince the manager he was a good worker.  This makes sense -- to emerge from homelessness and to get a job with no skills and no work history, one needs to be willing to give a bit of a discount on your labor, at least at first, to get someone to give you a chance.

But here is the interesting part -- the arrangement Curtis and Adam Shepard made is ILLEGAL.  The Fair Labor Standards Act, which includes Federal minimum wage law, does not allow Curtis to accept unpaid labor and does not even allow Mr. Shepard to offer it.  The fact that the deal makes so much sense and it so clearly is in the mutual best interest of both parties is absolutely irrelevant under the law.  Fast Company could be busted, should the DOL choose to focus its attention their way.

When people argue that the minimum wage is most harmful to the poor, because it prices the first rung of the labor ladder beyond what their minimal skills can justify, this is what they mean.

 

  • Tom

    Great point! One area of the economy where this goes on all the time LEGALLY is at non-profits. I worked at three different non-profits over 5-6 years and saw a lot of volunteers eventually end up on the payroll.

  • kebko

    Do you know, technically, how volunteer positions & unpaid or barely paid internships function? Are they technically illegal, or is there a loophole, or are there not any arrangements like this any more?

  • ParatrooperJJ

    I think you are misunderstanding the process. You can not volunteer for the same company you get a paycheck from. It is perfectly legal to volunteer your services for any organization, but once you get a paying job then you are not allowed to volunteer anymore.

  • Dan

    Interesting. But arguably, a company could take advantage of the worker who volunteers his services for the day, taking the work and then telling him he's not wanted after that. An especially nefarious company could make it part of their strategy to take on as many "free" workers as possible this way.

  • http://evansparks.wordpress.com Evan

    I read Shepard's book. The full story is that Curtis approved so much of Shepard's assertiveness that he offered him a job, at a higher wage than was advertised, without accepting the free labor. Fast Company is OK with the law... :)

  • http://evansparks.wordpress.com Evan

    I read Shepard's book. The full story is that Curtis approved so much of Shepard's assertiveness that he offered him a job, at a higher wage than was advertised, without accepting the free labor. Fast Company is OK with the law... :)