This is one of those concepts that sound great in theory but look awful in practice, kind of like Keynesian economics.  The tech-savvy hipsters at the SXSW festival in Austin create a huge demand for wireless Internet connections, so much so that marketing agency BBH decided to take advantage of the gap in supply — by enlisting homeless people to act as walking wi-fi hotspots.  What could go wrong?

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A marketing agency touched off a wave of criticism and debate when it hired members of the local homeless population to walk around carrying mobile Wi-Fi devices, offering conference goers Internet access in exchange for donations.

BBH Labs, the innovation unit of the international marketing agency BBH, outfitted 13 volunteers from a homeless shelter with the devices, business cards and T-shirts bearing their names: “I’m Clarence, a 4G Hotspot.” They were told to go to the most densely packed areas of the conference, which has become a magnet for those who want to chase the latest in technology trends.

The smartphone-toting, social-networking crowds often overwhelm cellular networks in the area, creating a market that BBH Labs hoped to serve with the “Homeless Hotspots” project, which it called a “charitable experiment.” It paid each participant $20 a day, and they were also able to keep whatever customers donated in exchange for the wireless service.

But as word of the project spread on the ground and online, it hit a nerve among many who said that turning down-and-out people into wireless towers was exploitative and discomfiting.

Tim Carmody, a blogger at Wired, described the project as “completely problematic” and sounding like “something out of a darkly satirical science-fiction dystopia.”

Well, there certainly may be a problem with the compensation.  Twenty dollars for a day of work hardly equates to minimum wage, in Austin or anywhere else.  Texas adheres to the federal standard of $7.25 per hour, so unless the wandering wi-fiers only worked two hours during the day, BBH broke the law.  They may argue that the homeless were not employees but independent contractors and that the expected donations would make up the difference, but I suspect they’d have a very difficult time winning that argument with the Department of Labor.  Wait staff in even the cheesiest of restaurants have to be given minimum wage based on an hourly rate even though tips are an integral part of their compensation.

BBH might be expected to argue that it would cost too much to pay someone minimum wage to run this project, and that the work gave the homeless an opportunity to earn something.  After all, the homeless who took part did so voluntarily, it didn’t interfere with any other income opportunities, and at a higher cost the opportunity wouldn’t have presented itself at all.  That is a great argument — against the minimum wage laws themselves.  Those regulations impose higher costs on entrepreneurial efforts and squelch some that might have some value, although this project was at best ill-advised just on optics alone.

You know who would agree with BBH? The people whom they employed:

The human hot spots seemed unconcerned as well. One volunteer, Clarence Jones, 54, said he was originally from New Orleans and became homeless in the aftermath of Hurricane Katrina.

“Everyone thinks I’m getting the rough end of the stick, but I don’t feel that,” Mr. Jones said. “I love talking to people and it’s a job. An honest day of work and pay.”

What do you think?  Did BBH cross the line, or did they give people who could use a few bucks a way to contribute positively?  Take the poll: