Unpaid And Unhappy: The American Internship Crisis

The reality of the internship is one that has changed with time. What began as an opportunity to gain insight into a career has expanded into a prerequisite for employment in nearly all fields. But what also began as a paid, temporary job has evolved into an unpaid form of volunteer work.

While paid internships do continue to exist, they are seemingly dwarfed by the number of unpaid internships available. A study by the Economic Policy Institute comments on the sparse data concerning internships stating, “Although no formal data exist regarding the prevalence of internships, numerous reports in the media and from university career service offices document the increasing importance of these experiences.”[1] Corporations demand experienced yet cheap labor, while students demand experiential learning to serve as the link between their education and their career. In an ideal world, unpaid internships are the perfect solution for both parties. They have become ubiquitous in today’s society and have grown , but they are governed with ambiguous regulation that provides little protections for students.[2] One trouble with the structure of the internship market is that only the wealthiest can afford to work without pay. As a result, the wealthiest students are  more likely to be the candidates with the embellished resumes, and thus will be more likely to obtain the best jobs. So how exactly does this dynamic manifest? To answer that question, one must first understand what exactly an internship entails and why they are so deeply sought after.

Internships are present in many arenas, from NGOs to Fortune 500 companies, to the government. Traditionally, the purpose of the internship was relatively clear: to provide an individual with the necessary skills and connections to turn a form of apprenticeship into paid work. The problem lies in the fact that, sometimes, internship duties have turned into coffee runs and other forms of menial labor for many unpaid interns. This turns into a vicious cycle where the unpaid intern could become an unpaid worker at the employer’s benefit, and never becomes a significant contributor to the company, and is usually not subsequently offered a paid position. A survey issued by the National Association of Colleges and Employers found that only 38% of unpaid interns were offered jobs.[3]

Such statistics may suggest that these practices would discourage students from applying for unpaid internships, but in reality it is nearly impossible to avoid them. With a post-grad unemployment rate of 8.6% (almost three %age points higher than the national rate) for 21-24 year olds, students need experience on their resumes in order to produce a competitive job application.[4] Unsurprisingly, employers are more than happy to have someone volunteer for the “privilege of working.” [5] The College Employment Research Institute found that 75% of college students work as interns at least once before graduating.[6] Internships are no longer a choice; they are a necessity — but not always a good one.

Supporters of the unpaid internship argue that they are to be expected and accepted. Heather Huhman, author of Lies, Damned Lies & Internships, says that, “A job listed on a résumé wouldn’t impress me just because it was a paid position. What matters is the experience you got from that job.”[7] This would be a valid argument if unpaid internships actually provided job experience; the sad reality is that many of them do not. A prime example of this is the lawsuit filed against Fox Searchlight Productions by two unpaid interns. Eric Glatt and Alexander Footman, interns on the set of the movie “Black Swan,” argued that since they “took lunch orders, answered phones, [and] arranged other employees’ travel plans,” they performed the simple tasks that are otherwise done by workers paid low wages.[8] This is hardly on-site movie production experience; this is the work done by paid assistants and secretaries, who receive at least minimum wage. The presiding judge, Judge Pauley, agreed, ruling that the interns did in fact deserve payment.

Judge Pauley also ruled that unpaid internships should only be allowed under very limited circumstances. He defined these circumstances as those that strictly adhere to the regulations set forth by the U.S. Department of Labor, which act as the greatest (and possibly only) limitation of unpaid internships in the United States. Fact Sheet #71 of the U.S. Department of Labor Wage and Hour Division lists six criteria pertaining to the validity of unpaid internships in the for-profit sector:

 

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. [9]

 

The ambiguity of these criteria lends itself to employers’ disregard. Criterion 1 poses a problem with its wording of “an educational environment.” Who is to say that running errands is not educational in the employer’s eyes? The subjectivity of the criteria renders them weak, and gives all power to the employer. For example, criterion 4 is a catch-22: when the employer providing training cannot benefit directly from the intern’s activities, they lack the incentive to provide meaningful instruction. Thus, the unpaid intern does not receive the necessary training to be of actual use to the company, causing the employer to assign them menial tasks. These bland guidelines are more rhetoric than enforceable law.

The nebulous line created in the criteria contributes to the ease of litigation for payment by disgruntled, overworked, and dissatisfied unpaid interns. This is exemplified by numerous lawsuits demanding back pay for unpaid internships, such as those against Fox Searchlight Productions, Harper’s Bazaar, and Charlie Rose.[10]

The potentially exploitative nature of the above criteria goes hand in hand with the non-existent regulations for unpaid internships in the non-profit sector. Nonprofit internships are regarded as “volunteerships,” where the question of payment is not addressed by federal law. Admittedly, this lack of regulation is appropriate for certain types of organizations where the interns cannot be paid due to shortage of funds. However, it would be misleading to assert that all nonprofits are incapable of paying their interns. Indeed there are several, such as the Smithsonian Institution which has amassed a wealth over $1 billion, which could afford to pay their interns without incurring financial hardship.[11] Some non-profits can only afford volunteers, and this is perfectly acceptable if these organizations can provide their interns with meaningful educational experiences.

Not all unpaid internships are created equal. Some are offered for course credit at a university in lieu of payment. Some are provided by non-profit organizations with various levels of revenue and experience to offer. And some are “part-time” — requiring only a few hours of work each week. These internships, while a critical part of the market, are not prone to an exploitation of the regulatory ambiguity as those internships offered by for-profit corporations

A possible solution for the lack of student protection in government internship regulation is to pay these interns the minimum wage. It’s possible that corporations would be less inclined to offer internships if a minimum wage law were enforced. It’s also possible that corporations would offer fewer paid internships, in an effort to save money. However, many companies could benefit from an internship minimum wage in the long run. The relatively speaking low level of investment in a paid intern could pay dividends to large and small corporations alike in the form of experienced, qualified, and eager employees down the road. As Amy Bravo, assistant dean of career services at the New York Institute of Technology puts it, “Eight dollars per hour for 10 hours per week for 10 weeks isn’t going to break them.”[12] After all, many corporations who are successful enough to be sought after by interns have the capacity to pay those interns, and many do. Additionally, companies may benefit from thinking critically about which internship positions are necessary, creating more value for both the paid intern and the company itself. Another potential perk for corporations with paid interns is an increase in productivity. Bravo says, “Students that are in paid internships generally take it more seriously because they think the employer takes it more seriously.”[13] Payment incentivizes the students to work harder in order to receive recognition in all forms within the company, benefitting both the employer and the intern.

Due to the importance of work experience on a student’s job application, companies that host the most sought-after positions may be less likely to to offer a financial incentive; thus prestigious internships may be frequently without pay. Poorer students are denied access to these sought-after internships, simply because these students need to make money to support themselves. Unpaid internships “discriminate on the basis of personal wealth.”[14] Mikey Franklin, executive director of the Washington-based Fair Pay Campaign, affirms, “You can only work for free … if you’ve got some other source to pay your rent, your gas, your grocery bills and your student loans.”[15] This dynamic potentially inhibits the ability of those of lower socioeconomic classes to move up in status and stagnates social mobility. As author Ross Perlin writes, “Those who can’t afford to work without pay are eager for the chance to break into the intern-heavy fields that are now all but closed to them.”[16] Hard data on this phenomenon is sparse and hard to come by, but there is abundant anecdotal evidence. According to numerous comments on an opinion piece by The Atlantic voicing opposition to unpaid internships, many less wealthy students find they are unable apply to the kinds internships that could improve their career prospects — simply because they cannot afford them.[17]

To date, the U.S. government has not expressed the requisite interest in tighter regulations, despite the apparent great need for them. The Obama administration claims to be committed to raising the national minimum wage, and has faced political opposition to such measures. The “Raise the Wage” campaign has resulted in an increase in minimum wage for new federal workers on service contracts through an Executive Order. [18]. Such measures have been discussed in several addresses by President Obama, including the most recent State of the Union.[19] Despite all this, the White House is one of the biggest perpetrators in offering unpaid internships, hosting roughly 300 per year.[20] Although not technically illegal, as it is a non-profit organization, the White House must act as a role model. If the nature of internships are to undergo a transformation, the actors executing the change must first embrace it themselves.

One catalyst for this transformation could be additional government regulation requiring interns to be paid fair wages. This regulation could expand the internship opportunities for students of all socioeconomic levels. Changing unpaid internships into useful work experiences for pay could aid both the interns and the overall economy. With fair pay for interns as a reward for their hard work, students of all socioeconomic levels can comfortably apply. Companies should not be able to exploit loopholes in Federal Department of Labor guidelines and should simply treat interns as minimum wage employees if they perform minimum wage-level work. While government regulation will not completely fix America’s internship market, it will certainly assist in alleviating the burden a new generation of employees will face, and ensure all interns are well equipped to handle an increasingly competitive workforce.
Works Cited

[1] Edwards, Kathryn Anne and Alexander Hertel-Fernandez. “Paving the Way

through Paid Internships: A Proposal to Expand Educational and Economic OpportunitiesFor Low-Income College Students.” Demos. 2010. Accessed  November 21, 2014.

[2] Keleher, Christopher. “The Perils of Unpaid Internships.” Illinois Bar Journal. December 2013. Accessed November 5, 2014.

[3] Keleher, Christopher

[4] Weissmann, Jordan. “How Bad Is the Job Market for the College Class of 2014?” Slate. 2014. Accessed November 8, 2014.

[5] Keleher, Christopher

[6] Keleher, Christopher

[7] Spitznagel, Eric. “Unpaid-Intern Lawsuits Explained.” Businessweek. June 27, 2013. Accessed November 8, 2014.

[8] Greenhouse, Steven. “Judge Rules That Movie Studio Should Have Been Paying Interns.” The New York Times. June 11, 2013. Accessed October 22, 2014.

[9] “Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.” U.S. Department of Labor Wage and Hour Division. April 2010. Accessed October 22, 2014.

[10] Spitznagel, Eric.

[11] Mikva, Keren. “Richest Nonprofits In The World.” AFK insider. October 4, 2013. Accessed November 23, 2014.

[12] Cinquegrani, Gayle. “Private Sector Firms Generally Should Pay Interns at Least Minimum Wage, Lawyers Say.” Bloomberg BNA. June 2, 2014. Accessed November 23, 2014.

[13] Cinquegrani, Gayle.

[14] Horn, Dan. “Working for free: Unpaid interns struggle, fight back.” Cincinnati.com. May 7, 2014. Accessed November 23, 2014.

[15] Horn, Dan.

[16] Perlin, Ross. “Unpaid Interns: Silent No More.” The New York Times. July 20, 2013. Accessed October 22, 2014.

[17] Thompson, Derek. “Unpaid Internships: Bad for Students, Bad for Workers, Bad for Society.” The Atlantic. May 10,2012. Accessed November 23, 2014.

[18] Obama, Barack. “President Barack Obama’s State of the Union Address.” The White House. January 28, 2014. Accessed November 23, 2014.

[19]“Raise the Wage.” The White House. October 10, 2014. Accessed November 23, 2014.

[20] Jamieson, Dave and Sam Stein. “White House Ignores Calls To Pay Interns.” The Huffington Post. April 28, 2014. Accessed November 8, 2014.

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