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Unpaid Labor Illegal? In America?

[ 32 ] April 3, 2010 |

Damn. And just when LGM was thinking about offering an unpaid internship:

With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.

Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.

Good on ‘em. Let’s be clear; the unpaid internship effectively excludes a wide socioeconomic swath from gaining useful experience and making effective connections in business, government, and NGOs. For example, it was utterly impossible for me to even consider an unpaid internship as an undergraduate; paying the bills was difficult even with loans and full time work. Lots of young people lack significant parental support, and require minimum payment to have any hope of making ends meet. Moreover, even for those with support the “payment” for unpaid internships (connections, experience, and recommendations) often has no lasting effect on the intern’s job prospects. If you’ve ever wondered why DC NGOs and journalistic organizations are dominated by Ivy Leaguers, it ain’t just because they’re smart.

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Comments (32)

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  1. Jay says:

    The center I work for gives academic and counseling support to first-generation, low income college students. Many don’t even consider unpaid internships an option b/c of the financial strain (nor was it an option for me), many more have turned down opportunities that they have been awarded.

    One of the more under appreciated aspects of this problem is that more and more majors are requiring an internship as part of the graduation requirements. If I had such a requirement when I was an undergrad, I don’t know what I would have done.

  2. eric says:

    It’s about time someone gave attention to this issue. Biggest employment scam since “independent contractors”.

  3. To me, the most startling thing about it was the pictures. They made it clear that even attractive white women were being victimized!!!!!

  4. DocAmazing says:

    About thirteen years ago, The Baffler had an issue called Interns Built the Pyramids and addressed this issue somewhat. Naturally, not a damn thing’s changed in that time.

  5. Erik Loomis says:

    But wait–if I listen to my students, America is an equal meritocracy where if hard work=success. Are you telling me the rich have unfair advantages?

  6. rm says:

    “just”??

  7. Amanda in the South Bay says:

    I had this problem last year; I was offered an unpaid internship in San Francisco, and I live in Mountain View (about a 45 minute train ride away). It was pretty much everything I wanted in an internship, except I couldn’t fit in my budget just to take Caltrain(public transportation) there. I mean, if only they would’ve subsidized travel costs, I’d have been cool with that.

    I understand that there may be non-profits, etc that can’t genuinely afford to pay their interns. Other companies, though, are stingy fuckwads.

  8. dsn says:

    As an Engineer, I was shocked to find out that unpaid internships existed. Most of my classmates would have considered something that paid less than 40K annualized underpaid.

  9. Rob says:

    Next can they get after the classifying of any job possible as salaried?

  10. cate says:

    I hate to rag on my own discipline, but communication is the WORST in terms of their embrace of unpaid internships. I’m not sure to what extent other fields require their students to take an internship, but it’s been the norm for all the comm departments in which I’ve worked/studied. The justification is always the same–it’s important work experience, the only way to get your foot in the door…so our orange BMW driving trust funders spend a parent-subsidized summer getting assholes coffee in Manhattan while students working to pay their way through school or to support a family will usually take a second job just so that they can ALSO work without pay. Sorry for the rant–this has been a hobby-horse of mine for years, but there seems to be very little incentive to change the system on the academic side because parents expect their children to have access to “opportunities for real world experience.”

  11. shannon says:

    I thought everyone knew that unpaid internships were just a way to get free labor. Huh, I guess.

  12. Tyro says:

    If you cannot afford to do an unpaid internship, then that field is probably a bad one in terms of economic mobility. Seriously, which field is a good one for getting ahead economically that is known for requiring unpaid internships to get your foot in the door?

    If you are lower middle class and want to get ahead economically, I’m tempted to say that entering the fashion, music, journalism, or writing industry probably isn’t a good idea. Now, unpaid internships are certainly unfair in terms of attracting people of diverse economic backgrounds, but to the best of my knowledge, a career in health care, law, accounting, or engineering does not require an unpaid internship just to get employers to pay attention to you.

    But, hey, for some people, it’s their lifelong dream to land a poorly paid job in the non profit industry, and they’ll find all the unpaid internships they can for any underfunded, exploitative non-profit willing to hire them.

    • Smith says:

      So only the upper middle class and beyond should have access to a wide swath of interesting, rewarding, jobs. Check.

      I grew up poor and work in one of those fields, and I love it. I don’t make a lot of money, but it pays the bills and keeps me happy. One of the nice things about growing up poor is that unlike many of my co-workers, I don’t feel deprived and resentful about having to live on my modest salary.

      • Tyro says:

        I am concerned about economic mobility of the middle and lower classes as well as ensuring that there are a diverse set of voices available to be heard from within journalism and politics. The fact that it might be difficult
        for someone outside the upper middle class and above to get a job for some likely-redundant underfunded non-profit or in the fashion industry which exploits its talent pool isn’t a big concern priority of mine: those outside the upper middle class should have the smarts to stay away from that kind of thing. The concern is economic mobility and access to a voice in the public sphere. Yeah, it’s kind of a douche move to expect full time unpaid labor to “break in” to a crappy paying industry, but people screwed over by a system should take responsibility and avoid those situations.

        I hope the Feds do crack down on this proliferation of unpaid internships, on principle, but I wish that people would male more of an effort to vote with their feet against these arrangements. Under the circumstances, though, i think the best we can hope for is that the Feds basically eliminate thousands of “internship” opportunities so that people never end up stuck in these exploitative situations to begin with.

        • Smith says:

          those outside the upper middle class should have the smarts to stay away from that kind of thing

          Your concern for my well-being is touchinng, but ultimately, I prefer to find a way to subsist on a wage in the low 30′s and do something interesting, rewarding and enjoyable, than worry about making lots of money doing something incredibly boring. You don’t seem to contemplate someone who grew up poor is capable of this calculus, but it’s true.

          Ultimately, we agree: a) good for the feds, and b) this isn’t the biggest deal in the world. At the end of the day, this would be a stupidly trivial thing to argue about. But the surety with which proclaim to know which career choices are best for poor people comes across pretty ugly.

          • bbk says:

            I disagree with your claim that being exploited is interesting or rewarding. I also disagree that well paying jobs in engineering, health care, law, etc., are boring.

            Both of these claims are your personal opinion and a pretty subversive opinion when it comes to the betterment of those from lower economic spheres. I hope that you care enough about your own kids to push them to do well enough in school to pursue the rigorous academic disciplines that are just out of reach for many of the students who end up looking for jobs in fashion, film, and journalism.

            • Smith says:

              I disagree with your claim that being exploited is interesting or rewarding. I also disagree that well paying jobs in engineering, health care, law, etc., are boring
              I make enough money (32K a year) to live a more comfortable material existence than 98% of the people who have ever lived, and at least 85% of the currently living. Partly due to my experience of living in actual poverty, I have a number of resources and skills my upper middle class colleagues do not for living comfortably on this income. I am, in a Marxist sense, “exploited”, as are engineers, middle managers, salespeople, and many others making 2-10 times (or more) as much. The “interesting and rewarding” features of my job are a description of the actual tasks that occupy my 40 hours, not their relation to the salary.

              Would I like more money? Sure. But the money’s enough to pay for what I need and a fair amount of what I like, so I really don’t care. Any sense in which my employer is exploiting me by paying that wage is an injustice too abstract to trouble me.

              As to disagreeing that engineering is boring, of course it’s all a matter of taste, as you say–that was my point. That was kind of my point–people who grow up poor are capable of setting priorities that don’t fit with Tyro’s image of what poor people’s priorities are supposed to be. I like his vision of a more economically mobile society, too, I just don’t feel compelled to do something I dislike all day to get money I don’t really need or care much about in order get to that world.

              I hope that you care enough about your own kids to push them to do well enough in school to pursue the rigorous academic disciplines that are just out of reach for many of the students who end up looking for jobs in fashion, film, and journalism.

              My hope is that my children will have the opportuntity to pursue what they want, and make their own informed decisions about what’s important to them. I won’t be making them pawns in a game of class warfare; my sincere hope is that their decisions on the sacrifices they’re willing to make for their chosen career will be their own.

              • Tyro says:

                Fair point, Smith. Really, while I see the advantages of getting rid of unpaid internships and encouraging more people in the middle class and below to have access to politics and journalism (and thus more of a voice in these fields), both of which rely on these unpaid internship systems, if paid internships allow more people access to other fields, that’s really their own decision to make, and if this move helps them to, then good.

  13. As I pointed out over on Yglesias’ blog, it’s also a big subsidy to businesses and other institutions.

    There were about 100,000 internships in the U.S in 2005 and half of them were unpaid. Now, output per worker in 2005 was $93.5k per year. That’s a potential maximum of $9.35 billion in free labor that businesses and other institutions get.

    Granted, interns are entry-level workers trying to acquire skills which they generally lack because they’re just starting out and haven’t finished their educations, but even if we slice away at that figure, assuming that interns are only 1/10th as productive as your average worker, you’re still looking at $1 billion a year – based on 2005 figures. I’m willing to guess that the number of internships have increased in the last 5 years.

    • strategichamlet says:

      “but even if we slice away at that figure, assuming that interns are only 1/10th as productive as your average worker”

      In a lot of fields I’d suspect that interns actually provide negative work. If they could just be productive without supervision they wouldn’t be fetching coffee. Many people will say that new workers at their place of business are a net liability for the first 6 months, so what do you do with someone you know will only be there for 3?

      • strategichamlet says:

        By the way, I should add that I agree that for profit companies should pay interns at least the minimum wage (I could see having an exception for non-profits). I merely found the above argument kind of bogus.

        • McBiggins says:

          I have to agree with your take. I mentored more than a dozen interns in grad school, and I found them to require an incredible amount of time that could have been better spent on my research and dissertation. Each internship was around 10 weeks long, and if I were being charitable I would estimate that I got about 3 days worth of productivity out of that time — which meant that I had to make headway on my own research during the other 40 hours per week that I spent in the lab. One could argue that time spent mentoring was good experience for a future professor, but everyone knows that teaching is just a necessary evil for research professors, and our real purpose is bringing in research grant money for our institutions.

  14. NBarnes says:

    I’d tend to lump this in with the generally incredibly sorry state of US labor law and the incredible imbalance in the labormanagement power relationship. So far as I can tell, the NLRB is the only thing standing between us and the reinstitution of chattel slavery on the behalf of businesses; I’d say that I exaggerate, but the idea that the laborer is worthy of their hire seems totally lost on the current generation of labor-relations conservatives.

  15. mds says:

    Are you telling me the rich have unfair advantages?

    Yup. That’s guaranteed in the Constitution somewhere, right next to the part that makes the Census illegal, and before the section that forbids the federal government from imposing taxes or regulating interstate commerce when health insurance is involved.

    And it totally sucks. I’d love to be able to afford the unpaid internship needed to jumpstart my career. If only there were some way I could change my life, get the shitty tons of money.

  16. Karen says:

    I’m not sure why anyone would exempt non-profits. If unpaid internships are exploitative, why should the tax status of the employer matter at all?

  17. [...] Robert Farley at Lawyers Guns and Money also commented on how unpaid internships guarantee that government, business and organizations will be able to draw from the Ivy League almost exclusively, because only Ivy Leaguers can afford to spend months at a time working without a paycheck. [...]

  18. Anonymous says:

    This is what happens when you eliminate the possibility for a training wage. Companies have as much trouble finding good workers as workers do finding good jobs. Internships and training wages are a great opportunity for both to check each other out without a deep initial investment or commitment. But gov’t just keeps stirring the pot. Every rise in minimum wage has resulted in a jump in unemployment, especially among the groups with high unemployment to begin with. Now they’re going to start messing with internships? Government refuses to learn that market laws are no different than physics: they *cannot* be legislated away.

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