The Business of Unpaid Internships: Responsible for Increasing the Gap between Rich and Poor (But not for long)

 

The stressful process of applying to internships comes upon students during midterm season and adds an extra layer of weight to already frail shoulders. What makes the process even more stressful is the choice of whether to apply to paid or unpaid internships. The idea of an unpaid internship seems like cruel punishment. The idea of “voluntary slavery” comes to mind when an intern is doing their job well, but no monetary benefits are offered except “experience.”  The word “experience” is gold to employees and is why they are able to have hundreds of educated, eager college students put in hours after hours of hard work for no pay.  Educated college students are willing to endure zero salary jobs in order to gain experience that will enable them to get paying jobs in the future. 

For low-income students, however, the opportunity cost of experience is too high to endure. Those who cannot afford to not be paid during a summer are locked out of unpaid internships. Their resumes become perpetually light as a result. Later on, all of the real paying jobs are only given to those who can afford to gain experience for free. This keeps the poorer students from getting the jobs and careers they deserve. The economy is still in shambles, and according to The New York Times article by Steven Greenhouse, the country is, “Confronting the worst job market in decades, many college graduates who expected to land paid jobs are turning to unpaid internships to try to get a foot in an employer’s door” (http://www.nytimes.com/2012/05/06/business/unpaid-internships-dont-always-deliver.html?pagewanted=all&_r=0).

Despite the problem of locking out the poorer students from gaining necessary experience, some of the experience that unpaid interns get may not even produce workers who have more knowledge than those who don’t take part in these internships. According to Greenhouse, “though many internships provide valuable experience, some unpaid interns complain that they do menial work and learn little, raising questions about whether these positions violate federal rules governing such programs.” But recent job reports have shown that there is no alternative for those interns: “job growth is weak, and the unemployment rate for 20- to 24-year-olds was 13.2 percent in April”(Greenhouse). Thus the unpaid internship plague is spreading to all job areas, and “they have recently spread to fashion houses, book and magazine publishers, marketing companies, public relations firms, art galleries, talent agencies — even to some law firms.” The Labor Department says that if employers do not pay their interns, the internships, “must resemble vocational education, the interns must work under close supervision, their work cannot be used as a substitute for regular employees and their work cannot be of immediate benefit to the employer.” Despite these rules, employers still take advantage of other interns with impunity.

As employers continue to take advantage of their workers, the amount of unpaid internships continues to rise. While no one keeps statistics on the amount of unpaid internships, according to an article in USA Today by Paul Davidson, it has been estimated that “there are about 1.5 million internships in the U.S. each year, and nearly half are unpaid” (http://usatoday30.usatoday.com/money/workplace/story/2012-03-07/summer-internships-paid-unpaid/53404886/1)

 However, there has been a recent development in the unpaid internship scandal that adds a new dimension to this situation.  A Federal District Court judge in New York City ruled this month, that Fox Searchlight Pictures had violated Federal and New York minimum wage laws. Specifically, two interns who had worked on the film, Black Swan, sued Fox and stated that they should have been paid based off of their experience and the amount of important work they did for the production. The court ruled in their favor and this sets the precedent that affects businesses not just in New York City, but also around the country. According to the Judge, William H. Pauley III, Fox Searchlight “should have paid two interns on the movie ‘Black Swan’ because they were essentially regular employees. This recent court case sets the groundbreaking precedent that unpaid interns cannot be abused in businesses without consequence. (http://www.nytimes.com/2013/06/12/business/judge-rules-for-interns-who-sued-fox-searchlight.html?emc=eta1&_r=0)

Due to lawsuits against employees stating that employees should have been paid for their work, such as the “Black Swan” case, many companies are determined not to run the risk of being sued and are decreasing their use of hiring unpaid interns. According to Al Robinsion, a Washington, D.C. lawyer and former acting administrator of the Labor Department’s wage and hour unit, companies are saying, “We’re not going to run the risk,””(USA Today). As stated above, unpaid internships are only legal if they meet specific criteria. Programs must provide training and benefits to interns. Thus some businesses are modifying programs by rotating inters among several departments according to Brian Dixon a labor lawyer (USA Today).

 

If internships continue to take advantage of their workers, continue to offer no pay and thus making the opportunity cost of experience too high to endure for some students, the gap between the poorer students and those that can afford to not be paid is made larger. The terrible economy is not just stopping people from getting jobs now, but preventing poorer students from getting jobs in the future.  Thus unpaid internships are an issue because the economy is weak. During and after the recession, there was an increase of unpaid internships due to employer’s tight budgets. However, due to the new and legitimate concern for business to hire unpaid interns with caution, as seen in the recent Black Swan case, it seems that the use of unpaid interns starting this year will be decreasing. There is hope to decrease this unfair gap between the rich and the poor and to decrease the abuse unpaid students face. Ironically, the future for young interns looks brighter and happier, thanks to the dark horror movie, Black Swan.

Video: http://abcnews.go.com/Business/video/black-swan-interns-win-movie-production-lawsuit-19394099

Sarah Weber

Brandeis University

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