Spotted: another weak defense of unfair internships

Every now and then, some people bravely stick out their neck to defend unfair internships. The latest is Dreama Lee, from InternProfits, a website apparently dedicated to their promotion, if their welcome video is to be believed (“overworked people and unemployed youngsters; I see a win-win!”). She wrote an open letter to the New York Times, in response to their debate about unpaid internships.

The first third is an irrelevant attack on Ross Perlin’s credentials. Ross is not making an argument of authority, so I don’t see how attacking the fact that he may not be a “faculty member of an institution of higher education” among other things is of relevance.

Then, the author makes a straw man argument (we’ve seen this before): “So the solution, according to Perlin, is to end all internships.” I am not aware of anyone fighting against unfair internships that has ever made such a proposal. Yet, this is the one the author sets up to attack and discredit.

On the fact that some interns are reading Intern Nation, she thinks that the impact will be to “make the future intern feel like their internship is a waste of time and create more of an “entitlement” mentality before the Gen Y’er even steps foot into the employer’s office, further encouraging a stereotype that many Gen X and Boomers absolutely abhor.” She’s convinced that older people thinking that younger people feel “entitled” is a new thing, invented by baby boomers and Generation Y. Actually, it’s such an old and common thing that there’s a word for it: ageism. So yes older people think so and no, it’s not the fault of young people. Apparently, it’s human nature and Gen Y will likely complain about the Zs, even if they also accept to work for free.

But the crux of her argument is that internships also have advantages. That’s a funny way to put it. Who said they don’t? Seriously? This argument is not a defense of internship. Just because a phenomenon or behavior has upsides does not justify it. Speeding is great: it’ll take you there faster and it’s exciting! Why outlaw speeding! Who cares if it’s dangerous! Heck, think of how good slavery was to the economy of the South. It was thriving! Even for the slaves: a guaranteed job, housing, food and even a husband or wife sometimes. Really, with all these advantages, why were people complaining? Think of most illegal, unfair and outrageous behaviours and you’ll find anupside somewhere (robbers do gain stuff after all!). As silly as it sounds, this is how Dreama Lee is justifying exploitation of young graduates who have to accept serial unpaid jobs because they have no negotiation power.

At the end of it all, despite the snark above or the self-righteousness of the open letter, there is not so much difference between the positions of pro and anti-unfair internships. Even the author praises programs that pay interns and is keen that they interns should be learning something, much like we have nothing against real apprenticeships and support good opportunities to learn in a work environment. And I agree with her that the New York Times was not able to find one credible person to defend unpaid internships.

A debate about unfair internships

The New York Times is hosting a debate about unpaid internships (side note: I really wish having been more successful at promoting the use of “unfair internships”). So far, five people have shared their opinion, four against and one in favor. There is Ross Perlin, well-known as the author of Intern Nation, who describes the recent evolution (degradation) of internships. There is Alex Footman, who is suing Fox Searchlight for his own experience as an unpaid intern and who’s making the argument that enforcing the law is he government’s job, not his (agreed). Then, an employment attorney makes the simple point, argued here too that internships are “a valuable idea, if we follow the law”. Raphael Pope-Sussman makes the case that unions should take up the fight to enforce the law and restrict unfair internships (in the UK, the Trade Union Congress does it).

This is all good and thoughtful, but let’s look at the dissenter’s argument. David Law, founder of Above the Law (I’m not joking) makes this interesting argument:

But unpaid internships are more a symptom than a cause of economic weakness. They are so popular right now because many employers, large and small, simply don’t have the ability to create new, full-time, paid positions.

Oh, that’s what it is! The employers really, really want to pay their junior staff, they just can’t afford it! Oh well then. They should pass on the idea to all companies that are going bankrupt: stop paying your staff if you can’t afford it, it’s no big deal. David Law then caps it off with this gem:

In the end, the status quo, while imperfect and inconsistent, may not be that bad.

What he apparently does not realize is that there is no status quo: the situation is getting worse, as Ross Perlin demonstrates. Who, 20 years ago, needed to go through some 5 internships before getting a paid position?

It’s good that the New York Times take up this issue and it’s even better to see that it is so hard to find a good defense of unfair internships.

Free labour: Volunteering and Internships

I am somewhat surprised that the issue of internships vs volunteering does not come up more often in the comments. Maybe it’s because the distinction is crystal clear to most, which is a good thing. In any case, this article from the Ottawa Citizen has an excellent example of each.

Volunteering:

Recently, she signed up as volunteer co-ordinator for the Dress for Success Foundation, which trains and clothes needy women looking for work. While that takes several hours a day, she also volunteers at Goodlife Fitness’ daycare, teaches at Blessed Sacrament Church and is a skating coach for the West Carleton Hockey Association.

Unfair internship:

“A lot of shows have volunteer internships, but they’re very hard to get,” says Borer, who lived with other interns in Los Angeles and was supported by his parents during his stay.

“It’s free labour for the huge corporation, but it’s also experience for me.

“I believe that it will further my résumé, absolutely. I assume it would set me apart from other 20-year-olds who have just finished the same program. It’s a very competitive industry. So if you can do volunteer work, it’s extremely beneficial.”

Very beneficial for you and detrimental to everyone else who now has to work for free to remain competitive. That’s why there’s a law to address this collective action problem.

Now, the bad news.

Molina says those numbers appear to be shrinking because “volunteering isn’t as sexy as an internship,” which is more about getting work experience than contributing to the community.

Oh dear.

Adam Smith (Institute) weighs in on unfair internships

Liam Ward-Proud at the Adam Smith Institute (“The Adam Smith Institute is the UK’s leading innovator [NDLR: I believe this is self-assessed] of free-market economic and social policies.”) has a very engaging and articulated post (rare thing) about one of the premises behind this blog’s position, namely that interns should be paid because employers benefit from their work.

“The basic principle alluded to is completely false.”

You may be surprised to learn that I almost agree with him. Here’s my comment, in case my readership is not already reading Liam regularly.

Thank you for taking the time to review the basic principles behind worker’s wages that UnfairInternships.com puts forward. You’ve certainly refined my own thinking, as the owner of the blog, on the nature of the wages and the morality of unfair internships. What you haven’t done though is to change my view that unfair internships are unfair.

You win: “A wage is a price at which a worker is prepared to sell her/his labour, this price is defined as the equilibrium between what the employer is prepared to pay and the labourer is prepared to sell at.” Of course, you acknowledge that the expected productivity is part of the calculus, so “completely false” was a bit exaggerated. My description was incomplete.

You actually bring in an interesting principle though: the power relationship between the employee and the employer. I dare say that as long as there is unemployment out there, supply exceeds demand and this relationship is in favour of the employer. Actually, regardless of the mechanism, it is plain to see, through the spread of unfair internships, that interns are losing the race to the bottom, accepting to work without pay. This is why there are mechanisms that level the playing field by setting minimum standards and collective bargaining mechanisms. The interns are rarely, if ever, part of a collective bargaining system and, while they should, it seems that they are not yet protected by standards that protect the rest of the labour force.

Which leads us to the idea “workers should be free to value their own labour”. This is true to an extent, the limit being once the individual choices are detrimental to the group. I am not saying anywhere on my blog that unfair internships are not beneficial to the individual interns. They are as beneficial as making a personal sacrifice gives a leg up to the individual. But it also forces everyone else to make that same sacrifice to level the playing field. This competition is all good, but there are minimum standards that offset the lower bargaining power of the interns and they should be enforced for them as for the rest of the labour force.

So your argument is not in favour of unfair internships, it is one against minimum standards and bargaining power. I have no doubt that this blog believes that such standards are detrimental, but it is a debate that your side is not winning in the real world at the moment.

The idea that internships opportunities would disappear if internships had to be fair is actually a good thing. Speed would increase if speed limits were removed, robbery would increase if it wasn’t punished, etc. The idea that the mere existence of something makes it desirable rests on weak moral ground.

Once again, an honest thank you for your coverage and analysis. It was a bit snarky, but I deserve it and it’s all in good fun.

What do you think?

WSJ: Getting Logic Wrong

The Wall Street Journal editorial staff takes up unfair internships again:

The fear seems to be that dishonest employers will use unpaid interns to do the work that salaried entry-level staffers used to do. Not only does this displace jobless workers in a down economy, it also exploits the college students so desperate for work that they’ll do menial jobs for free. That’s the theory, anyway.

The reality is different, as we can both attest. Horror stories do circulate, but our much more ordinary experiences offer a reality check: In general unpaid internships end up being useful experiences—and serve several important functions in the labor market.

Did you see that? The logical jump? Theory wants that employers are replaced by unpaid interns BUT in reality internships are useful experiences.

Who said internships were not useful experience? They point themselves at a different problem, which is replacement of paid workers with free labor.

WSJ: Getting Economics Wrong

As a follow-up to the NYT article, the Wall Street Journal posted an opinion piece: what’s wrong with working for free? How unexpected of them.

What amazes me is the basic misunderstanding of economics. The idea that work should be compensated in proportion to productivity is not a socialist principle, it is at the core of capitalism. The more productive you are, the greater pay, goes the principle. If a company benefits from the work of an employee (intern), that means the employee (intern) should to be paid.

Then why aren’t they?

Because the interns have no other choice. It is not because their work is not worthy. It is not an economic decision, it is a power decision. Because the employers can.

The reason why a company pays an employee is, at the core, not because of regulation. It’s to attract the best and the brightest. Higher pay, higher talent (remember that when you hire unpaid interns). In this context, companies refuse to pay certain employees by calling them interns because they consider these employees interchangeable – not because they do not contribute to the bottom line. Young entrants in the labor market are isolated and have very little bargaining power. They compete against each other, as they should, but should be protected by minimal regulation to restrict abuse. And this is what the minimum wage laws and Fair Labor Standards Act are for.

But in a country where bankers can run their companies and the national economy into a wall and still be generously compensated (in performance bonuses, no less!), it may be a principle difficult to understand.

——

Update (April 29): The Adam Smith Blog helps me to refine the mechanisms through which wages are decided, but fails to demonstrate that unfair internships are fair.

Low-Paid Interns: The NYT Misses the Point

Disappointing article in the New York Times about the rise of “low-paid internships.” It just goes to show, once more, how such a widespread, illegal and unfair practice is ignored by the media. Thankfully, most of the readers’ comments are right on. Popular awareness is increasing. This is an issue waiting to explode.

Is It Immoral to Pay for Unpaid Internships?

Derek Thomson, over at The Atlantic, has another blog post about unpaid internships – a slightly different issue from unfair internships, as should be kept in mind. I have commented rather extensively over there so I’ll lazily re-post my comments here. His point is that it’s the fault of the college career centers if there is demand for middlemen charging to find internships.

There is a large-scale illegal use of free labor and it’s the fault of the college career services that aren’t making enough efforts to place their students unpaid internships? Well, at least it is an original explanation.

Just because there is demand doesn’t mean that it’s justified (otherwise, why legislate for anything? there’s a demand for speeding!). Students create the demand and resort to middlemen in a race to the bottom between each other to get a (paid) job. Some time ago, they would start by accepting an entry-level salary, less holidays, etc. Fair enough. A few years later, students have to do an internship to gain some experience and then get a job. Then they have to do a second another internship. Then, internships are a necessity and the competition is too high, so to get a leg up, you need to pay to get an unpaid job. Makes you wonder what’s next.

I mean: how else would it happen if it was unfair? People entering the job market are a vulnerable part of the labor market and employers are taking advantage of it. No wonder it’s illegal. Check the Fair Labor Standards Act.

Or go to http://www.UnfairInternships.com where we have been blogging about this issue for three years. It’s a scandal hidden in plain sight.

UK: I don’t feel sorry for interns

Is it just a provocation to drive traffic? Anyway, the Guardian’s Linsey Hanley is hammering on unpaid interns and reminding them that there are far worst people in the world. I say this is an excellent argument to serve to people calling the police for a robbery: “Don’t complain, it could have been worse!”

Internships are the surest way to avoid being exploited over the course of your working life.

Be exploited so that you’ll never be exploited? Go figure.

She gets very close to getting it, but no.

Without doubt, it’s an insult to graduates, who have worked hard no matter what their background, to have to work a year or two for free. But that’s not the point.

I’m afraid that is the point. This attempt to ignore the situation, to claim it is irrelevant does not excuse or erase the facts. Some people in a vulnerable segment of the workforce are being exploited because employers are taking advantage of their vulnerability. I do hope that most of them will move on to have a successful career, but it doesn’t justify pitting them against each other when they enter the labour market.

It has to be a ploy to drive traffic. And I fell for it!

Are Unpaid Internships Destroying America?

This is the provocative title of a post from Derek Thompson at the Business blog of The Atlantic. It is built around Anya Kamenetz’ article in the NYT three years ago. I’ll reproduce my comment here, which sums up arguments made over the years on this blog.

Unpaid internships are often unfair and illegal (see the Fair Labor Standards Act).

The short explanation: if you’re contributing to a company, you deserve a salary. Call it an internship, a job, a contract, an assignment – it’s all the same. If your internship is actually an apprenticeship where you’re a drain on a company that goes out of its way to train you, it’s legal.

Yes, interns gain valuable experience. But aren’t all employees benefiting from their work experience? It leads to improved productivity, pay increases and promotions. Entry-level employees already receive a lower, entry-level salary for their lower productivity.

“I do think the internships paid off, inasmuch as they led to other internships and, eventually, to jobish things.”

This illustrates well the collective action problem: some time ago you could get a job out of school, then to get a leg up, you would do an internships, then everybody does and you need two to get ahead, then everybody has two… This is where we are now. There is a law against it. It is just ignored because graduate students have little power in the job market and their internships are just a transition.

More questions are addressed at UnfairInternships.com. Thanks for talking about the issue.

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