Unpaid Interns, Complicit Colleges

April 5, 2011

Ross Perlin wrote an op-ed in the New York Times to denounce the complicity of US colleges in encouraging the practice of unfair internships. I have few problems with the argument since it is indeed scandalous that anyone should support such an unfair practice (except Fox Business that hilariously suggests to use those parental connections!).

The op-ed made it to the top of the most emailed articles from the New York Times and has inspired a few reactions on the web. I chose to respond to a blog post by Marc F. Bellemare, Assistant Professor of Public Policy and Economics at Duke University, where he argues that Ross Perlin’s “crusade” is misguided. You probably better have a look at his argument first if you want to understand my response.

You deserve praise for attracting some more attention to the issue raised by Ross Perlin in his op-ed, but I’m afraid that you did not make a convincing argument against his case.

You’re right to point at the group think fallacy in Ross’ (pointless) argument about the perceived political bent of US colleges. This makes it all the more disappointing that you should try to justify the practice because it dates back to the Middle Ages. Are there many other practices that you would like to justify on that basis? Following your own link, it is called a traditional wisdom fallacy.

You rightly point that new entrants on the job market contribute less and deserve a lower pay, but you overestimate the cost. The system of pay raises already takes into account the fact that a less experienced employee is likely to contribute less and hence is paid less. Are you suggesting that new entrants contribute zero to their employer? That they are paid for their experience rather than their contribution to a company? Are you suggesting that certain unions are right to put seniority ahead of performance?

Also, you would be right to suggest that it would be ridiculous to ban unpaid internships (“(…) banning unpaid internships, as Mr. Perlin suggests, is still not the way to go.”) but Ross never suggests this. He rather says that the practice has long exceeded the limits of the Fair Labor Standards Act of 1947 and that credits are a fig leaf for an exploitative practice.  Here, you commit a “straw man fallacy” by attributing him an easily refuted argument.

The problem is “unfair internships” whereby an entry-level employee goes without pay just because it is slapped with the title “intern” — regardless of its actual responsibilities, obligations and contribution. Long live the unpaid internships whereby an intern receives proper supervision and training. But this is not what Ross Perlin has witnessed and is reporting upon. In fact, he says that unpaid internships are just fine “if the college plays a central role in securing the internship and making it a substantive academic experience.” He is criticizing the rise of an unfair practice whereby employers take advantage of a weak segment of the workforce, now with the complicity of colleges.

Later, you say: “To see why, suppose we were to ban unpaid internships starting this year. Once employers have to pay for their interns, there will be a considerable drop in the number of internships are available. That is the direct effect of a ban on unpaid internships.” May that happen sooner than later. The existence of a practice and even its benefits does not justify it if the costs are greater. Should we lift speed limits, we’ll gain time and excitement at the price of safety and efficiency, so we don’t. But to revert to economics, what we have here is a collective action problem and it is the reason why it’s regulated against. The new entrants on the job market have little bargaining power, since they don’t yet belong to a collective bargaining arrangement and compete against each other, nor do they have a “signal” from the job market to prove their worth. The reason why unfair internships are already illegal (cf. FLSA, 1947) is to avoid this race to the bottom where workers are forced to give up even their pay to enter the job market, or have started to pay to work, as Ross demonstrates. When no one can do it, the playing field is leveled and no paid jobs are lost. Some may even be created as these companies would hire entry-level staff to perform those same tasks, stripped of their capacity to exploit the oversupply of labor.

Lastly, two quibbles. (1) You are right that taking an unfair internship is a form of signaling. I don’t see how it justifies it. You are descriptive, but stop short of making an argument to defend the practice. Unless you are concerned for employers who won’t be able to discern from GPA, extracurricular activities, interviews and tests which are the valuable candidates? (2) Your concern at the thought that we will create a generational rift if we enforce the ban on unfair internships (again, there is no ban on unpaid internships and Ross is not suggesting one) is very noble, but a bit thin. You correctly point to a path dependency problem. Are we stuck with this unfair and illegal practice just because we started? Is it clear that the new cohorts will lose more from missing on exploitative work experience than they would from having a fairer job market welcome them?

The “crusade” (the straw man, again!) is one for law enforcement to correct an unfair situation whereby the weak are exploited. The complicity of colleges deserves to be denounced, as Ross did.

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BBC Should End Unpaid Work Experience

July 25, 2010

Wow, get that: Andy Durham, the British Secretary of State for Culture, Media and Sports (and Miscellaneous?) criticized the BBC for taking unpaid staff in actual jobs, what we call here unfair internships:

“There are young people working within the BBC for long periods without pay. This is not fair to them, but more importantly it excludes many others who simply don’t have the means to support themselves,” said Mr Burnham. “We look to our national broadcaster to set a better example and not take advantage of the desire of young people to work within the media. The BBC needs to show leadership and put an end to this practice immediately.”

Well said! Now that’s courageous!

Oh, wait…

He’s no longer in power.


Young, Educated and Unpaid

July 22, 2010

Jett Wells: “I’m an unpaid intern who made a short documentary about unpaid internships.”

You can find it below and on the Huffington Post where Jett, the son of a film critic, has 20 entries, apparently all unpaid. At least, they let him publish this piece. When will the media realize that they need to lead by example? Or that they can’t be neutral on an issue from which they benefit so much?

“the amount (sic) of interns and companies that employ interns who turned down the opportunity to talk to me because they were afraid was remarkable. When did unpaid internships become the norm, and why? That’s what I wanted to get to the bottom of.”

I’m not sure that the video accomplishes this goal, but naming the companies that refused to talk to him would already have been quite informative. What’s so embarrassing? It’s legal and moral, right? Interns do it voluntarily after all, so what is there to hide?


Adam Smith (Institute) weighs in on unfair internships

April 29, 2010

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?


The insidious rise in unpaid internships can run afoul of federal guidelines

March 29, 2010

Steve Duin, at The Oregonian, gets it right when he points out that the media isn’t supposed to hire staff for free. A good quote:

[Interns] don’t know that being trained for a job at their own expense has been “illegal forever,” to quote Oregon’s former labor commissioner, Jack Roberts.

Most interestingly, Steve Duin refers to successful court cases against unfair internships:

Roberts and Oregon’s Bureau of Labor and Industries could point me to only three successful wage claims for bogus internships, against Centron Solar, Design for Home and Cart De Frisco International Inc., a food-cart operation.

It is a rare occurrence, so let’s see if we can find out more details.


UK: The trade unions enter the fight

March 25, 2010

Today, the Trades Union Congress (TUC) is launching a website called “Right for interns“.

This Rights for Interns website provides information and advice on the rights interns should expect, allows them to share their experiences and explains the benefits of joining a union.

It is about time that a union make a systematic effort to reach out to interns. They seem to understand that:

There’s a real head of steam on this issue now.  Some might argue this is well overdue.  There’s still a mindset out there that thinks that interns working for free is just a normal part of working life.  We need to work together to change this.

It is in the interest of the unions since their next generation of members is facing this problem. Its source is also the same that lead to the creation of unions: a collective action problem. Interns have no bargaining power as their are competing against each other. This experience can teach them the value of collective bargaining.

The website has a neat section on the rights of interns that explains why the title “intern” does not allow to underpay an employee. And they have a sort of survey, for which I hope that they will release some data later – go fill it if you’re in the UK.

Welcome to the fight, TUC.


Interns angry at being ‘exploited’

February 22, 2010

Excellent piece on BBC news on the situation of unfair internships in the UK, with a nice mention of Interns Anonymous. They have some surprising statistics such as 90% of students work for free and 60% say the experience is not beneficial, according to a survey from the University of Westminster that we couldn’t find…