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Stop Working for Free: How Unpaid Internships Exploit Labor, Divide Classes, and Rig the Economy

Julien Balbotin/The Varsity

I have held myriad jobs in my lifetime; some fulfilling, some grueling, many forgettable. The common denominator among nearly all: pay. We work for money. We in turn use that money to purchase shelter, food, and clothing. That’s how things work — that’s the gist of an economic system. But let us examine several exceptions and contradictions to this model.

For one, we are well aware of how biases toward gender, race, attractiveness and weight unfairly play out come payday. Add to this the unpaid labor women are often expected endure. Then there’s the abysmal instability of tipped work and freelancing. And how about employees misclassified as independent contractors? This is an issue strippers know well, but professional cleaners, seasonal workers, contracted consultants, and home care providers are also frequently misclassified, losing rights to workman’s comp., unemployment benefits, overtime pay, and the ability to sue for discrimination. And all of this exploitation rides on the back of an economy propped up by forced prison labor, or, to be completely accurate: slavery.

These persistent forms of labor exploitation disproportionately affect women, people of color, immigrants and the transgender community. Overwhelmingly, the American labor market demonstrates that the highest pay is awarded to white men, and that poverty wages tied to less desirable work go to marginalized and oppressed people. But, there exists another abused and depreciated group: those new to the labor force. College degree in hand, recent graduates seemingly have everything going for them, save experience. Thus enters: the internship.

Exploited Labor
One of the more insidious exploitations of workers arrives to us in the innocuous packaging of an internship. Internships are modeled off of the Medieval guild system, wherein a master craftsman imparts the skills and standards of their trade to an apprentice. In the US, internships began in the 1960s, but proliferated in the 1980s. Dangled before college students, recent graduates and anyone trying to get a foot in the door, internships — many of which unpaid — boast experience and the allure of future employment.

Unpaid internships are common in both the private and public sector. According to research from The Economist, “between 20,000 and 40,000 interns work in Washington’s government departments, lobbyists, non-profit groups and firms.” And that’s just in the District*. By way of the National Association of Colleges and Employers’ (NACE) Class of 2016 Student Survey Report, which focused on 5,601 bachelor’s degree students who graduated during the 2015–16 academic school year: “More than 56 percent of graduating seniors reported taking part in at least one internship. Of those, 56 percent were paid, while 44 percent were unpaid.” The NACE report also notes that 72% of these students who worked unpaid internships earned college credit.

In grad school, I had the privilege of paying for my labor. To the tune of $3000, I received school credit in exchange for an unpaid internship at the Brooklyn Museum. Like, I suspect, most college/employer arrangements of this type, mine had no oversight or reporting process to ensure that I was, well, learning something.

Brooklyn Museum: site of author’s year of unpaid labor

Learning something, as it happens, is one of the conditions on which an internship may be unpaid in accordance with the Fair Labor Standards Act. All six of the following criteria must be met:

  • 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
  • The internship experience is for the benefit of the intern
  • The intern does not displace regular employees, but works under close supervision of existing staff
  • 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
  • The intern is not necessarily entitled to a job at the conclusion of the internship
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

Closely analyzed, then applied to any given for-profit business motivated to recruit interns, it’s difficult to argue that any unpaid internship is legal (jurisprudence, meanwhile, will need some time to suss this out). In fact, an excellent article via the Foundation for Economic Justice plainly states just as much: every unpaid internship is illegal.

from Last Real Indians

Class Divide
Legality aside — because breaking labor laws is de rigueur in the US — there can be conspicuous benefits to working for free. For someone with a financially supportive family, internships can be extremely lucrative. A financially independent intern has the ability to network and schmooze, gaining valuable experience and connections, unencumbered by the worry of paying rent and affording groceries.

In fact, one could argue that unpaid internships are designed to favor the offspring of the upperclass. An internship, states Charles Murray in a New York Times Op-Ed, “amounts to career assistance for rich, smart children.” It goes on to say: “Internships pave the way for children to move seamlessly from their privileged upbringings to privileged careers without ever holding a job that is boring or physically demanding.” And as already covered, such boring and physically demanding jobs are conducted by marginalized people, further impacted by the underpayment and exploitation associated with such jobs.

What’s more, the inference and growing indication that internships are a necessary step for one’s career not only discourages lower income job seekers from pursuing such positions, it stops many at the gate. As an Alternet article focused on the inherent inequality of internships proposes:

Internships have largely eradicated the possibility of breaking into the white-collar world through a salaried position, and internship culture has become a source of class division, favoring the privileged, pressuring others into financial sacrifices, and excluding others altogether.

The implication here is that high-paying, high profile careers that begin as internships are reserved for those who can break in at the ground level on the tab of their monied parents.

Met with their own stark class divide in Great Britain, a Guardian article asks: “Why should fashion, media, finance and politics be reserved for the middle-class teenagers and 20-somethings who can afford not to earn a wage?” Indeed, why? And perhaps the great matter, the culturally ominous question is: what happens to these industries and those who consume their output when they’re staffed with a privileged, homogenized pool of society?

Koren Shadmi/The New York Times

The Economy
Faced with the vast scope of under- and unpaid labor, one might ponder the true health of the American economy. Since February 2010, when companies began hiring in the wake of the Global Financial Crisis, private employers have added 16.8 million jobs to their payrolls at an average of 190,000 jobs a month. But based on a National Employment Law Project report from 2014,

Today there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.

This trend indicates an uncomfortable reality for many workers today, and future paychecks aren’t much brighter. The US Bureau of Labor Statistics (BLS) projects that between 2014 and 2024, over 80 percent of all new non-managerial, non professional jobs will pay in the low income range of below $32,390 a year. Bottom line: the majority of jobs created in the post-recession economy pay poorly, and there’s indication that they will remain that way.

Internships are counted among the 22 million “precarious jobs,” which encompass temp agency work, short-term contracts, on-call jobs, so-called independent contracting, and involuntary part-time work. In a May 2017 press release from Career Builder, survey responses from 2,587 full-time employers report that 41% plan on hiring seasonal workers this summer. And while Career Builder does not explicitly call these summer jobs “internships,” it can be inferred.

Economist Guy Standing popularized the term “precariat,” a portmanteau of “precarious” and “proletariat,” which manifested in the wake of neoliberal economic policy and a global economy that increasingly demands worker flexibility. Precarious work was 15.5% of the overall workforce in 2005 (more recent BLS data is unavailable), and workers seeking internships are uniquely situated to fall prey to such unstable employment. As Madeleine Schwartz in Dissent Magazine puts it: “The intern’s obscurity and uncertainty characterize a labor force that has grown more contingent, relying on part-time, unstable, and insecure work.”

So just how much money is siphoned from unpaid interns and other exploited laborers? Consider this case study: those caring for family members with Alzheimer’s Disease. In 2014, Americans provided close to 18 billions hours of unpaid labor — an estimated $218 billion. One year, one disease, $218 billion collectively lost. Or envisage women as a mobilized and fairly paid group: according to the McKinsey Global Institute, such advances could add $12 trillion to the global GDP. But the fact of the matter is that there are no quick numbers or accurate data on the price of exploited labor — employers tend not to self-report broken laws.

What we do know, however, is that unpaid labor means unpaid taxes, both by the employer and the employee. Less tax money to go around means less public services like repaired roads, food assistance programs, and, tragically, unemployment benefits**. So not only do unpaid interns displace paid workers, they also keep money out of the pool of unemployment benefits. But it gets worse. According to Investopedia:

Unpaid internships contribute to recessions as well as are triggered by them. Tough economic conditions with an economy experiencing cyclical and structural unemployment make interns flock to unpaid internships in hopes of transitioning to a full-time paid job. At the same time, an increased supply of free labor tends to displace full-time workers and increase unemployment, which contributes to worsening economic conditions and failing to reach one of the macroeconomic goals of full employment.

The game is clearly rigged. Furthermore, there’s damning evidence to the contrary that gaining unpaid experience leads to meaningful work. NACE data reveals that at for-profit companies, only 44% of unpaid interns receive job offers, versus 72% of paid interns. Says Madeline Farber for Fortune, students’ job offer odds are actually 3% higher without internship experience when competing against those who took unpaid internships at state and local government agencies. It’s clear that unpaid internships are a self-fulfilling prophecy: offer oneself as free labor, and ensure that paying jobs will be scarce. (Anecdotally, I can affirm this: my Brooklyn Museum internship never led to a paid position.)

A Better Way
What many seeking meaningful employment may not realize is that demand for labor is incredibly high right now. According to the BLS’s June job openings and labor turnover survey (aka JOLTS) report, April data revealed there were 6.04 million job openings in the US. At this time last year, there were 5.64 million jobs open, indicating that the labor market is tightening.

Concurrently, the number of Americans quitting their jobs (tracked monthly by the BLS) reached a high watermark of 3.22 million in January of this year, a level that has not been reached since 2001. The quits rate, a long-term indicator of labor sentiment and the economy, has been trending steadily upward, hitting an annual rate of 25% last year. When the quits rate is high, meaning a large percent of workers are comfortable leaving their jobs and seeking better employment, it’s usually a good sign for the economy. Add to this the lowest unemployment rate in 16 years and an accelerating wage growth rate***, and the evidence is clear: it’s an employee’s market right now.

All this is to say: stop working for free.

Unpaid labor — specifically internships — are exploiting workers, deepening class divides, and propping up a precarious and ultimately self-defeating economy. And if you have the means to take an unpaid internship and do so, understand that you’re part of the problem.

This year, I began teaching a class that serves as a 101 for personal finance. The math is minimal and we do get into budgeting, but the true focus is unmasking shame and de-stigmatizing poverty and the pervasive ignorance I find many of my students share regarding their financial wellness. Often I’m addressing a room of women-identified folks overwhelmed with their underwhelming income. Their unpaid internships behind them, these women are usually experts in a field or skill, but nevertheless are tapped for free services by friends and family.

When I suggest they push back on these requests by stating their hourly rate or delivering a contract, many balk. But then something peculiar and rather wonderful spreads through the room: hope. By teaching them the means to advocate for themselves, they begin to see the possibility of more respect and income, but most importantly, the power to dictate the conditions of their labor.

from Deviant Art

Understandably, when one is inexperienced and unskilled, met with the apparent status quo to toil in uncompensated servitude in order to achieve something greater than zero at some point in future, it’s difficult to seek an alternative. At this, Schwartz offers a collective building of consciousness:

Interns must make clear that their time and effort, too, have value and that value is more than the remote idea of a “networking opportunity” or one step further up a mythical career ladder. Work is not, as the internship setting would suggest, an exchange of gifts. Work is an exchange of time for money.

Refuse the exploitation of your labor. Demand something better — something paid. Truly — but only collectively — you have more power than capitalism when you put your hands in your pockets.

___________________________________________________________________
*For a who’s who of Congressional scrooges, see this report by Carlos Vera and Daniel Jenab.

**Apologies for the oversimplification here — expenditure also depends heavily on Congressional legislation and budgetary decisions. Still, the bigger the tax pool, the more money there is to allocate.

***There are, of course, exceptions to be found in the rate of wage growth. One glaring example? Internships. NACE reports that the average hourly intern’s wage at the bachelor’s degree level, currently at $17.69, has remained fairly unchanged for the past seven years. Adjusted for inflation, today’s interns are actually making less than their 2010 counterparts.