May 17, 2013

No money, mo’ problems

Unpaid internships break the law and perpetuate inequality, but those in power aren’t complaining.

From an employer’s point of view, it is indisputable that unpaid internships make sense. The market for interns is so saturated that in order to employ a recent graduate from a premier institution all you need is an address in Manhattan. A whisper of a promise of a full-time job is all it takes to fill your inbox with competitive resumes. If you don’t have to pay, why bother, right?

Well, for one thing, if you’re a for-profit company, it’s illegal.

According to federal and state regulations, most unpaid internships for profit-making companies are illegal. However, a blind eye is turned towards them since they’re seen as relatively innocuous—a win-win situation for both intern and company. The Department of Labor has a list of six criteria that determine whether an internship for a for-profit employer is legal. Since so many of my acquaintances, some current students and even some who are graduating this spring, are eagerly accepting unpaid internships, it’s worth listing the criteria: 1) The internship is similar to training that would be given in an educational environment. 2) The experience is for the benefit of the intern (Duh! No wonder people don’t read government literature; obvious fact follows redundancy like night follows day.) 3) The intern does not replace existing employees. 4) The employer that provides the training derives no immediate advantage from the activities of the intern. 5) The intern is not necessarily entitled to a job at the conclusion of the internship. 6) The employer and the intern understand that the intern is not entitled to wages (again, fairly obvious).

Employers fail to observe these criteria to varying degrees, but all, without exception, fail to meet number four. Inevitably, unpaid interns are hired for the benefit of the firm. All unpaid internships I’ve ever heard of are designed to bring immediate advantage to the employer; therefore they are all in violation of federal and state law—but no one cares. So we’re faced with a situation where people are willing to work for a wage lower than the minimum that’s prescribed by the law, thereby undercutting the market. Where have we heard that before? Immigrant labor. An issue that gets the nation on its feet. And yet the same phenomenon is winked at when it happens to interns, even though the interns populating Brooklyn don’t even make rent money.

Industries such as publishing and entertainment are so heavily reliant on unpaid interns that they end up emphasizing class divisions. Take a publishing firm based in New York: They tend to hire only unpaid interns, and in order to survive in New York without a paying job, you need (unless you’re gutsy enough to take loans) parents willing to pay for your rent and cost of living. Consequently, the bottom rungs of publishing firms are rife with the children of the wealthy. They go on to take up most of the entry-level paid positions, since we all know criterion number five of the Department of Labor doesn’t really mean anything. And then, the people who control the printing presses and literary magazines of New York are all from rich backgrounds—and their output reflects this. Although, to be fair, when in history was this not the case?

Despite the fact that unpaid internships are illegal and an impediment to equal opportunity, no one is going to put a stop to them. The elite benefit from the current system, so why stop their children from pursuing their literary dreams when there are Californian grape harvesters to vilify? Employers are incentivized to support the system since it helps them cut costs. The only people incentivized to put an end to the divisive practice of unpaid internships are those who are not in the power nexus. However, by definition, they lack the power to do so. There’s no foreseeable way in which a mass protest could convince a Warner Bros. executive to deny an internship to his golf partner’s daughter.

Then who is responsible for putting an end to the illegal practice of unpaid internships? I believe that if we accept that unpaid internships constitute a market failure, the answer is obvious: the government. Isn’t it a market failure if the brightest students—that is, the best resources, who cannot possibly all come from the richest backgrounds—are not allocated efficiently after four years of debilitating college expenses? Instead, they’re expected to finance their own first jobs. It’s a federal duty to fix market failures such as this one, and, in this case, that’s merely a case of enforcing laws that are already in place. But, then again, the road to Capitol Hill is paved with unpaid internships, so don’t expect any action anytime soon.

Raghav Rao the beneficiary of two unpaid internships (albeit in India, where the labor laws are murkier than the Ganges).