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It’s Just Business: How Corporate America Made Slaves of the Young

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Posted on Aug 9, 2012

By Christian Neumeister

Companies across the nation are gleefully denying interns fair wages for their work, in flagrant violation of long-standing labor law, and have the nerve to tell the world they are doing these people a favor.

Huge numbers of college students and recent graduates in a tight labor market are too scared to ask for compensation. Consequently, many interns must work for years in unpaid positions to build their résumés while depending on their parents for financial support. Not only do unpaid internships stop some from paying down a collectively exploding student debt, they compound the economical class differences between those who can afford to work for free and those who can’t.

This exploitative practice has evolved over the generations since the passage of the Fair Labor Standards Act in 1938 and a 1947 Supreme Court ruling about railroad trainees that officially defined unpaid internships; that ruling was mostly ignored by businesses, and today’s systemic abuse of interns eventually developed.

Now, a disturbing percentage of U.S. companies accepts as routine the illegal work of unpaid interns. One of the legal challenges to the abuse is a class-action lawsuit against the Hearst Corp. being pressed by the New York employment law firm Outten & Golden on behalf of interns who claim they were improperly denied wages and benefits at 19 of Hearst’s magazines. The law firm is pursuing two other corporations on similar grounds, Fox Searchlight and television’s “The Charlie Rose Show.”

In the suit against Hearst, the principal complainant, a former intern at Harper’s Bazaar, says she often worked 40 hours a week without pay or benefits. Hearst’s lawyers maintain that the corporation can lose in the proceeding only if the court reads the law in “a novel and rigid way.”

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The corporation’s lawyers, by in effect admitting that a “rigid” reading of the law could vindicate the interns’ charges, suggest there is validity to the widespread charges that the letter of the law is being ignored in the American marketplace. Indeed, any objective analysis of unpaid internships in the U.S. points to illegal exploitation not only in the journalism industry but in almost every other business sector as well.

This prevailing, callous attitude toward interns was affirmed in a July 11 article in Forbes—Kate Harrison’s “Why Interns Are Your New Best Friends,” which offers tips on how businesses can best use interns. However welcome those tips may be to companies, the Forbes piece fails to address the basic issues that afflict unpaid internships.

Interns, few of whom receive a paycheck or benefits, can be found performing a wide variety of duties, including data entry, filing, writing copy and running social media campaigns. The use of interns for such tasks was popularized in the fashion and telecommunications industries and has since spread to nearly every other area of business. These unpaid workers are desperate to make industry contacts and build their résumés, and fear of creating a bad name for themselves usually keeps them from complaining about how they are treated.

Because of the informality of the arrangement, statistics about U.S. internships are sparse. The Department of Labor estimates that between 1 million and 2 million Americans work as interns, and Robin Richards, the CEO of Internships.com, says that only about 34 percent of those listed on his website are paid. Statistics compiled by Business Insider indicate that 75 percent of students at four-year colleges have had an internship and that corporations save almost $2 billion each year through internships.

The reality is that interns perform many important day-to-day corporate operations, especially the most monotonous work. One summer intern contacted by Truthdig left a major human rights advocacy group after just a week when she realized she would be performing only “mundane tasks such as editing grammar mistakes for papers, running errands for the boss and waiting on others everyday.” “I wanted an internship that can heighten my skills, not simply buying groceries for a wine and cheese party,” she said in an email interview.

The prevalence of unpaid internships means that the usual employment path for service workers has disappeared. Gone are the days when young workers could walk from their college graduation into an entry-level position in a mailroom or running copy at a small newspaper. Now, a graduate’s career may hang on landing an impressive internship through the connections of relatives, friends or former teachers. It may take years of internships before a person can find a paid position with career potential. In the meantime, homeownership—a major part of the economic engine—and marriage may have to be delayed. Unpaid internships ultimately work to the detriment of both the interns and the overall economy.

* * *

The most fundamental question in a discussion of any economic practice should be its legal status. Companies, interns, governments, universities and their respective lawyers differ widely in their interpretations of laws and rules related to internships. The Forbes article makes a great show of explaining the legal distinction between paid and unpaid internships. Harrison, after citing six criteria of the Labor Department for companies’ use of unpaid interns, notes that the federal government requires that any intern who produces “immediate advantage” to an employer be paid at least the legal minimum wage. “In other words,” she writes, “if you want interns to do data entry and coffee fetching, you’d better offer them minimum wage.”


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