The revolt of the unpaid intern
Fed-up interns are suing their former employers for back pay, sending shock waves across the business world and leading some companies to scrap their programs. Will this bring fairness to job training — or doom a legion of unemployed college students?
CLARKE HUMPHREY'S checking account was down to its last 82 cents. The Dorchester native was in the running for a lucrative corporate PR summer internship that would have paid and even covered her housing, but instead she opted for one of journalism's most elite opportunities: interning at Conde Nast Traveler. The glamorous magazine gig was unpaid, and unlike many of her more well-heeled peers, the Northwestern University journalism student was banking on a $3,000 Scripps Howard grant to fund her entire summer in Manhattan, bunking in an NYU dorm in Tribeca and spending the last two weeks crashing at her brother's Lower East Side apartment. After six weeks on the job, Humphrey sold her first pitched piece for publication on the magazine's website. As the newbie journalist recalls, it was a "monumental moment."
Except "selling" would be a slight misnomer.
As an unpaid intern, naturally, she received no pay.
Is 21-year-old Humphrey a savvy networker positioning herself for future success? Or a vulnerable member of a generation being exploited in a shaky economy? The answer to both could be yes. In what activists envision as a nascent social movement — and some bosses see as ungrateful whippersnappers unwilling to pay their dues — a slew of unpaid interns have filed suit against their former employers, including high-profile companies such as Fox Searchlight Pictures, Hearst Magazines, Gawker Media, NBCUniversal, Sony, and Conde Nast, claiming they were, in fact, employees under federal labor laws and demanding back pay. Some of the cases are still in progress or the sides have settled, and in a few instances the interns have lost. But in June came a federal district judge's decision that got everyone's attention: He ruled in favor of two interns who had worked on the set of the Fox Searchlight film Black Swan. That decision has set employers here and nationwide scrambling to reevaluate the legality of their own internships.
"I think we may be seeing the beginning of the end of the unpaid internship in the for-profit sector," says Ross Perlin, a New York City-based author who put a spotlight on the issue with his 2011 book Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy. "I think you're beginning to see a culture change." For now, Fox Searchlight is appealing the judge's decision, while Conde Nast made a move that surprised the business world — simply shuttering its 2014 internship program, possibly a gloomy harbinger for many.
Humphrey, who graduates in June, sympathizes with her peers bringing suit — to a point. "Unpaid internships really devalue our work," she says. "The fact that they won't pay is like a slap in the face." However, she fears these cases may end up blocking the professional path for those coming up behind her. "I knew going in it was going to be difficult financially, so I planned for that. It seems dishonest to knowingly go into an unpaid internship and then at the end decide it wasn't fair."
THE UNPAID INTERN is a longstanding figure on the bottom of the corporate ladder, particularly in so-called "glamour industries" such as media and showbiz, where multiple applicants jockey for each spot and have even been known to pay thousands of dollars for the privilege. Last summer's comedy The Internship played the competitive angle for laughs, with fortysomethings Vince Vaughn and Owen Wilson taking internships at Google, gunning for a coveted full-time job at the film's end.
But the reality isn't so funny. Perlin estimates that more than a million US students across all industries are interning each year, about one-third to one-half of them for no pay. (The Globe's interns and co-ops all receive wages, although students participating in Northwestern's Journalism Residency program earn course credit and receive a stipend from their school.) "This is a generational rite of passage," says Perlin. "We now have a massive culture of unpaid work that may have started decades ago with good intentions but has really gone off the rails. The vast amount of what goes on at for-profit employers is illegal and unethical and erodes the ethic of a fair wage for a day's work."
Nathan Parcells, San Francisco-based cofounder and chief marketing officer of the website InternMatch, is also a critic of the status quo. "Internships used to be for the hustlers. Now around 63 percent of college students do one before they graduate; it's gone up by more than threefold in the last 20 years. It's becoming almost essential before you get a first-time job." Career counselors at Boston-area universities are happy to tout the benefits: Students gain practical experience, build their resumes and networking contacts, and get to explore prospective career paths before investing years of study. But critics question whether these opportunities have turned into obligations, whether companies have pressed their advantage too far during a stagnant economy, and if students are being led down a path of serial internships going exactly nowhere.
The number of internships, both paid and unpaid, done by those who already have college degree in hand also appears to be on the rise. At the College of the Holy Cross in Worcester, for example, the number of students accepting internships after graduation has more than doubled in the last three years, from 1 percent to 2.6 percent, says Pam Ahearn, director of the school's Summer Internship Program.
"The worst infractors have no intentions to train or hire and are just looking to take advantage of free labor," says Parcells, whose site nevertheless offers listings for unpaid jobs. "People's willingness to work for free is one of the reasons that the rise in unpaid internships has happened so rapidly," says Alec Dudson, who founded the UK-based Intern magazine to spotlight the untapped talent of today's interns. "While that doesn't make them mandatory, it can often seem like that. If the industry you want to break into is awash with unpaid internships, it's hard to see another way in."
Katie Broida, a 2010 Boston University graduate, accepted three unpaid internships after college at public radio stations in Boston and her hometown of Cleveland but eventually threw in the towel to pursue a career in Web development when no steady paid radio job was forthcoming. "My whole working life after school has been during the economic bust," the 25-year-old laments. "In that context, these internships really don't make sense. What's the end game: There's no job — ever? I was happy to donate my time to a cause I believed in, but in terms of giving me skills, what will I need them for if I can't get a job?"
"Unpaid internships ought to be done away with entirely," says PR client executive Peter Mertens, 24, who accepted four unpaid internships during college before finally landing a paid one after his 2012 graduation that led to his current full-time job at Burson-Marsteller in Boston. "I felt they were mildly unjust at the time, but definitely more so now. I saw what type of work I was given as an entry-level employee and then compared it to the work I received as an intern. The work was essentially the same."
A 2013 survey by the National Association of Colleges and Employers raised questions about whether an unpaid internship provides any benefit at all. It found that, at least among those who were being recruited before graduation, 63 percent of those who had managed to snag paid internships also received at least one job offer, while only 37 percent of those who had an unpaid internship had done so — compared with 35 percent for those with no internship experience. Starting salaries of those who had completed an unpaid internship ($35,721) were actually worse than those with no internship on their resume ($37,087). The researchers said they couldn't explain these results. Could it be that students likely to accept unpaid internships are simply pursuing jobs in lower-paying fields to begin with? Or perhaps the act of accepting an unpaid internship devalues one's worth in the eyes of that employer. Contrary to the lip service of these opportunities being a resume booster, the only thing unpaid internships often lead to, as Broida found, is the offer to do . . . yet another unpaid internship.
NOT EVERY UNPAID INTERNSHIP is breaking the law. In April 2010, the US Labor Department explained what constitutes a legal unpaid internship, based on the 1938 Fair Labor Standards Act. Those at nonprofits and government agencies "are generally permissible" (the White House, for example, relies on an eager pool of full-time, unpaid interns each semester). But unpaid internships at for-profit organizations must follow six key points. For example: The intern should not be displacing any regular employee; the intern is not entitled to a job at the end; and the internship should be a training program similar to an academic setting. By requiring that interns receive school credit in lieu of wages, many employers hope to satisfy that educational requirement, although whether this is the case has not been definitely answered by the courts.
The one Labor Department guideline that legal observers say is most problematic, though, is the proviso that the employer "derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded." This perplexing language puts employers in the illogical position of claiming their interns provide them little benefit. The more useless the intern, the better (legally speaking). Sure, it's possible to conceive of a scenario where an intern truly is a detriment — a high school student shadowing a heart surgeon, peppering her with questions but providing no practical use. But for companies to claim a typical intern's tasks are of no use to them is, as one report put it, "nonsensical."
"The fact that employers are getting sued, the way the courts ruled, doesn't surprise me," says Boston employment attorney Will Hannum, managing partner at Schwartz Hannum, who advises his clients to tread carefully. "The way I've described it to clients [is] you need to pay the person — unless it's more trouble to have them around than it's worth."
"For most of the internships I'm familiar with, whether the individuals are law students providing legal research or doing Xeroxing and getting coffee, that's a contribution to that employer that would otherwise have to be done by somebody who is paid," says David Yamada, a professor at Boston's Suffolk University Law School. "That's where I draw that distinction. If they're working [in the private sector], they should get paid."
Yamada has come to view this as not just a legal but also a moral issue, informally advising a group of New York activists who have formed an intern labor-rights network. "I think in the for-profit sphere, most of these unpaid internships are not only against the law but are exploitative," he says. "We now have this intermediate stage between classroom education and entry-level full-time employment. We're adding another level of training and education that involves real work, slapping this label of 'intern' on it, and assuming one has to donate their time instead of being paid."
For those who'd tell him being an intern is a storied rite of passage, Yamada points out one key difference: the price of higher education for today's graduates. "The unpaid internship is a big dose of salt into the wound of exorbitant tuition levels," he says. "Not only are you going to borrow a boatload of money, but you have to provide a good dose of free labor to be competitive for full-time employment."
CRITICS HAVE LONG HAD a problem with the inherent elitism of the system — that it is a luxury only accessible to families with means. "This is one of the engines of inequity in America," noted Tom Landy, director of the McFarland Center at Holy Cross, during a round-table discussion on unpaid internships in October. "It is the way of the world," agreed internship director Ahearn. "If you can do an unpaid internship, and it's not going to cause you pain in the wallet, yes, those students are at an advantage." She encourages companies offering unpaid internships to at least make the post part time or flexible, so her students can supplement with paid work if necessary. Nearly 40 percent of students with unpaid internships also take on a paying job to cover expenses, according to Phil Gardner, director of the Collegiate Employment Research Institute at Michigan State University.
"While unpaid internships aren't always exploitative, the bigger issue is that they exclude those who can't afford to work for free," says Dudson, who credits his ability to found Intern magazine with skills gained during his own seven-month unpaid internship, financed by a bartending job and couch crashing. "That isn't something everyone is able to do, though, so the playing field is far from level."
Humphrey, the former Conde Nast Traveler intern, did manage to pull it off, barely. "The only reason I could do it is because I got [the Scripps Howard] grant that covered my housing," says Humphrey, a Boston Latin graduate who says she grew up in a single-parent household with three siblings. "I didn't have a lot of wiggle room. If I didn't have the grant, there's no way I could have afforded it."
Some internships not only don't come with a paycheck, they also come with a fee. For-profit internship companies such as Dream Careers guarantee an internship for students — Boston options include Charlesbridge publishing, Harvard Common Press, and AXA Equitable — provided they are able to scratch together the $8,499 price tag, which includes summer housing, meals, and transportation. Dream Careers did not respond to requests for an interview. Sites like Charitybuzz regularly auction off specialty internships unaffordable to the masses, like the $85,000 fetched to spend six weeks interning at Richard Branson's and Russell Simmons's multiple companies and foundations, or the three-month internship with film studio The Weinstein Co. that went for $36,500. And you can bet that those resumes won't broadcast that the coveted internships were purchased rather than earned.
WHAT REMAINS to be seen is how Boston-area companies will react to the Fox Searchlight judgment and other legal challenges — will they continue their unpaid internships unchanged, kill them, or offer compensation? According to the Texas-based college-recruiting consulting and research firm Intern Bridge, slightly less than 20 percent of career and internship professionals at colleges surveyed have witnessed employers withdraw their postings since the Labor Department clarified its position in 2010. "I am seeing some clients pay interns minimum wage, and a few are dropping the internships altogether," observes Hannum, the employment attorney. "There are fewer clients who are trying to continue to use unpaid internships. Some carefully dot all the i's and cross the t's, to hopefully avoid being sued. But that is a lot of work. And one or two clients are keeping their unpaid interns and just keeping their fingers crossed. Frankly, I think in the long run it may make more sense to pay a minimum wage and not worry about it. Minimum wage isn't big dollars compared to the cost of a lawsuit."
An informal survey of the Boston chapter of the Entrepreneurs' Organization produced responses across the board. "We believe that you should pay people for the work they do, no matter what their title says," says David Hauser, cofounder of Grasshopper, a Needham-based virtual phone system provider that has always offered paid internships. "This is a call to action for other companies, who more than likely can afford to pay interns, to pay everyone who does work on their behalf." But Bill Minahan, CEO of aNetworks, an IT firm in Norwell, says he will continue to offer an unpaid internship, confident that his firm meets the Labor Department's guidelines and that the value for the intern is there. "If we were forced to pay the intern," he notes, "the relationship would be different and additional expectations would have to be fulfilled." Nicholas Kho, founder of the Los Angeles-based dating coaching company Real Social Dynamics, uses 200 unpaid interns worldwide and says that "the benefits and perks we give interns surpass the monetary value of the work they're doing." Should US courts rule the practice illegal, he is blunt: "We would simply hire more interns overseas, as our interns can work remotely from anywhere."
Internship programs disappearing "may be an unintended consequence, but it's not an unpredictable consequence," says Yamada of Suffolk University. That might prove OK in the long run, he adds, if, say, four unpaid internships disappear in favor of two paid ones. Or if more entry-level jobs were created for the 6 million young people currently out of school and unemployed. As Humphrey points out: "Someone [at Conde Nast] is going to have to do what the interns are no longer doing, so they are going to have to pay people. That makes me question why they won't just pay interns."
CONSPICUOUSLY SILENT on the matter are colleges, which seem to be walking a tightrope between wanting to advocate for their students but benefiting from the current system. Schools often grant credits to and collect tuition money from students interning off-site who are not using campus resources. In April 2010, shortly after the Labor Department issued its guidelines on fair labor laws regarding interns, 13 university presidents, including Joseph Aoun of Northeastern and Robert Brown of Boston University, wrote to US Labor Secretary Hilda Solis, asking her to go easy on regulation efforts for unpaid internships. "It's a real ethical dilemma," Yamada says. "I think it's wrong for higher education institutions to be charging tuition money for the time that students are performing these farmed-out external internships."
Mertens, the PR employee, believes more responsibility needs to fall on colleges to protect their students. "I found three of my four [unpaid] internships on my school's job website, the first place any college student looks," Mertens observes. "If colleges were to stop posting unpaid internships and only posted paid internships, these companies would realize that they cannot keep cashing in on free labor as their talent pools dry up."
Career counselors at several area colleges say that for now they will continue to post unpaid internships and let students decide. Kimberly DelGizzo, director of Boston University's Center for Career Development, says her group makes sure for-profit employers who post internships are aware of the Labor Department's guidelines. "Personally, I think all for-profit organizations should be paying their interns. Most students, instead of being outraged, say, 'This is reality.' "
That perfectly characterizes the tepid response in Boston, where this issue is no Occupy Wall Street — yet. Students here have not filed lawsuits, flooded campus round-table discussions on the topic, or successfully petitioned campus career centers to yank unpaid listings. "It has been curious to see silence coming from Boston," concedes Yamada, who worries whether passion for this cause is sustainable, as its leaders and members eventually advance, find paying work, and move on. Broida, the former public radio intern, suspects current students are too invested in the system. "You're still drinking the Kool-Aid at that point," she says. "Your parents and professor say this makes sense. There's a lot of pressure not to think about it too deeply until you try to get a job a few years out."
For now, all sides are waiting for the results from the US Court of Appeals for the Second Circuit in New York, which is expected to take on the Fox Searchlight case later this year. "This was always in the cards," says Dudson, who hopes his magazine will help interns and employers contemplate the implications of the current intern culture. "An unopposed system of near-infinite skilled young people willing to work for free is simply unsustainable."
HARD WORK, NO PAY
An Internet search on January 6 turned up hundreds of postings for local unpaid internships. A sampling:
At Fancred, a sports social media network in Cambridge
DUTIES Post content about your school's sports program, host events, run marketing programs.
COMPENSATION "Receive a recommendation letter from the Fancred CEO," according to the posting. "Receive free Fancred swag."
Marketing/Social Media Intern
At cookbook publisher Harvard Common Press in the South End
DUTIES Conduct market research, help with mailings, write press releases and other materials, assist with accounts receivable and payable, represent the company at trade shows, monitor and post to social media, assist in events.
COMPENSATION "Interns leave with a letter of recommendation, a stronger resume, and valuable publishing experience," according to the posting.
At Chocolate Therapy, a gourmet chocolate shop in Framingham
DUTIES Manage project calendar, handle correspondence, maintain appointment schedule, attend meetings.
COMPENSATION "This is an exceptional opportunity for an individual seeking to build entrepreneurial skills and learn how to run a business," according to the posting.
Melissa Schorr is a frequent contributor to the Globe Magazine. While a journalism student at Northwestern in the 1990s, she had two unpaid internships. Send comments to firstname.lastname@example.org.