GWEN IFILL: Now: the value of work.
Unpaid internships are more common than ever, but are they legal?
NewsHour economics correspondent Paul Solman has the story, part of his ongoing reporting, “Making Sen$e of Financial News.”
PAUL SOLMAN: Imagine you're a college student who wants to be in entertainment, and you land an internship at Saturday Night Live.
MONET ELIASTAM, Former Unpaid Intern: It seemed like a dream come true. I was really excited.
PAUL SOLMAN: Or you grew up in a PBS-loving house, and you get to intern for the Charlie Rose show.
LUCY BICKERTON, Former Unpaid Intern: It was a really exciting time. I got to meet all the presidential candidates.
PAUL SOLMAN: Or you have been working a humdrum job in financial services, are looking to change careers, and you're offered an internship on a major Hollywood feature.
ERIC GLATT, Former Unpaid Intern: I thought, well, this is one of those kind of breaks that may lead to other big things.
PAUL SOLMAN: Actually, in all three cases, it led to other things, all right, other unpaid internships.
Monet Eliastam worked 25 hours a week her whole junior year at Barnard for Saturday Night Live's film unit.
PAUL SOLMAN: What was the favorite commercial parody that you worked on, or your favorite?
MONET ELIASTAM: Probably “Disney Housewives.”
MAN: It's the princesses as you have never seen them before.
PAUL SOLMAN: A takeoff on Bravo's Real Housewives franchise.
MONET ELIASTAM: I had actually worked before as a paid P.A. on commercial shoots. And so I knew that the work I was doing was exactly the same work that I had previously done, except now I was doing it for free.
PAUL SOLMAN: Legally, unpaid interns can't displace regular paid workers, doing real work for no pay. They're supposed to be learning. And the employer can't derive immediate benefit from the intern's activities.
LUCY BICKERTON: The financial stress was really difficult.
PAUL SOLMAN: Working on the Charlie Rose show the summer before senior year at Wesleyan was Lucy Bickerton's third unpaid internship.
LUCY BICKERTON: In some ways, that was sort of the best-case scenario of an unpaid internship. I actually got a paid opportunity out of it, you know, a year later, after I graduated. But then going on to get paid for that same work, I realized, why wasn't I getting paid for this before?
PAUL SOLMAN: How many hours a day were you working?
ERIC GLATT: Oh, normal full-time job, eight, 10 hours, depending on the day, 12.
PAUL SOLMAN: Eric Glatt was 40 years old, had an MBA and years of experience, when, unable to find any paying jobs in film, he took an internship on Fox Searchlight's “Black Swan.” The 2010 film went on to earn $300 million dollars. Glatt earned nothing for hundreds of hours of work as an accounting clerk.
ERIC GLATT: Helped manage the work flow and the paperwork and personnel files and receipts and petty cash and purchase orders.
ROSS PERLIN, Author, Intern Nation: Internships have become pervasive in our society.
PAUL SOLMAN: Ross Perlin is the author of "Intern Nation," an expose of a system that's come a long way since the word intern was first applied to newly minted M.D.s.
ROSS PERLIN: What started out as a good idea, the idea that we need to somehow bridge the gap between school and work, that good idea has kind of gone sour in a lot of ways, and interns have been used as a sort of cheap labor force. And it's become exacerbated really since 2008, where internships have been coupled with rising tuition, record levels of student debt, high levels of youth unemployment. And they have become a straw that kind of breaks the camel's back for many people.
PAUL SOLMAN: For Eric Glatt, the epiphany was a New York Times article: "The Unpaid Intern: Legal or Not?"
ERIC GLATT: I think I actually may have been sitting at my desk at work, and I saw this. And it was one of those thing where I was like, “I knew it.” I knew there was something illegitimate about this, and that it's not just an ethical question. It's a legal question.
PAUL SOLMAN: Glatt found a lawyer and took action.
Bickerton heard about it and followed suit.
LUCY BICKERTON: I had no qualms about it.
PAUL SOLMAN: But these people gave you an opportunity. You were thrilled at the time. Didn't you feel like you were kind of stabbing them in the back?
LUCY BICKERTON: I felt like it was illegal, no matter what.
PAUL SOLMAN: Eliastam read about both cases and, live from New York, filed her own suit in July.
MONET ELIASTAM: It just clicked. It's not right, and you can do something about it if you want to.
PAUL SOLMAN: And then, earlier this summer, Glatt won his case, paving the way for a class-action against Fox. The Charlie Rose show settled with Bickerton and about 40 other interns for back pay. It also abolished its internship program.
Since "they weren't performing work," said attorney Lyle Zuckerman, "these lawsuits will do nothing but deprive students of real educational opportunities."
Eliastam's case is in its early stages. But the news is that NBC Universal has begun paying all of its interns.
Rachel Bien, lawyer for all three clients, says their cases promise not just to help interns, but workers in general.
RACHEL BIEN, Attorney: If interns are able to get the minimum wage, that's going to help people who are farther up the totem pole as well.
PAUL SOLMAN: And give students who can't afford to work for free a shot at opportunities otherwise out of reach.
But at least one former unpaid intern thinks the lawsuits, and their success, is a setback for his generation.
MICHAEL MORONEY, Franklin Center: A lot of these disgruntled interns are really just trying to make a splash in the media.
PAUL SOLMAN: Michael Moroney works at the Franklin Center, a conservative group in Alexandria, Va., which has lots of interns, though all of them paid at least minimum wage. Still, he says unpaid internships like one he had with a D.C. lobbyist are win-win.
MICHAEL MORONEY: Because you get tons of new experience, and on top of that, you get to make new connections and really build your resume.
Unfortunately, I think we're moving towards a system where it's not going to be a minimum wage job vs. an unpaid internship, and it's going to be a system of an unpaid internship or your parents' couch.
PAUL SOLMAN: This, of course, is also the standard economic argument against raising the minimum wage: Those at the bottom would no longer have any work at all. How does "Black Swan" accountant Eric Glatt respond?
ERIC GLATT: This is a form of generational exploitation that I think a lot of people fail to appreciate. The millennial generation now is already subject to a social experiment we have never even come close to before, which is the student loan debt burden.
At the same time, we have created this other structural practice of giving away your labor for free.
PAUL SOLMAN: Moreover, says Glatt, colleges are not only expensive. They're unintentionally enabling the post-graduation jobs crisis.
ERIC GLATT: They're basically destroying the job market that their students are going to graduate into.
CHRISTINA ISNARDI, Student, New York University: I was required to pay for an academic credit in order to do this internship.
PAUL SOLMAN: New York University student Christina Isnardi is trying to do something about the college problem. She also interned on a feature film set, without pay but for one NYU credit, which costs about $1,200 dollars.
CHRISTINA ISNARDI: They had me sit in the basement of a church half-a-mile away from set watching equipment. Another day, they had me press elevator buttons. I was deriving no educational benefit from this.
PAUL SOLMAN: None whatsoever?
CHRISTINA ISNARDI: I don't know. I did learn what the bottom rung to the film set is, but I knew that was an actual position that should be filled by an employee who was getting paid.
PAUL SOLMAN: While she contemplates her own lawsuit against the film company, Isnardi is leading an effort to get NYU to stop letting employers post illegal unpaid internships on its job boards.
CHRISTINA ISNARDI: We said, look, you're promoting this practice of allowing these companies to violate labor laws and use students for free. So, we were hoping that you could possibly take down these internships and replace them with paid opportunities.
TRUDY STEINFELD, Director, Career Development Center, New York University: We would love if every internship opportunity that -- is possibly paid, but that's not the reality.
PAUL SOLMAN: Trudy Steinfeld is director of NYU's Career Development Center. She says the university already vets unpaid internships for compliance with federal guidelines, and strongly urges students to immediately report any that are out of bounds.
But she also says that, while NYU is taking Isnardi's petition seriously, there are too many students who want unpaid internships to do away with them altogether.
TRUDY STEINFELD: They feel, particularly because they might be first- or second-year students, that if they don't have an opportunity to sort of learn and get something on their resume early on, that it might be harder for them to obtain those really competitive internships at really large organizations or very highly touted organizations later on in their academic career.
PAUL SOLMAN: And that's true, says Christina Isnardi.
CHRISTINA ISNARDI: There's a high student demand for these internships, especially in certain fields, such as journalism, or film, or music.
PAUL SOLMAN: Sean Stanton works in another hot industry these days: organic farming.
You have an intern?
SEAN STANTON, Organic Farmer: I have several, yes.
PAUL SOLMAN: Do you pay them?
SEAN STANTON: Yes. I mean, I pay them a stipend, I feed them, and I house them.
PAUL SOLMAN: But you could get unpaid interns, couldn't you?
SEAN STANTON: You might not get the same caliber, the same quality people.
PAUL SOLMAN: And you might be breaking the wage and hour laws, says attorney Bien, which have evolved over the past century to protect workers and define work in America.
RACHEL BIEN: What the value of work is, that there is a value, that a minimum has been set by the law, and understanding how important it is to maintain that in order for our economy to work.
PAUL SOLMAN: To work down on the organic farm or even perhaps in uptown New York.