Will Work for Free: How Unpaid Internships Cheapen Workers of All Ages

BY Paul Solman  September 26, 2013 at 4:50 PM EST

By Ross Perlin

Unpaid internships not only take advantage of young workers, they displace older workers, says “Intern Nation” author Ross Perlin. Photo courtesy of flickr user Adam Fagen via Creative Commons.

In Thursday’s Making Sen$e broadcast segment on unpaid internships, which you can watch below, we spoke with Ross Perlin, author of “Intern Nation,” about the work-for-no-pay phenomenon (which reaches to the highest echelons of power) and how it has evolved over the past several decades into a requirement for many college students, and even some graduates. Here, Perlin explains who’s to blame for the explosion of unpaid internships and why it needs to end.


Paul Solman: What’s the basic theme of your book “Intern Nation”?

Ross Perlin: Internships have become pervasive in our society. It’s something that the vast majority of college students do. It’s something that everybody has an experience around, whether they were an intern, whether their kid was an intern, whether they worked with interns. And the basic argument I make is that the system has gone off the rails. What started out as a good idea — the idea that we need somehow to bridge the gap between school and work, that we need to find a way to get people practical experience and to figure out where they’re going to go in the world of work — that good idea has gone sour in a lot of ways: interns have been used as a cheap labor force, thousands upon thousands of internships each year in the U.S. are illegal, which has gone global and is completely unregulated, and the system is indeed inefficient and unethical in a variety of ways.

Paul Solman: But there is a real problem getting people from school to work, isn’t there?

Ross Perlin: There is. It’s a fundamental question for an industrialized society in the U.S. and elsewhere, but there are multiple solutions to it. I think one perception is that internships represent a kind of modern day apprenticeship, or a sort of white-collar apprenticeship. And one thing I found in my research is that it’s not really the case. Apprenticeships were multiple-year-training programs, where people were brought into a profession, but internships are far too brief and superficial, and there’s no kind of oversight or broader social thinking about them.

For instance, with apprenticeships there’s a small but very effective office in Washington, D.C., called the Office of Apprenticeship, which mandates certain basic standards. We have hundreds of thousands of apprentices today in the U.S., in fact, mostly in blue-collar trades, and by and large, they get paid a living wage, they have health insurance, and although the system has its flaws, it’s relatively fair. If you compare that to internships, where an estimated third or half are unpaid, there’s clearly an issue of privilege and access, because a lot of people can’t afford to work unpaid, and indeed it’s not just working unpaid: you have to be able to afford rent; you have to be able to pay for your food while you’re doing this; and it’s increasingly in the most expensive cities in the country — New York, D.C., L.A. — where internships are concentrated. So there is really a kind of disconnect between the ideal that apprenticeships, to some extent, are fulfilling and what current internships represent.

Paul Solman: Whom do you blame for, if not instigating the explosion of unpaid internship, at least playing along?

Ross Perlin: Students have played a role by going along with it; the government has played a role by being asleep at the switch; but colleges and universities have also played a role. I think there are three ways in which schools have been complicit. One is by promoting and advertising unpaid and often illegal internships on campuses. Another is by sustaining these internships through the academic credit system, so that companies can feel that by providing academic credit — and of course, that’s disingenuous because it’s really schools that provide the academic credit — they don’t have to pay. Totally illegal but that’s what they say and schools, in many cases, play along by issuing academic credit, which they get paid for.

And the third way in which schools have played a role is by requiring internships. Certain programs, certain colleges and universities actually require that you do one or even more internships to graduate, and that’s something which I think really should not be the case, unless you can guarantee that those are going to be paid situations and quality situations. In many cases, people do required unpaid internships, paying their schools to go work off campus unpaid, which is completely unreasonable.

Paul Solman: Do they never work out?

Ross Perlin: Of course, for some people internships do work out. Some internships are very well structured; some internships are well paid; many internships do lead to jobs in certain industries. That was kind of the original conception. If you look back at the early years of the modern internship, starting after World War II, it was primarily a training and recruitment mechanism for large companies and they would take 60 or 70 percent of their interns into jobs at the end of it.

But increasingly, what interns face now is that there are no jobs, and no prospects of a job waiting at the end, no matter how well they do. Indeed, they’re going to have to do multiple internships, become serial interns, and even at the end of that, they may be in a very precarious position. So it’s really something that sounds good for a lot of people but increasingly is not working out. Since 2008, rising college tuition, record levels of student debt and high levels of youth unemployment have exacerbated the dismal prospects for unpaid internships. Unpaid internships have become a straw that breaks the camel’s back for many people.

Paul Solman: Why has the internship become such a pervasive phenomenon, and only really in recent years?

Ross Perlin: It’s the last few decades, really. The term internship goes back to the medical profession, late 19th century, and that word was associated with young doctors in kind of a transition period between medical school and entering the profession. And that was true really into the 1970s and the 1980s. When you said “intern” that meant a medical student. When I mentioned (to my parents and grandparents) that I was doing an unpaid internship several years ago, going through this rite of passage that everyone in my generation was going through, my parents knew what it was, but they said, “Unpaid?” My grandparents rejoiced; they thought I was going to become a doctor.

So, clearly something has happened in the last few decades, where the meaning of this term has changed. We’ve seen an explosion of precarious and contingent work arrangements, of which internships are just one kind, including freelance work, the rise of temp labor, permalancers, permatemps — a whole array of arrangements. And at the same time, there’s been no regulation and no enforcement of the law. And so you’re seeing a lot of industries pushing the edge of the envelope.

Paul Solman: So businesses do it because they can get away with it, and young people take the internships because they think they have no choice. From your point of view, how do we solve this problem?

Ross Perlin: There is existing law relating to internships, as I think people have learned really forcefully recently with the “Black Swan” case and the precedent that’s come down. There is a law that goes all the way back to the Fair Labor Standards Act, the fundamental law that protects American workers and provides for a minimum wage. It also applies to a lot of interns, those who do real work.

But at the same time, it’s not just about enforcement of the existing law; it’s also about that supply of free labor that is generated partly because schools are encouraging internships and because some are even requiring internships. There’s a whole culture around internships: this idea that you’re going to work unpaid has been completely naturalized. It’s something you hear from your parents and teachers, and indeed, it may be required.

Industries can take action; industry associations from architecture to public relations have actually said, “Whoa. We’re actually eating our young. We’re doing things that are leading to burnout at a very early age.”

So there are a variety of solutions and there are a variety of players: government, but also parents, teachers, schools and employers. I think certain employers are realizing that it’s better to invest in people in a serious way and to actually not have this disposable workforce of interns that you’re getting some quick, cheap labor out of, maybe, but in fact that may really burn you down the line.

Paul Solman: Why?

Ross Perlin: Well, you may get hit with one of these lawsuits. We’ve seen more than a dozen in the past year, but that aside, there can also be a threat in terms of the perception of a company. We’ve seen just recently with a couple of different businesses — a start-up in Vancouver, a well-known restaurant in New York — that even just advertising for an unpaid internship can backfire. These posts have gone viral and people have said, “What? You can’t afford to pay? We know you’re a hot restaurant; we know you’re a hot start-up. You can’t afford to pay somebody at least minimum wage?”

So it sends a certain message to young people, for whom this has become a very sensitive issue, and it leads to a certain perception of the company. At the same, I’ve heard from some employers that they would rather have people who are going to stick around for a while. To have that revolving door — it may seem attractive at first that you can plug people into projects and fill gaps, but in the long run, it’s exhausting to have people keep coming through.

If they’re not getting a paycheck, the main way that interns actually protest is not through lawsuits; it’s by voting with their feet and leaving. The attrition rate from my research is very high. Interns see that there’s nothing there for them. They see people are not getting jobs at the end of it. They’re not really learning anything. It’s not well structured in terms of training. It’s going to be a revolving door and, you know, that’s not going to help your business run well.

Paul Solman: But isn’t it the case that if you take it seriously as an employer, then you want to provide, need to provide, training, and that’s time consuming?

Ross Perlin: It’s true. I think employers thinking about internship programs face a choice: are we going to pay or are we going to provide serious training? Or, ideally, are we going to provide some combination of the two, which is what will really allow us to develop somebody who might become a future employee? And the best intern-employers do some combination of the two, which can pay serious dividends. This is a major way to cheaply recruit talent, even if they’re paying. They get access to people at a younger age, people who are still in college or just out of college, and that does create a certain kind of relationship. So I think it still has huge advantages for employers. I don’t think we’re going to see internships disappear any time soon, but I think we’re seeing employers really rethinking the basis of their programs.

Paul Solman: Are we beginning to see the end of the unpaid internship?

Ross Perlin: To a substantial extent, I think we are. There will remain certain cases — they may be in the non-profit sector; they may be in the public sector; they may be at certain firms, particularly small ones that choose to really provide that intensive training instead of paying, which, within a certain scope, is legally allowable. But to a substantial extent, we are going to see companies switching from unpaid to paid. We are already seeing it, and it reflects the fact that, in the end, this is not a huge cost for most companies. They’re seeing the legal issues, the publicity issues around this, and that, ultimately, to make an investment in your interns is the better decision for the long run.

Paul Solman: And of course, it’s the nature of a competitive market system that you push the envelope because if you don’t, the other guy will, right? So only if you’re both constrained, will you then both be able to pay because if the competitor isn’t paying and you are, you’re at a competitive disadvantage.

Ross Perlin: Absolutely. The end of the unpaid internship is something that a lot of good employers who have been doing this right, by paying and developing their interns, are quietly very happy about. They are seeing that companies that tried to gain a competitive advantage by having, in some cases, several hundreds or a few thousand unpaid interns, you know, those advantages are going to melt away. I would argue those advantages were always on the surface to begin with, or were kind of short-run. But if people just follow the basic legal mandate of the minimum wage, it will level the playing field in the long run.

Paul Solman: If the illegal unpaid internship goes away, who will that be good for?

Ross Perlin: Fundamentally, those who are doing internships will benefit because their work will be paid. Also young people from working class backgrounds who can’t afford to work unpaid will benefit. But more broadly, there will be effects on the whole job market. This will represent a kind of real wage floor, which the minimum wage is intended to be, and those workers who have been displaced or in many cases replaced by unpaid labor, by unpaid interns, will benefit. And that’s not just other young people. I mean, we have seen the entry level job become an endangered species, partly as a result of unpaid internships. But many older workers have also found that young people working for free, or working for a small stipend that amounts to less than minimum wage, are taking their jobs. During the days of the 2008-2009 recession, I heard of numerous cases of a company that would have a hiring freeze but still bring on unpaid interns. So the disappearance of the unpaid internship will have ripple effects — positive effects for American workers across the board.



In our Making Sen$e segment Thursday, Paul Solman spoke with “Intern Nation” author Ross Perlin.


This entry is cross-posted on the Rundown — NewsHour’s blog of news and insight.