The End of the Unpaid Internship

[jimmy olsen]

I bet there a few Languishites who wished this ruling was made earlier.

http://www.slate.com/articles/news_and_politics/jurisprudence/2013/06/black_swan_interns_case_internships_should_be_paid.html#comments

The End of the Unpaid Internship
The judge who said interns should be paid is right.

By Cullen Seltzer|Posted Tuesday, June 18, 2013, at 10:54 AM

Summer brings an annual invasion, in nearly every line of work, of shiny new interns. They're eager to fill out résumés and make contacts. That's what they get instead of money—and so they save their employers about $600 million every year, according to Ross Perlin in his book Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy. That's why the free intern bonanza continues despite plenty of complaints that it frequently means breaking the law.

Last week, in Glatt v. Fox Searchlight Pictures, a federal judge in New York broke up the party. Judge William H. Pauley III ruled that interns on two film production crews, including one from the Academy Award winning Black Swan, were employees entitled to payment with actual money. By not paying the interns, their employers violated the Fair Labor Standards Act.

Judge Pauley got it right. Much too often interns do work that people ought to earn money doing. The benefits of the intern economy don't outweigh the pernicious costs: distorted wages, exploitation of interns, a race to the bottom of the wage scale, and an erosion of the law's protections for workers.
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The Glatt case exposed how many interns don't meet the "trainee" exception to the general rule that all workers must be paid for their work. Judge Pauley made clear that to qualify as a trainee, an intern has to receive training similar to what would've been provided in an educational facility and must do work primarily for his or her own benefit, not the employer's. Also, the intern's work shouldn't be the sort of thing the business would have otherwise had to hire someone to do. The work the Black Swan intern did (getting lunch, filing, running errands, making deliveries) didn't cut it. About résumé fodder and networking, the judge said: meh. Those are benefits that paid workers get, too.

But wait a minute, you might say: These interns weren't tricked. They knew the deal when they signed on and agreed—and perhaps competed—to work for free. But as Judge Pauley pointed out, the Fair Labor Standards Act "does not allow employees to waive their entitlement to wages." That's how the law prevents unpaid interns from exerting "a general downward pressure on wages in competing businesses."

This sort of intrusion in the marketplace is precisely what government should do to regulate commerce.  Markets are enormously efficient allocators of resources. But an unregulated market that permits employers to take work for free, and workers to give it, has a dramatic, and unfair, effect.

There are three actors in this drama: employers (who want low labor costs), interns (who will work for free), and workers who need money. Traditionally, employers and interns have joined forces, effectively, to the economic disadvantage of workers. Because of interns, paid entry-level work is scarcer, and some workers lose out. The ones who can't afford to work for free lose out on the training and networking that unpaid interns enjoy. Judge Pauley said that isn't fair and it isn't legal.

This is just one ruling by one U.S. District Court judge, which means it doesn't apply outside of the Southern District of New York. But the Southern District is one of the nation's most prominent courts and Judge Pauley's reasoning is pretty compelling.  The Fair Labor Standards Act can require double damages, and it permits winning plaintiffs to recover their attorney fees. Smart employers with internship programs should look long and hard to make sure they're really treating their interns as trainees. Already lawsuits against Hearst and Condé Nast allege they haven't paid their interns the wages they are due. Even where interns got a modest payment, as claimed in the Condé Nast case—in which interns at The New Yorker and W Magazine say they were paid less than $1 an hour— they can say they're owed because they were paid less than the minimum wage.

It's no small irony that the case that could stem the tide of free interns arose from a movie that takes its inspiration from Swan Lake, which centers on a trick and betrayal. Too many internships are tricks played on workers and markets, pretending to be about learning but actually being about running the Xerox and fetching coffee.  One hallmark of real work is getting paid for it. Employers and interns everywhere should take the lessons of the Black Swan case to heart.

[garbon]

Boo, that extra money is either going to have to be allocated from elsewhere or not allocated.

[grumbler]

I don't believe that this ruling will stand, and if it does, then the only effect will be to eliminate internships.  Interns generally don't do wok that someone would be paid for, absent the intern (legal internships may be different).  Interns generally do make-work and optional stuff.  Every year, I work with students who intern (our seniors basically spend the last 4 weeks of the year on internships) and those who do work that someone would get paid for do so at such a low efficiency and high supervisory cost that no one would pay them to do it. 

[Grey Fox]

especially if Grumbler is right & internships position are eliminated.

[garbon]

I don't believe that this ruling will stand, and if it does, then the only effect will be to eliminate internships.  Interns generally don't do wok that someone would be paid for, absent the intern (legal internships may be different).  Interns generally do make-work and optional stuff.  Every year, I work with students who intern (our seniors basically spend the last 4 weeks of the year on internships) and those who do work that someone would get paid for do so at such a low efficiency and high supervisory cost that no one would pay them to do it. 

I think I'd add a few more exceptions. When I was a paid intern, I was being paid at a lower wage to do tasks that co-workers didn't want to do, but were still necessary.  Also, I'd throw in art gallery interns. Most have many interns that don't get paid who do the grunt work.

That said, I do overall agree with what you've said regarding internships then disappearing.

[HVC]

If you have to pay them companies will just hire experienced people so no experience for students.

[garbon]

especially if Grumbler is right & internships position are eliminated.

So then even fewer people will have had experience in their chosen field. I guess eventually that could be some sort of equalizer on the "wanting previous experience" front but seems like it'd first just make things harder for new job seekers.

[Grey Fox]

Yes but eventually the baby boomers will be old.

[Valmy]

If you have to pay them companies will just hire experienced people so no experience for students.

Nah.  Unexperienced college kids will always be massively cheaper than experienced CdMs out there.  There will be less internships and they will pay crap...at least in the fields where interns are unpaid.

[CountDeMoney]

If you have to pay them companies will just hire experienced people so no experience for students.

Nah.  Unexperienced college kids will always be massively cheaper than experienced CdMs out there.

[Eddie Teach]

seems like it'd first just make things harder for new job seekers.

Only the ones who were willing to work for free. The rest get a slight boost from no longer competing with "experienced" interns for the entry level jobs.

[garbon]

seems like it'd first just make things harder for new job seekers.

Only the ones who were willing to work for free. The rest get a slight boost from no longer competing with "experienced" interns for the entry level jobs.

My point was that there will initially be fewer places to get "experience" so those with experience (family-ins, etc.) will be even a further cut above.

[Valmy]

My point was that there will initially be fewer places to get "experience" so those with experience (family-ins, etc.) will be even a further cut above.

Yeah but the people with those sorts of advantages are going to win anyway.

[Josquius]

This is a good thing (tm).
My biggest problem with getting a career was always that I couldn't afford to start a career, as that would involve doing unpaid internships far from any support.
As it is because I couldn't afford an internship I couldn't go into the field I wanted.

[Tamas]

yeah great idea. Nothing better for companies, college grads, and the economy in general, than the need to pay regular money for totally clueless employees