Unpaid Internships: Espresso And Exploitation | Lisa Robinson

Lisa Robinson is a graduate of the UMass Amherst Labor Studies program where she received her MS in 2020. Prior to that, Robinson complete her BA in Political Science in 2019 also at UMass Amherst.

 

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**Second Place Award for Research**

 

Introduction: Many college students choose to take part in an internship during their academic career. Interns may be rewarded with academic credit from their university, experience in a field they might be planning to enter into post-graduation, or in some cases, payment. Unpaid internships, however, have drastic impacts on labor. Unpaid internships set a dangerous precedent for fair labor due to their legal impacts, economic ramifications, and how they aid in the reproduction of inequality, for both societies and individuals.

 

Among almost all college majors, from students in the STEM fields to the arts, internships have grown immensely since the 1990s. Initially, internships were most popular for students who were in the STEM fields, particularly for those in engineering majors.¹ However, today, they are popular among most majors and fields of study. Depending on where a student may participate in an internship, they may be given tasks that vary in educational relevancy. For some students, they might work hands-on with material that is pertinent to the learning process of their particular occupational field, but for others interns are forced to do “meaningless ‘grunt’ work, to fetch coffee and make copies.”² Despite how meaningful the internship may be, students may feel compelled to take on this unpaid labor. As internships become more popular for students across all fields, employers are now finding it critical for many applicants to have taken an internship at some point prior to entering the workforce: “a period of internship is fast becoming regarded as an essential credential for accessing paid employment.”³ While internships become increasingly more vital for entry level positions, students who have not done one, which could be for a variety of systemic reasons which will be discussed later in this paper, are put at a disadvantage. Unpaid internships are changing the landscape of what entry level work means for recent graduates. Not only are they changing what work looks like overall, but specifically they are impacting labor in terms of their legal, economic, and ethical ramifications.

Legal Impacts

Unpaid internships create a dangerous precedent for fair labor due to the fact that their legality is unclear. On its surface, unpaid internships are essentially unpaid labor. Interns are given tasks and projects that may be similar to that of paid employees. Furthermore, even if they are simply given duties that are remedial like ordering coffees or printing out documents, they are still contributing labor to the organization for which they are not being compensated. Employers who hire unpaid interns are able to get away with this due to interns not fully being considered employees. By manipulating the language and fine details of the Fair Labor Standards Act, employers are able to exempt interns from the protections that are guaranteed to paid employees. The FLSA applies to individuals who are considered employees. As an employee, you are guaranteed certain protections that are included within the act including being required to be paid the minimum wage and receive overtime compensation when working over forty hours per week. Interns, however, are often defined as trainees. By being “characterized as a ‘trainee’ rather than an ‘employee’[...], the provisions of the FLSA do not apply.”⁴ Employers are able to legally get away with not paying their employees or expecting them to work immense amounts of hours with no compensation. Due to their status as trainees rather than employees, interns have no legal leverage to challenge these decisions, and thus have no legal power against their employer, deepening the unequal relationship between employer and employee. In order to clarify the language of the FLSA, the Wage and Hour Division of the Department of Labor has set out a list of guidelines that internships must align with in order to legally be exempt from the FLSA’s protections. Although employers must abide by these guidelines, we can see that employers often act in violation of them. This list includes seven criteria that need to be met in order for interns to be legally considered trainees and not employees, and thus not included under the FLSA. The criteria are as follows:

1. “The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”⁵

In order to determine if an intern qualifies as an employee, courts are intended to use these guidelines as a reference and determine who is the “primary beneficiary” of an intern-employer relationship. In other words, courts are to decide which party is reaping more of the benefit from any given internship. When analyzing these factors, it often becomes challenging to determine if the intern is truly reaping more of the benefit. Further in this paper, we will be discussing how some of these points, when violated, have further implications in terms of the economy and ethics, however, even when viewing this strictly from a legal standpoint, it is important to see the dangerous precedent that violating these guidelines with no repercussions creates.

Following a wave of lawsuits against different companies by unpaid interns, the Labor Department felt compelled to clarify the language of these guidelines and loosen the standards.⁶ Furthermore, some find the January 2018 update of these guidelines to be more lenient towards employers than the previous guidelines. The slew of lawsuits began with interns claiming that Fox Searchlight Picture had violated the WHD guidelines throughout their work on the set of the film Black Swan. Interns at Cosmopolitan, Marie Claire, and other magazines owned by the Hearst Corporation, along with interns from the PBS show The Charlie Rose Show have all waged lawsuits against their employers as well, with some interns succeeding in their court cases and others not. This inconsistency in enforcement could prove to be quite problematic when it comes to the enforcement of the WHD guidelines in the future.

Interns also receive less protection when it comes to workplace environment abuses, like sexual harassment and discrimination. According to one study, nearly 49 percent of interns experience at least one instance of sexual harassment.⁷ Despite these staggering numbers, interns do not have the legal power to sue their employers for sexual harassment due to the fact that they are not technically designated as employees. For instance, in the case of Wang v. Phoenix Satellite TV US Inc., a former intern, LiHuan Wang, could not sue her employer for creating a hostile work environment since she was not technically considered an employee under the law.⁸ Sexual harassment can create a lot of strife and discomfort for interns, who may believe that internships are critical for the path to a successful career. Not only that, but legally, this excludes many people from receiving the protection from sexual harassment, although they may be sharing a workplace or responsibilities with employees who do receive the protection.

Discrimination is also a legal issue that interns may have to face in which they are not protected in the same way as employees. This discrimination is most evident in terms of ageism. For students who may be of an older demographic, they may face greater challenges when seeking internships that are not experienced by younger students. For instance, two applicants, ages 41 and 54, sued the magazine The Atlantic (at the time, known as The Atlantic Monthly), for denying them internships, stating that their program had an age cut off point.⁹ For employers, age is not considered a legal reason to deny someone employment, however, for interns who are not considered employees, this workplace protection is not guaranteed.

By creating an entire sector of the workforce that is not protected by certain labor laws, it weakens the legal legitimacy of these laws overall. If the scope of the FLSA is narrowed for the instance of unpaid internships, it creates a precedent for the scope to be narrowed even further. This could potentially mean fewer people are protected by the FLSA, and from this, could lead to further workplace abuses in the context of wages and overtime compensation. Interns must be made aware of these criteria before entering into an internship. By being educated of their rights as interns, and potentially employees, it could offer them the opportunity to challenge the relationship. Although educating interns on their legal rights is critical, it is also vital that employers are strictly supervised on how they carry out their internship programs. The activity of employers and interns calls for close analysis in order to see whether or not the program is in violation of the FLSA, in order to not only protect interns on an individual basis, but also to not weaken the FLSA for the future workforce.

Economic Impacts

Unpaid internships also have harmful economic ramifications, for both our economy in general, and for individuals. While it is challenging to exactly determine how much money companies save thanks to unpaid interns, Hart provides a conservative estimate of about $600 million per year.¹⁰ Some may view this as a gain for the economy, however, when we look deeper into this unpaid labor we can see how this lack of revenue is harmful to the economy overall. Due to the creation of unpaid internships as its own sector of the labor force, it eliminates an entire market of entry-level positions that would otherwise be available to recent graduates entering the workforce. As these masses of people are unable to find work, while interns occupy positions that could otherwise be available to them, this leads to large swaths of recent graduates unable to find sustainable jobs and contribute to the economy. Because of this, “displaced workers have to find other jobs, draw on unemployment compensation and may be reduced to welfare.”¹¹ This puts a strain on our welfare system as more and more people need to rely on social welfare in order to survive, because they are unable to find jobs due to their positions being occupied by interns. Since employers do not need to pay interns, they are more incentivized to hire interns for these lower level positions rather than paid employees. This limits the possibility of paid employees being hired in the future as employers may feel that they are not reaping any immediate benefits from a paid employee over an unpaid intern. In the case of financial crisis, “economists have noted that unpaid internships slow overall economic recovery; because they have no income, unpaid interns cannot contribute to economic growth.”¹² Since they have no means to contribute to the economy, it creates less of a stream of capital back into the economy in times of recovery.

On an individual basis, internships have economic harms as well. In addition to some of the impacts listed above, in terms of unemployment and increased reliance on social welfare programs, interns and graduates are participating in a system that works against their potential for better jobs in the future. Interns could be taking an internship in order for it to be a resume booster, and interns are occupying positions that could be otherwise available. Unpaid interns “effectively deprive themselves of considerable compensated job opportunities; thus, they collaborate in their own victimization.”¹³ To elaborate, interns contribute to a system that could potentially harm them in the future with the hope that the system will benefit them in that same future pursuit. Even before the challenges of searching for a job, working as an unpaid intern may come with individual financial hardship. Based on the amount of time interns must devote, some interns are unable to work a paid position in addition to the internship. Even if they are able to balance both, the increased commitment makes it challenging to work for pay as many hours as one might hope or need. Because of this, “unpaid interns are not contributing to social security or otherwise saving for retirement or accruing capital.”¹⁴ This can create potential economic hardships in the future for interns, as they are devoting a period of their life to labor yet they are not contributing any capital to secure their financial future.

Unpaid internships have also been found not to provide as much of a ‘foot in the door’ benefit as could be expected. The National Association of Colleges and Employers, an organization that tracks trends, salaries, and other job-related information pertaining to college graduates, conducted a three-year long survey regarding unpaid internships. They asked graduating seniors if they have received a job offer as well as if they’ve ever participated in a paid or unpaid internship. Of the 9200 students interviewed, they found that 63.1 percent of students who had completed a paid internship had received at least one job offer. Conversely, only 37 percent of students who had completed an unpaid internship had received a job offer. Even more startling, this was only a 1.8 percent advantage over students who had never completed an internship at all. Furthermore, these findings were fairly consistent among most majors. From business, to communications, to engineering, unpaid interns did about the same or worse on the job market compared to students who had never completed an internship.¹⁵ Intern Bridge, a consulting firm who conducts similar research on college recruiting, found similar results when they conducted a survey regarding job offers for former interns. This survey was conducted for 11,000 students who were in their sophomore year or higher, who had completed internships. The survey asked if these students had received job offers at the conclusion of their internship. The survey found that paid interns were about twice as likely to receive a job offer as their internship concluded than unpaid interns.¹⁶ This can harm an individual on a personal basis, economically, due to the potential misbelief that unpaid internships may promise some sort of job opportunity in the future.

For both the economy overall and individuals’ finances, unpaid internships have negative consequences. The continuation of this sector actively works against interns who may be seeking jobs in the future. Furthermore, due to the fact that they aren’t generating any capital, they are unable to contribute to social security programs or towards the economy. This has damaging impacts on the economy as a whole. On a personal level, interns may find it challenging to devote their time to both an internship and a paid job, so because of this they may forced to deal with personal financial struggles, like an inability to invest in a future retirement plan. Unpaid internships create major economic consequences on a widespread and an individual level, which certainly warrant further criticism.

Reproduction of Inequality

The third area of labor where internships have drastic impacts is how they aid in the reproduction of inequality. The fight for labor prioritizes fairness and justice, however, those two qualities are being neglected within the world of unpaid internships. Many students simply cannot afford to devote a period of time to working without pay. For these students who must devote their time to working a paid position, they are excluded from taking unpaid internships and thus must deal with greater challenges when applying to jobs in the future. While there is the narrative of the ‘American Dream,’ this goal is unavailable to many when struggling to move forward with their career: “individualism remains ‘bounded’ by social biography, as young people negotiate [...] according to their capital and resources.”¹⁷ Students who are expected to financially provide for themselves, or whose parents do not have the means to fully support them, must excuse themselves from participating in an unpaid internship, which also limits them from all of the benefits that go along with internships.

This further perpetuates a cycle of systemic inequality. As more employers are considering internships essential to a job offer, these students who may not be affluent enough to not work for pay, continue to be thrust into a lower class of job offerings. Since higher, better quality jobs may require an internship, these recent graduates who were unable to be interns now only have access to a smaller, lower quality pool of job offers. This perpetuates the cycle of inequality since social mobility is now contingent on financial security rather than merit. Although two applicants may have attended the same college and participated in the same campus activities, the student who had the financial means to devote a summer to working as an unpaid intern could have an advantage over a student who needed to work a minimum-wage job in order to support him- or herself. An employer may determine if an applicant is qualified or not based on whether they have completed an internship, however, many students simply do not have access to these qualifications.

Another aspect of unpaid internships that is ethically unsound is receiving college credit for completing an unpaid internship. Many colleges and universities offer students academic credit upon finishing an unpaid internship, which can go toward their graduation requirements. While to many, this offers an easy way to receive credit and potentially speed up the path towards graduation, this quid-pro-quo is not as beneficial as it may seem. Many schools require their students to pay for the credit that they are receiving. So for unpaid interns, not only are they devoting their labor “for no pay, but it also involves the students actually paying thousands of dollars to their schools [...] for academic credit.”¹⁸ This further deepens the inequality between the haves and the have-nots, as students who have the financial means to afford this are receiving the added benefit of academic credit, while students who cannot afford this extra charge, are awarded simply with the ability to list it on a resume and potentially have access to more job opportunities. Not only that, but students are in essence paying to provide free labor. This completely goes against the ethical fabric of what the labor movement stands for, as working people should be compensated for their efforts, not the other way around. Furthermore, this dilutes the quality of what an academic credit means at a university. Rather than receiving these credits based on satisfactory academic performance that is being determined by a qualified professor, many interns may receive these credits for performing simple tasks, like running errands or alphabetizing files. Since one credit may be earned by devoting time in and out of the classroom towards academically rigorous programs and another credit may be earned for organizing files, it weakens the strength that an academic credit holds which can delegitimize the university overall.

Universities do not simply participate in the system of credited internships, but in fact they encourage it. Career service centers at universities may strongly urge students to participate in an unpaid internship for the potential of finding a better job in the future. While it could be true that internships open more doors, schools are benefiting financially from students participating in internships for credit. As more students seek academic credit for completion of an internship, the school is receiving more money for these paid credits, while not needing to devote their resources to paying teachers or paying for classroom materials. This harms not only students, but professors as well, as their efforts are put on the same level of legitimacy as these remedial tasks.

By analyzing specific career readiness centers at universities, we can see how students are urged to complete internships by universities, and why they may be doing so. At the University of Massachusetts Amherst, internships are strongly encouraged for students. An online database, Handshake, is available for students to search for internship opportunities as well as future career opportunities. On the University of Massachusetts’ Career Services webpage, there is a subsection devoted to internships and co-ops. The website clarifies what the difference between the two are, with all co-ops being paid and only some internships being paid. Internship information sessions, where students can ask questions and learn about the ins and outs of internships, are held weekly. Also on this page is the WHD’s fact sheet regarding the legal bounds of unpaid internships, which can provide students with some legal insight into potential abuses that come with internships.

Information regarding the cost of credited internships is a bit more challenging to locate. After clicking through a few different embedded hyperlinks, the University of Massachusetts gives a fairly simplistic table of maximum credits allowed per semester, how to pay for your credits, and how they are graded in their computer system. One interesting thing to note is that for internships, students who are taking them during the academic year are not required to pay any additional cost for the credits earned through internships, however, if a student completes an internship during the summer or winter, that student must pay per credit. Students are allowed to receive a maximum of 14 credits worth of labor, with 1 credit received for every 40 hours worked, during the summer, and a maximum of 4 credits in the winter.¹⁹ Although this information could eventually be found, the more challenging this information is to find, the less students will be aware of all of the requirements of credited internships. Students may be unaware of these restrictions, like the maximum amount of credits allowed, and unknowingly commit to too much work without any academic reward for it.

Despite the fact that many pages that provide more in-depth details about internships needed to be accessed by initially clicking other pages first, the information regarding how the University of Massachusetts Amherst provides credits to their students for their internships was fairly transparent. In addition to information regarding merely registering for these credits, they also provided tips about professionalism and housing. Although the information was pretty clear it is also important to note how strongly this institution encourages students to take internships, and the amount of resources they devote into pushing this agenda. The weekly information sessions as well as their database Handshake gives students ample opportunities to pursue the internship process. While on one hand students may receive future benefits from pursuing an internship, on the other hand, it is critical to recognize the underlying reasons as to why institutions like the University of Massachusetts Amherst urge their students so strongly to undertake one.

Conclusion

Unpaid internships have major impacts on the legal bounds of labor. Students who may pursue internships are disqualified from certain protections granted to employees, although they work within the same environment and are often tasked with similar, if not the same, responsibilities. This not only is harmful for interns themselves, due to the fact that they may be subject to workplace abuse, this can weaken labor laws overall, as it sets a dangerous precedent for which sectors of the job force are protected by these laws and which are not, thus allowing employers possible avenues for exploitation.

Although unpaid interns contribute a massive amount of money to the economy due to the capital that is saved by not paying them, there are still significant economic consequences. Students who participate in unpaid internships take the immediate financial hit of working without pay. This means hours lost to what could be spent earning funds to financially support themselves. Additionally, they may face greater challenges when seeking a paid employment position in the future, as they are participating in a system that removes many entry level positions from the job market. Unpaid interns furthermore may not be as likely to gain job opportunities than their intern-less counterparts, essentially lowering the usefulness of internships when it comes to the post-grad job search.

Lastly, unpaid internships contribute to structural inequality because of the fact that they are exclusionary towards lower income students and the conflict of credited internships. Lower income students may need to earn an immediate income and thus forgo an internship, which can lead to a greater job disparity in the future, if only those who have completed internships are considered qualified applicants. Universities which offer students college credits for their internships creates a greater conflict, as it not only dilutes the quality of an academic credit, but also further excludes low income people from this opportunity due to the fact that an intern must pay their institution in order to receive these credits.

Moving forward, it is critical that we question both the need for internships and their impacts. Although interns may receive valuable information about a career path they want to pursue following their college experience, there are great dangers that come from a world with unpaid internships. Society and individuals are heavily impacted by a world with unpaid internships, and for the most part, in a negative way. If this workforce will continue with unpaid internships, we must loosen the legality of the definition of employees in order to incorporate interns. We must make internships more accessible to people of different economic backgrounds. We must close the gap between those who can reap the benefits of unpaid internships and those who cannot. Unpaid internships warrant a great amount of scrutiny in the field of labor due to the consequences they impose for both society and individuals.

 

BIBLIOGRAPHY

Greenfield, Rebecca “Unpaid Internships Are Back, with the Labor Department’s Blessing.” Los Angeles Times, January 13, 2018. Accessed April 29, 2019. https://www.latimes.com/business/la-fi-unpaid-internships-20180112-story.html.”Career Services.” The Credited Internship Process | Career Services | UMass Amherst. Accessed April 29, 2019. http://www.umass.edu/careers/internships/process.

Fact Sheet - Wage and Hour Division (WHD) - U.S. Department of Labor. January 2018. Accessed April 29, 2019. http://www.dol.gov/whd/regs/compliance/whdfs71.htm.

Greenfield, Rebecca “Unpaid Internships Are Back, with the Labor Department’s Blessing.” Los Angeles Times, January 13, 2018. Accessed April 29, 2019. https://www.latimes.com/business/la-fi-unpaid-internships-20180112-story.html.

Gregory, David L. “The Problematic Employment Dynamics of Student Internships.” Notre Dame Journal of Law, Ethics & Public Policy 12, no. 1 (January 1, 2012): 241-242. Accessed April 29, 2019. https://scholarship.law.nd.edu/cgi/viewcontent.cgi?refer-er=&httpsredir=1&article=1379&context=ndjlepp.

Hart, Melissa “Internships as Invisible Labor,” Employee Rights and Employment Journal 18, no. 1 (2014): 144-145. Accessed April 29, 2019. https://heinonline.org/HOL/Page? collection=journals&handle=hein.journals/emplrght18&id=157&men_tab=srchresults.

Hughes, Sean, Jerry Lagomarsine “The Misfortune of the Unpaid Intern,” Hofstra Labor & Employment Law Journal 32, no. 2 (Spring 2015): 409-444. https://heinonline.org/HOL/Page?handle=hein.journals/hlelj32&div=19&collection=journals&t=1556571608.

Leonard, Pauline, Susan Halford, and Katie Bruce “The New Degree? Constructing Internships in the Third Sector.” Sage Publishing 50, no. 2 (May 12, 2015): 394. Accessed April 29, 2019. https://journals.sagepub.com/dofull/10.1177/0038038515574456#articleCitationDownloadContainer.

Weissmann, Jordan “Do Unpaid Internships Lead to Jobs? Not for College Students.” The Atlantic, June 19, 2013. Accessed April 29, 2019. https://www.theatlantic.com/business/archive/2013/06/do-unpaid-internships-lead-to-jobs-not-for-college-students/276959.

 

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¹ David L. Gregory, “The Problematic Employment Dynamics of Student Internships,” Notre Dame Journal of Law, Ethics & Public Policy 12, no. 1 (January 1, 2012): 241. https://scholarship.law.nd.edu/ndjlepp/vol12/iss1/5.

² Ibid, 242. I

³ Pauline Leonard, Susan Halford, and Katie Bruce, “The New Degree? Constructing Internships in the Third Sector,” Sage Publishing 50, no. 2 (May 12, 2015): 394. https://doi.org/10.1177%2F0038038515574456h.

⁴ Melissa Hart, “Internships as Invisible Labor,” Employee Rights and Employment Journal 18, no. 1 (2014): 145. https://scholar.law.colorado.edu/articles/78/.

⁵ “Fact Sheet - Wage and Hour Division (WHD),” U.S. Department of Labor, January 2018.,
http://www.dol.gov/whd/regs/compliance/whdfs71.htm.

⁶ Rebecca Greenfield, “Unpaid Internships Are Back, with the Labor Department’s Blessing,” Los Angeles Times, January 13, 2018, https://www.latimes.com/business/la-fi-unpaid-internships-20180112-story.html.

⁷ Sean Hughes and Jerry Lagomarsine, “The Misfortune of the Unpaid Intern,” Hofstra Labor & Employment Law Journal 32, no. 2 (Spring 2015): 421. https://heinonline.org/HOL/P?h=hein.journals/hlelj32&i=425.

⁸ Ibid, 421.

⁹ Ibid, 423.

¹⁰ Hart, “Internships” 143.

¹¹ Gregory, “Problematic Employment Dynamics,” 262.

¹² Hart, “Internships,” 144.

¹³ Gregory, “Problematic Employment Dynamics,” 261.

¹⁴ Hart, “Internships,” 144.

¹⁵ Ibid.

¹⁶ Ibid.

¹⁷ Leonard et. Al., “The New Degree?” 384.

¹⁸ Gregory, “Problematic Employment Dynamics,” 260

¹⁹ “Career Services,” The University of Massachusetts Amherst, Accessed April 29, 2019,
http://www.umass.edu/careers/internships/process.