Free to Work for Free

Prosecuting unpaid internships is a poor allocation of government resources

Outside the Yard

If you work without pay at a for-profit company this summer, the federal government should fine your employer. At least that’s the position of many academics who have argued that unpaid internships unfairly advantage wealthier students who can afford to work for free. It was about this time a year ago that the Obama administration announced a crackdown on unpaid internships in the for-profit sector, sparking a debate at Harvard and other campuses about the scope for regulation of these on-the-job training experiences. While unpaid jobs might disproportionately benefit the upper class, enforcing restrictions on internships undermines labor market protections for those who most need them.

The New York Times reported last April that unpaid internships have proliferated over the past two decades, accompanied by violations of federal employment law. The U.S. Department of Labor has hired 250 more investigators to bring firms into compliance with the Fair Labor Standards Act, which establishes a minimum wage and stipulates circumstances under which compensation for work in the for-profit sector may deviate from the legal wage floor. The Labor Department has developed six guidelines based on the FLSA that must be fulfilled for such jobs to be uncompensated, including that the intern must not displace paid workers, and that the employer must derive no immediate benefit from the intern’s work. Any labor that directly benefits a for-profit company, in other words, must be compensated even if the employee is willing to work for free.

College students accept unpaid short-term positions in exchange for experience and contacts in their prospective professions, but some have objected that unpaid internships provide an unfair advantage to certain students. The Crimson staff noted last spring that socioeconomic class determines, in large part, one’s ability to procure an internship, since less well-to-do students may not be able to forgo wages during the summer. These underprivileged students may face “de facto discrimination when applying for jobs for which an internship is deemed a stepping-stone.”

No doubt wealthier students find it easier to get both paid and unpaid employment. But requiring that all internships be compensated would result in substantially fewer of them being offered due to the expense to companies in terms of wages and paperwork associated with hiring paid employees. Even if the government eliminates this small instance of unfairness at the price of fewer on-the-job training experiences, it cannot expect to eliminate the role of interpersonal relationships in hiring decisions that inevitably advantages the well-to-do. Upper-class students will continue to have connections that afford them greater access to paid internships, as well as real jobs after college.

In the end, however, the debate about equity of internship opportunities within the collegiate community is largely beside the point. The very fact that interns are in college indicates that they are far more privileged than the people the federal minimum wage is designed to protect. The Labor Department’s unpaid internship guidelines are derived from the 1947 Supreme Court ruling in Walling v. Portland Terminal Co., which involved the payment of participants in a seven to eight-day course on the duties of a railway yard brakeman. The minimum wage was established to maintain a basic standard of living for the poor by ensuring that the wages of blue-collar workers—the kind of people who stop freight trains for a living—do not fall below a certain level. It was not intended to protect future college graduates, who will make far more than $7.25 an hour regardless of their socioeconomic backgrounds.

This is relevant in part because of how difficult it is to regulate the internship market. The Times notes that it is hard to mount a major enforcement effort because “interns are often afraid to file complaints,” worried they will endanger their chances with a potential employer. A ban on unpaid internships breeds disrespect for employment regulations in general, including those that benefit the poor, since its unenforceability demonstrates to firms that those who ignore the law benefit by employing free labor without consequences.

Even assuming the law could be perfectly enforced, the personnel and other resources used to monitor compliance must be diverted from other government functions. As Ivy League intellectuals wring their hands about equality of opportunity among America’s most privileged youth, many employer abuses of menial labor go unprosecuted. The most egregious manifestation of this is human trafficking, which is surprisingly prevalent in the United States and has elicited a woefully inadequate response from the federal government. Given the extent of demands on the government’s finite resources, ensuring equity among elites should be a low priority.

A more legitimate objective is to prevent unpaid interns from displacing paid employees, but the sort of tasks performed by summer law clerks and medical research assistants, as well as the temporary nature of many positions, suggests that interns’ willingness to work for free will rarely impact minimum-wage earners. What is needed is not stricter enforcement of current regulations, but a reworking of the regulatory regime, and possibly the FLSA itself, so that government efforts are targeted at protecting lower-class workers who live paycheck-to-paycheck—not college students and middle-class employees.

Peyton R. Miller ’12 is a government concentrator in Winthrop House. His column appears on alternate Tuesdays.

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