Summer 2011

Less than Zero

The value of intern labor in an age of economic inequality

Roger D. Hodge


The most telling characteristics of a society are often those that pass unnoticed. No one pays much attention to interns, for instance, yet the simple fact that at any given time hundreds of thousands of jobs are being performed for little or no pay is surely an important development in our political economy. Perhaps it says something about the value we place on work. According to Ross Perlin, the author of Intern Nation, the rise of this relatively new employment category, which is taken for granted by everyone from the antiunion governor of Wisconsin to the managers of Barack Obama’s reelection campaign, is a clear indication of the decline of labor rights in the United States.

Definitions of what exactly constitutes an internship vary widely. Are interns trainees, temps, apprentices, servants? Since the rules are vague or at least unenforced, employers simply fill in the blank with whatever tasks need doing, and interns often end up stuffing envelopes, fetching coffee, answering the phone, or collecting the boss’s dry cleaning. Not all their work is trivial, of course, and some internships offer useful training, but it is safe to say that vast numbers of interns are condemned to performing the mundane, vaguely humiliating chores that are the necessary if despised conditions of life in the white-collar world of work to which so many young people aspire. Far from providing an educational benefit or vocational training, internships have simply become, for many businesses, a convenient means of minimizing labor costs.

The College Employment Research Institute estimates that 75 percent of college students do at least one internship before graduation. The summer and part-time jobs that once occupied our otherwise idle youth have gone the way of the typewriter; nowadays, interns are everywhere, in publishing, merchandising, insurance, finance, consulting, law, engineering, and the defense industry. It seems that most large corporations pay their interns, but the number of unpaid jobs in the economy is booming. A recent article in Fortune magazine suggests that working for free might even be the “new normal,” a “wave of the future in human resources.” Based on his reporting, Perlin estimates that one to two million Americans work as interns every year, though he suspects that this number might be on the low end. Most interns are students or recent graduates, and large numbers, perhaps 50 percent overall, work for free. Worse, many actually pay tuition for the privilege of working, as a result of the common misconception on the part of both universities and employers that the bestowal of academic credit somehow nullifies the strictures of the Fair Labor Standards Act (FLSA) of 1938, which prohibits uncompensated labor except under carefully defined circumstances. Academic programs, both undergraduate and graduate, have increasingly adopted the internship as a degree requirement. Such requirements foster an economy of scarcity among the most prestigious internship programs, which like everything else in our capitalist democracy increasingly resemble commodities. Highly coveted internships at places like Vogue magazine have recently been auctioned off for as much as $42,500; Perlin notes the irony that this obscene sum was raised for the benefit of the Robert F. Kennedy Center for Justice and Human Rights. Apparently, no one was troubled by the contradiction.

Prior to the 1970s, internships were neither common nor prestigious. In mid-twentieth-century America, during the brief labor-business accord of the New Deal, very few people were expected or even permitted to work for free, and internships were largely associated with the training of medical doctors. As Perlin helpfully recounts, the term interne was first applied in the 1860s to the junior doctors who carried out lowly tasks such as bloodletting. Johns Hopkins medical school began using the term resident in the 1880s to describe more advanced training, and by the 1930s the internship-residency model of medical training was widespread. Since then, medical interns and residents have been fighting a regime of little pay and long hours that results in punishing work schedules and deadly medical errors. Curiously, in 1975, the organization that grants accreditation to medical schools stopped using the term intern—right about the time, Perlin points out, that this seemingly benign form of wage theft began to take hold everywhere else. It is surely no accident that internships proliferated in tandem with the decline of the New Deal and its hard-won labor protection.

The first nonmedical appearance of the internship model seems to have been in politics, and city governments in Los Angeles, Detroit, and New York City were early innovators. In 1935, the National Institute of Public Affairs launched a “hopeful experiment” in the training of young people for public administration by creating an unpaid one-year internship program for thirty “carefully chosen” aspiring civil servants. That vanguard experiment took hold and slowly spread throughout the economy. By the 1950s, internships had appeared in the world of publishing. Jackie Bouvier began her celebrated public career in 1951 by winning Vogue’s Prix du Paris, a one-year internship in which she divided her time between New York and Paris, and Sylvia Plath was selected by Mademoiselle in 1953 to be a “guest editor” for one month, an experience that became the basis for her novel, The Bell Jar. Notwithstanding these relatively glamorous examples, however, internships were still rare and were largely confined to public service.

Paid internships began to take hold in the corporate sector during the 1960s. Northwestern Mutual Life Insurance Company created an internship program in 1967 that put its young charges out on the street selling insurance in the guise of “fully licensed financial professionals.” Other large businesses followed in one way or another, and over the years companies such as Deloitte Touche, ExxonMobil, Microsoft, the Gap, and Monsanto have used paid internships as part of their recruitment strategy. Not all paid corporate internships are so beneficial, however, nor do all of them offer useful training for a worthwhile career in business. Disney, for example, employs up to eight thousand interns every year at its theme parks in Florida. Not to be confused with the company’s other quasi-educational programs (such as Disney University, the Disney Career Start Program, and the Disney Dreamers Academy) that evangelize the Disney brand to young people of various demographics, the Disney College Program promises an internship filled with “magic,” as well as “the opportunity to develop transferrable skills” and “professional connections.” After a modest beginning in 1980, when two hundred students spent the summer working at the Magic Kingdom, the Disney College Program has grown into one of the world’s largest internship mills.

Although it is billed as an educational and career opportunity, the Disney internship offers little more than a menial service job. Most Disney “interns” spend their days as “cast members” performing wonderful tasks like flipping burgers, cleaning toilets and hotel rooms, parking cars, and stocking gift shops. In essence, the program provides a hugely profitable corporation with a transitional population of fresh-faced temps, thus enabling Disney World, America’s largest single-site employer, to keep labor costs as low as possible. Disney’s so-called interns, a growing number of whom are recruited from abroad and given J-1 visas, resemble migrant agricultural workers more than trainees; they receive neither benefits nor raises, live in tightly supervised company compounds, and sometimes receive negative paychecks once rent and other expenses have been deducted from their meager wages. Interns may be dismissed at will, which for foreigners results in deportation. Despite the abusive and shady character of its program, Disney enjoys arrangements with numerous colleges, including Tulane, Purdue, and the University of North Carolina, which faithfully encourage their tuition-paying students to earn their ears at the Happiest Place on Earth.

Another enchanted kingdom that employs an even larger cohort of interns is Washington, DC, where an estimated twenty thousand appear, as if by magic, every year to perform clerical duties, draft legislation, and sexually gratify more established political figures. As in journalism and publishing, where almost everyone below age fifty is a former intern, the federal government depends on unpaid labor by ambitious young people to get things done. Those who can afford to work for nothing are sometimes rewarded with staff positions. Of course, many if not most of these interns, as in the case of Monica Lewinsky, receive their highly sought-after unpaid jobs because they know or are related to someone with connections. And how does Congress, which employs about six thousand unpaid interns every year, get away with flouting employment law? As it happens, the Congressional Accountability Act of 1995 specifically exempted congressional interns from the protection of the FLSA.

No such exemption applies to Washington’s vast nonprofit sector, however, where long, unpaid internships are unavoidable if one wishes to make a career serving the public interest. Only those who can afford to work for free need apply. As one of Perlin’s many informants tells him, “Nonprofit work is for the rich.” A strong class skew infects not only the government but much of the public-interest sector, as well as the rapidly declining profession of journalism. The internship model has the effect of reenforcing the overwhelming bias of our political system in favor of the wealthy.

It is this deeper class logic that particularly troubles Perlin. Unpaid internships function as a class filter, ensuring that the children of the affluent and well connected are overwhelmingly represented in our elite cultural institutions. In addition to politics and journalism, the internship model predominates in the art world, book publishing, Hollywood, television, the music business, and many other industries that were traditionally prolabor. Increasingly, even public school teachers, who do not enjoy particularly high wages or status in our society, work as “student teachers” before gaining permanent positions. The basic issue, which is well articulated by Perlin, is that offering or being compelled to work for free is a paradigmatic example of an unfair labor practice; it creates a toxic race to the bottom as ever more desperate workers compete with one another to drive wages down. The internship economy demonstrates that wages, like interest rates, are capable of dropping to less than zero.

Perlin recognizes that illegal, unpaid internships can lead to paying jobs. But to respond, as I might have before reading this vigorous and persuasive book, that working without pay for a few months can be an excellent investment is to miss the point. Although I no doubt made an economically rational decision many years ago to abandon my doctoral dissertation on Spinoza for an unpaid magazine internship, it would be far better if employment laws were strictly enforced and that valuable on-the-job training were available to those who don’t have a fellowship stipend or some other means of support. The fact that many individuals can point to significant career benefits from their investments in unpaid labor does not touch the larger argument from inequality.

Perlin’s book is not without flaws; his writing is not uniformly excellent, and the “Intern Bill of Rights” that he appends is a bit corny. Aside from such minor defects, perhaps the book’s worst sin is its clichéd title, which is also misleading, since the socioeconomic pathologies he identifies stretch far beyond the borders of the United States. Perlin calls our attention to the attempt by France in 2006 to impose a new employment contract that would have allowed employers to fire workers under age twenty-six, for any reason, during their first two years on the job. Massive street protests by interns and students ensued, the government retreated, and France’s huge population of interns won the right to earn a wage. After spreading from the United States to Europe, the global internship racket has taken root in Asia and the Middle East; now Pakistani generals and Saudi princes send their children to America for internships while American young people pad their résumés in Africa and China.

More troubling than the follies of the rich are the stories of intern abuse, both at home and abroad. Perlin’s most extreme example comes from China, where this typically American form of exploitation has been distilled to its predatory essence. In 2010, as part of a campaign to woo the Taiwanese manufacturing giant Foxconn, the government of Henan province ordered one hundred thousand vocational students to work in the company’s Guangdong factories as “interns.” It seems that a rash of suicides among Foxconn workers had led to a labor shortage. These students were given little notice, and no choice, before they were shipped out to Shenzhen for three months to assemble iPhones, Kindles, and PlayStations. Not even at Disney was the kinship of internship and servitude made so clear.

Yet many well-designed, competitive internships face a serious problem, unless the employer in question is too small to be subject to the FLSA. If an internship fails to pay minimum wage, there’s a very good chance that it is illegal, whether or not the employer is a nonprofit and regardless of the fact that unpaid employees take such jobs voluntarily. Perlin’s research suggests that the primary obstacle to a wave of lawsuits is simply the reluctance of unpaid workers to file complaints. Although the law is not particularly ambiguous, enforcement has been lax, primarily because the Wage and Hour Division of the Department of Labor, like the enforcement divisions of other regulatory agencies, has been understaffed and underfunded for many years. However, in 2010 the Labor Department announced that it was cracking down on employers. But despite headlines such as “Obama’s War on Interns,” so far there is scant evidence of change.

The problems Perlin identifies go deeper than the failure of the Wage and Hour Division to do its job. The more fundamental issue, as he argues in his final chapters, is the growing contingency of the global workforce. Over the past decade, a loose coalition of labor activists, chronic interns, immigrants, downsized workers, migrant laborers, artists, and others trapped in temporary work arrangements have begun to define “precarity,” the precariousness and insecurity of being without permanent or stable work, as the labor issue of our time. Activist groups, with names like Precog, Precariat, Génération Précaire, and Precarias a la Deriva, have sprung up across Europe, all joined by a refusal to submit passively to the disappearance of decent jobs, pay, and working conditions. Here we begin to glimpse the radical underbelly of the allegedly liberating world of entrepreneurial free agents, the underemployed and increasingly militant counterparts of the jet-set globalizers celebrated in the pages of our most luxurious business, shelter, and travel magazines.

As the value of honest work has been steadily diminished in our highly abstract and securitized economy, by far the greatest share of status and wealth has accrued to those in the corporate overclass who perform the least socially useful tasks. Economic inequality today exceeds the extremes of 1929, and job insecurity is worse than at any time since the Great Depression. Interns and their analogues replace secretaries, receptionists, mail clerks, personal assistants, and fact checkers—all of whom now join artists, writers, adjunct professors, substitute teachers, musicians, immigrants, bloggers, and other marginalized inhabitants of a subordinate, involuntary gift economy whose work allegedly deserves little or no monetary compensation. Meanwhile, our purported representatives in Washington plot to dismantle the last vestiges of the welfare state, spreading economic insecurity and creating a negative multiplier effect by cutting state spending on tangible goods and services, even as derivatives speculators and mortgage banksters continue to enjoy the benefits of state-sponsored bailouts of their fraudulent financial enterprises. The remains of the embattled middle and working classes have less in common with this wealthy minority than they do with the global precariat, into which they are ever more likely to sink. One can only wonder whether material self-interest will ever truly animate democratic politics.

Roger D. Hodge is the former editor of Harper's Magazine and the author of The Mendacity of Hope: Barack Obama and the Betrayal of American Liberalism (Harper, 2010).

ideefixe

May 26, 2011
11:25 am

join artists, writers, adjunct professors, substitute teachers, musicians, immigrants, bloggers, and other marginalized inhabitants of a subordinate, involuntary gift economy whose work allegedly deserves little or no monetary compensation.

Being an "immigrant" isn't a job. It's a legal status. Blogging may or may not be a job. Laundry list of people who don't make much money isn't the same.

Joop

May 27, 2011
11:27 am

If you require all internships to be paid, many internship opportunities that are currently unpaid will disappear. Do you think that all non-profits have the money to pay their interns? I don't. I had internships at several nonprofits when I was younger. The experience was valuable and I know the nonprofits did not have the money to hire me. It was work for free, or go do something else. Do you recommend that all soup kitchens pay their "interns" the minimum wage of $7.25/hr? That's a good way to make sure the homeless starve.

It's a similar issue for businesses. It takes time, resources and money to hire, train and manage interns. For many interns, if they only work for a summer or one semester, they might not reach a point where they will be trained well enough to make a significant contribution to a business. Force businesses to pay their unpaid interns and I'm sure some businesses will say it's not worth hiring them in the first place. That doesn't increase equality. It just destroys job opportunities.

You mention human rights in your article. What about the right to freedom? I think a person should have the right to offer an employer his services for free in exchange for some job experience and networking opportunities. Perhaps the experience will prove worthwhile, perhaps it won't be. That's a risk with taking any job. And if someone wants to pay $40,000 for an internship, I see no problem with that either. That could prove to be a far better investment than spending that money on college.

Phil in the mountains of Kyushu, Japan

May 27, 2011
12:22 pm

Reversing the biz culture strangling of America can only begin in all "higher ed" where it grows.

This means, first, closing down all the biz schools — all — and forbidding them on campuses ever anymore.

But academe hosts the corporate imagination for deeper reasons than the obvious strangulation by the ethics-free biz schools. Corporate ethics prevail across the even-apparently liberal departments insofar as they, too, model the corporate silo practices of departments in mutual isolation from each other. The tenured like this — it ensures the lack of accountability which worsens by the distance from all "other" perspectives.

So, please: in all the social sciences and "humanities," end the mutual isolations. Oblige the privileged to quote outside their silos.

Yes, wider referencing outside of "disciplines" obliges better literacy. OK — let's aim for it. Aim for wider quoting — more acknowledging of other disciplines, other cultures, actual humans, too — actually in each classroom or across campus. In lectures, oblige profs to have read student writing, and to refer to it appropriately to enlarge context of the material at hand.

There's so much people in "higher ed" could do. Except people there by and large have fallen thrall to the biz culture and corporate imagination that increasingly rule — with inflated admin, increasing de-personalized conceits of specialist voice, and the increasing use of adjuncts, part-timers, and other gypsy forms of teaching which shows the same vices of the internship culture this book under review now reveals.

cewing

May 27, 2011
1:16 pm

This is a great review. I'm looking forward to reading the book.

Corporations' over-use of temps and part-time employees (who don't get benefits, are easy to fire, and won't rock the boat for fear of losing what little employment security they have) goes hand-in-hand with these issues.

You can't maintain corporate profits without cheap labor, whether it's slaves, immigrants, prison workers, 3rd world sweatshops, or over-educated temps/interns/part-timers. It's been true ever since the first incorporation and the powers-that-be see no reason to change things now.

mftill

May 27, 2011
5:12 pm

Interning for muckety-mucks in D.C.—from the Pres on down—is payback to connected, contributing parents. Mommy and Daddy pay for the line on the kid's resume, in the same way they pay tuition at the Ivies. Don't you babies know that's how ALL of your national gummint works?

Weyl Tensor

May 28, 2011
5:54 am

"Perlin calls our attention to the attempt by France in 2006 to impose a new employment contract that would have allowed employers to fire workers under age twenty-six, for any reason, during their first two years on the job. Massive street protests by interns and students ensued, the government retreated, and France’s huge population of interns won the right to earn a wage."

Those "student protestors" (in which bad apples actually managed to a trash few university floors and libraries IIRC), may have managed to retain their "right to earn a wage".
Unfortunately it's useless because there are no jobs to earn a wage on.

Youth unemployment in France is above 20 percent, and that's not counting "hidden unemployment" of people hanging around schools for a few years more in order to defer getting into the job market. It's not astonishing really, as the french economy is extremely risk averse, unionized and bound up in bales of legal red tape, not to mention heavily taxed.

Anyway, a backlink:

http://blog.mises.org/17112/unpaid-internships-labor-legislation-and-inequality/

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