The United States Department of Labor recently announced new regulations concerning unpaid internships, making it easier for for-profit employers to hire interns without offering compensation.
The new rules by the U.S. Labor Department install a “primary beneficiary test,” endorsing seven elements that determine the standard for internships. One states that training is expected from the employer that “would be similar to that which would be given in an educational environment.” Another says that the intern and employer should understand that there is no expectation of compensation.
Such a feat perpetuates inequality in the United States, according to chief of staff of Pay Our Interns, Guillermo Creamer. Social mobility in the United States is among the lowest of major industrialized economies, according to the Economic Policy Institute. Many employers who don’t pay interns reason that their unpaid internship provides a valuable hands-on learning experience that is more beneficial to the intern than the company, Creamer said. Unpaid internships impact students’ economic stability in that students from relatively high-income families can get ahead of students from lower income families, who are left holding paying positions to pay expenses.
California Lawyer cited an issue of controversy that exists around compensation of an intern, in that “any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.” In other words, compensating an intern may obscure 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.”
The discrepancy has agitated thousands of interns in the recent past.
Thousands of former interns filed a class-action lawsuit in 2014 against Condé Nast, a mass media company founded in 1909 that publishes and maintains brands such as Vanity Fair, Vogue, and The New Yorker. Condé Nast agreed to pay $5.8 million to settle the lawsuit brought by the interns who said they were underpaid for working at the top-tier magazines on Nov. 13, 2014.
The lead plaintiffs on this case, Lauren Ballinger and Matthew Leib, told Reuters Magazine that Ballinger worked for around $1 per hour organizing accessories in the fashion closet at W Magazine, while Leib earned around $300 for a summer internship at the New Yorker. Thanks to these two, former interns who have been underpaid since June 2007 received from $700 to $1,900, according to the settlement.
While Chapman students understand their employers’ dilemma on whether or not to pay interns, several believe that the lack of compensation for labor perpetuates inequality.
Sophomore English major Maggie Mayer doesn’t have to contribute to her rent or tuition because of the scholarships Chapman gave her, but has worked at Starbucks for 20-30 hours a week for over a year to pay for everything else.
“Even if I had a car an unpaid internship wouldn’t be possible,” Mayer said, “I’m already juggling too much coursework with my paying job. I’m always jealous of people who have the resources and time to find an unpaid internship.”
Mayer found a loophole for the coming summer in the form of an internship grant. She submitted clips of some of her writing and won a couple thousand dollars to cover her internship for a local newspaper in Tahoe, California.
“I also think it might be easier to get internships in certain fields over others,” Mayer said. “All these Dodge kids are doing crazy things in LA, but some opportunities seem thinner in other areas. And I’m not a low income student, but not having a car and having too much on my plate makes it very difficult.”
During the 2016-2017 academic year, Chapman was partnered with 1,114 internships that were registered for credit. 767 of those were unpaid, 311 were paid and 36 had some other form of reimbursement, according to Chapman University’s Career Development Center.
The Career Development Center at Chapman University advises students who can’t afford to take on unpaid internships to look for part-time jobs in their industry of choice, according to career educator Janelle Farkas.
“Just because something isn’t listed as an ‘internship,’ it doesn’t mean the student can’t get valuable experience out of it,” Farkas said. “As long as the student can articulate transferable skills, the job is of value.”
When a student is unable to find a part-time job in their industry of choice, Farkas asks them what types of jobs they are willing to seek in order to make money, and walks them through the process of applying to those jobs, which are usually in retail or the restaurant service. Next, Farkas suggests the student look for volunteer opportunities or on campus research opportunities with professors that are related to what they are looking for.
“It’s not ideal, but it still allows the student to make some money with a part-time job, while still gaining some exposure in their field of choice,” Farkas said.
The CDC looks at this issue on a case by case basis, as what works for one student wouldn’t necessarily work for another, according to assistant director Susan Chang.
Junior business major Iker Belausteguigoitia is currently working for free for Wilsher Financial Network as a real estate investment intern. Belausteguigoitia said he pays his own tuition and rent using money he earns by working as a real estate agent in the summer.
“I’m only doing it because I can get three credits for school, and if that weren’t the case, I definitely wouldn’t be working unpaid internships,” Belausteguigoitia said. “This summer I’m only looking for paid internships because if I’m not getting paid, it’s not worth my time.”
Belausteguigoitia believes that unpaid internships create an income gap between students from wealthy families and students from middle-class families who can’t always afford to work for free.
“It’s also in the employer’s best interest to pay interns on a need basis,” Belausteguigoitia said. “They would be working with students who are more appreciative of the money as they’ve gotten less from their parents.”
Butterfly Social Media, a company that provides marketing assistance to businesses with the help of social media managers, marketers, editors, photographers, and videographers, works with interns who need to learn the ropes of the marketing industry, according to Sondra Barker, director of public relations and social media strategy.
Butterfly Social Media teaches students marketing techniques not taught in college classes, such that students essentially receive a free course and college credit to work for the company, Barker said.
“Asking why interns aren’t compensated is like asking your school why they don’t pay their students to go to class,” Barker said. “Full time employees take time from their work and free time to train students. This is a learning experience in which the student is essentially receiving a free course and college credit to work for our company.”
Butterfly Social Media charges clients thousands of dollars for the same training and information students learn from their internship program, Barker said.
“This is not an easy industry to get into, and requires a specific skill set and work ethic that most students don’t have,” Barker said. “To expect cash compensation for an internship which you’re not qualified for is an entitled millennial attitude.”
While companies who pay their interns are technically advocating for the cause, Pay Your Interns is the only organization that is working toward getting paid internships up and running by meeting with nonprofits and members of Congress, Creamer said.
“We have an influx of students from wealthy families working unpaid internships and students from lower socioeconomic backgrounds being barred from reaching their potential,” Creamer said. “Those students tend to be students of color and first generation students.”
Many staffers in Congress have attested that they were once an unpaid intern, suggesting that if a person can’t afford to be an unpaid intern they’re less likely to quickly jump into working on the hill, Creamer said.