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Conde Nast headquarters. (PHOTO: TED VAN PELT/FLICKR)

The ‘Exploitative’ Internship Economy

• November 21, 2013 • 2:00 PM

Conde Nast headquarters. (PHOTO: TED VAN PELT/FLICKR)

Law professor and intern labor rights advocate David Yamada shares his take on Condé Nast’s decision to end its internship program and the debate over intern rights and wages.

When it comes to the debate over unpaid internships, law professor and intern labor rights advocate David Yamada has been ahead of the curve. In 2002, Yamada analyzed intern employment and found issues of pay and protection from harassment to be “chief among the legal issues implicated by the intern economy.” More than a decade later, Yamada sees an intern rights movement growing in response to many of those unresolved issues.

Project Intern recently sat down with Yamada at his Suffolk Law School office to talk about the issue, how it’s evolved over the years and how his perspective on internships has changed. We followed up again to get his thoughts on Condé Nast’s decision to end its internship program amid an ongoing lawsuit from former interns. Here’s what he had to say.

This interview has been edited and for clarity and brevity.

How has the internship issue evolved in recent decades?
During the last three decades, I’ve seen how internships have become a more or less expected middle ground between traditional classroom education and entry-level employment for individuals who are seeking entry into certain professions and vocations, and with that has come the real explosion of unpaid internships as being sort of the primary standard-bearer for that intern economy.

“When I was a young collegian, back in the ’70s and ’80s, very few people did internships, and I saw it as kind of a sexy exotic thing to do that I never got to do, and I kind of envied folks who got to do internships.”

How would you characterize the emerging issues, legal or otherwise, that might have some bearing on how this issue is playing out?
Well, legally speaking, I think the main focus right now is on whether or not unpaid internships violate the Fair Labor Standards Act’s minimum wage standards. So we have some lawsuits now that are heading to the Second Circuit Court of Appeals, and the decision that the court renders on that is going to have a major impact on whether or not those internships are deemed to be illegal in terms of that unpaid status.

Issues under that are the status of unpaid internships in the non-profit and public sectors, and thirdly, the question of unpaid internships and their relationship to educational institutions, especially colleges and universities that are playing a matchmaking or sponsorship role.

Another issue, apart from the question of whether or not unpaid internships are illegal is the question of whether or not interns, paid or unpaid, have standing to sue under discrimination and sexual harassment laws. That question, too, is largely unresolved under the law, and I think during the upcoming years we’ll see a sharper focus on that, hopefully in a way that will ensure that interns regardless of their pay status are covered by those protective laws.

What is your initial reaction to the news that Condé Nast will halt its internship program?
I was disappointed but not surprised. Disappointed because a company like Condé Nast, which publishes high-end, big-budget magazines, certainly can afford to pay its interns the minimum wage. It also strikes me as being very shortsighted. They have an opportunity to evaluate promising candidates for future employment and to help train the next generation of writers and creative people, while gaining the benefit of their work. It could’ve been a win-win, but they opted for the lose-lose.

This move is often cited as one potential drawback to calling for an end to unpaid internships—do you think it will trigger other companies who are facing pressure for internship compensation practices to do the same?
I think it’s a toss-up in terms of what will happen next. Some companies may end their internship programs; others will realize that paying at least the minimum wage is a mutually beneficial move.

Do you think this might affect the pending lawsuit against this company, or those against other companies?
While I can’t get into the heads of judges and speculate on how current events affect their legal analysis, the questions of compensation as set out by the Department of Labor and the courts seem pretty clear cut as to the key factors to be considered. The Condé Nast decision shouldn’t affect judicial and administrative rulings if the standards are properly applied. However, it’s possible that federal and state labor departments will be under increasing pressure from corporate interests to ease off on any enforcement efforts concerning unpaid internships. This may become a more political issue as the intern rights movement gains steam.

Overall, do you anticipate any reduction in internships as a result of increased scrutiny of intern wages and treatment?
I think we’re in a period of potential restructuring of what we’ve been calling the intern economy. Similar to what we’re seeing with health care, there will be some disruption and uncertainty as all this shakes out. It may mean a reduction in the net number of internships offered, but that reduction affects everyone equally in terms of supply. In addition, given the NACE studies showing that unpaid internships may carry less clout in the entry-level job market, it’s far from clear that an overall reduction in unpaid opportunities will have a negative effect on individual employment prospects.

Could you elaborate on the role that colleges play in the intern economy?
Typically, colleges and universities serve as matchmakers of sorts between internship providers who are looking for interns and their own students. In some cases, those internships are arranged for academic credit with the school playing a little bit of an oversight role between the intern and the employer.

In other cases, the universities plays what I’d call a “pure” matchmaking role: They list an internship in their career development office, the students can apply as their interest dictates, and it’s really more of a job or internship broker arrangement.

Is there potential for problems in that kind of relationship between colleges and internship providers?
I think the question of university and college sponsorship of internships is problematic on both ethical and legal issues.

The ethical issue is whether or not internships for academic credit should be charged full tuition. We’re at a point in our history where college tuition has just gone through the roof, and the idea of charging full tuition for granting academic credit for internships that involve work that is primarily farmed out or done at a third party site strikes me as being problematic.

On the legal end we have the question of whether or not unpaid internships are legal generally, and then if the university serves as that matchmaking or sponsoring role, whether they are playing a role in possibly enabling internships that violate the law. I think, again, it’s very complicated. The question depends in part on how the appellate courts will resolve the issue generally, on whether unpaid internships are illegal under the Fair Labor Standards Act, especially for private sector employers. And then we’ll get to the questions of whether or not these internships in the non-profit and public sectors implicate the Fair Labor Standards Act, as well.

If there is a student who might have questions about the legality or compliance of a situation he or she is in, what options are available to them?
They can … think about approaching employment lawyers on this question. But there’s sort of a reality check here: I think anyone contemplating challenging an unpaid internship in terms of whether or not they should be paid under the law, there are some risks involved, frankly, and that includes the publicity of being known as someone who took the employer to court and any ripple effect on their employability on future references and job opportunities.

I think it’s for that reason that these lawsuits that are being filed that are challenging unpaid internships have been very courageous, frankly, by people who are taking some risks, and I have a lot of admiration for them because they’re maybe creating some change that will benefit a lot of people—thousands of people, perhaps—in years to come.

What word or phrase would you use to describe your perspective on internships?
I’ve come to see my attitude toward internships as transitional. When I was a young collegian, back in the ’70s and ’80s, very few people did internships, and I saw it as kind of a sexy exotic thing to do that I never got to do, and I kind of envied folks who got to do internships. (Yamada said he didn’t intern as an undergraduate, but he did hold several internships—both paid and unpaid—as a law student.)

Fast forward to today, we’ve got an intern economy that basically expects people in college to start piling up internships on their resume, often times without compensation, and so I’ve now come to view this practice as being exploitative at times and not nearly as attractive as I saw it some 30 years ago.


This post originally appeared on ProPublica, a Pacific Standard partner site.

Casey McDermott
Casey McDermott is ProPublica's Kickstarter intern, reporting on the intern economy. Before joining ProPublica, Casey interned at The Chronicle of Higher Education and USA Today. She graduated from Penn State University in 2013.

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