The legality and ethics of volunteer internships

A lot of people are working for free these days.  Many are students who are securing unpaid internships as a possible investment in a future career.  Others are unemployed and want to gain experience and contacts, so they are volunteering their time and talent.   They are heeding advice by career counselors and columnists to offer to work without pay as a way of opening doors to new jobs and careers.

From a practical standpoint, I don’t blame anyone for using the internship/volunteer route to enter or re-enter the workforce, especially in today’s difficult economy.  As an educator, I have given that advice many times to students and recent graduates.  But I do so with ambivalence.  Something is very wrong with our economic system when those who provide genuine labor are not compensated for their work.  While I can understand public and non-profit employers having to rely on unpaid interns, it is wrong when profit-making enterprises do not pay at least the minimum wage.

In addition, it’s very likely that many of these arrangements — especially the common practice of unpaid internships — violate minimum wage laws.  The Fair Labor Standards Act, the federal wage and hour statute, does allow exemptions to the minimum wage for those who meet “trainee” status.  However, one of the requirements for trainee status is that the employer “derives no immediate advantage from the activities of the trainees or students, and on occasion his/her operations may actually be impeded.”  This is an awfully tough standard to meet.  Most interns provide an “immediate advantage” to the employer, even if the work involves relatively unskilled labor.

It’s not necessarily the small “mom & pop” businesses that are stiffing their interns.  Several years ago, in researching a law review article on the rights of student interns (see link below), I was stunned to learn that as of 2000, employers such the ACLU, Brookings Institution, CNN, Merrill Lynch, MTV, Rolling Stone magazine, Sotheby’s auction house, and the White House were among the prestigious and presumably well-financed entities whose internship programs provided no compensation.  Hopefully that has changed, but even so, today there is no shortage of other employers who happily accept free labor.

We have become so accustomed to unpaid internships as a rite of passage that we ignore the significant social and economic class implications.  Fields such as journalism (print and electronic), politics, and the arts are infamous for offering unpaid internships.  It means that these opportunities are disproportionately limited to those who can afford to work for free. 

I am skeptical that there will be any hue and cry against this widespread practice.  For students, volunteer internships have become very much a part of the educational and credentialing experience, and now many unemployed folks are joining the fray.  But is the minimum wage really too much to ask for anyone who is providing genuine work contributions to an employer?

For a freely downloadable pdf copy of my law review article, The Employment Law Rights of Student Interns (Connecticut Law Review, 2002): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1303705

Gen Wars: Boomers vs. Xers in the Labor Market

Martha Irvine, reporting for the Associated Press, writes about intensifying conflict between up-and-coming Gen Xers and more entrenched Baby Boomers in the workplace:

They’re antsy and edgy, tired of waiting for promotion opportunities at work as their elders put off retirement. A good number of them are just waiting for the economy to pick up so they can hop to the next job, find something more fulfilling and get what they think they deserve. Oh, and they want work-life balance, too.

Unfortunately, this is only the proverbial tip of the iceberg in terms of worsening generational tensions over job opportunities, especially the likelihood that many Boomers will remain in their jobs longer than anticipated due to low savings rates toward retirement and the impact of last year’s stock market crash on 401k and pension funds.  I’ll have more to say about this later, but it’s going to be a big topic in the years to come.

For Irvine’s full article, “Recession intensifies GenX discontent at work”:  http://news.yahoo.com/s/ap/20091115/ap_on_bi_ge/us_antsy_gen_xers

Labor Day Wish: A Sound, Stable Economy

This week marks the one year anniversary of the acceleration of America’s latest economic meltdown.  As we debrief the (ongoing) disaster and figure out how to respond, job losses have mounted, compensation has flattened, and retirement accounts have taken a beating.  There are signs of a turnaround, or at least of a bottoming out, but as for a true jobs recovery, well…

As a visit to the bookstore, newsstand, or popular news websites will confirm, there is no shortage of books and articles analyzing what happened.  This includes thick tomes tracing the seeds of the subprime lending market for real estate, the corporate corruption, and the government’s inaction or bad actions during the looming crisis.

Especially if your reading time is limited, skip that pile and take a look at John Kenneth Galbraith’s A Short History of Financial Euphoria (1993, rev. ed.).  It’ll give you a broader historical view of boom and bust economic cycles, written with wit and insight in a little over 100 pages.

Galbraith passed away in 2006, but he would not have been shocked at the events of 2008 and beyond.  This slim volume traces some of history’s biggest market collapses, starting with the remarkable Dutch tulip mania during the 17th century (he’s not making this up), and quickly moving to America’s big crashes of the 20th century.

Galbraith identified several common denominators in “speculative episodes” that lead to market implosions.  It starts with “an element of pride in discovering what is seemingly new and greatly rewarding in the way of financial instrument or investment opportunity.”  Those advancing the idea, at least at the outset, are praised for their vision, as others join in exploiting the riches that await them.  In reality, however, there is very little innovation: “All financial innovation involves, in one form or another, the creation of debt secured in greater or lesser adequacy by real assets.”

In some instances, a few voices in the wilderness will be questioning the speculation and predicting a day of reckoning.  They will be criticized, even shouted down, by the mob rushing to cash in on the moment.

At some point, economic gravity weighs in and the inevitable crash occurs, followed by “a time of anger and recrimination and also of profoundly unsubtle introspection.”  Much of the anger will be directed towards those celebrated “for their financial imagination and acuity” during the boom period.  Some will go off to prison.  There will be much “talk of regulation and reform,” but little discussion of “the speculation itself or the aberrant optimism that lay behind it.”

Galbraith concluded his extended essay by saying that no one could predict what “the next great speculative episode” would involve, but the one certain thing is “there will be another of these episodes and yet more beyond.”

How familiar!  And how sad for all the rank-and-file workers and their families who pay a huge price for this irresponsibility.  There are a lot of things on my Labor Day wish list, but let me use this opportunity to pine for a sound, stable economy that doesn’t use workers like chips at a rigged casino game.

Working for Free: It’s Not Just for Student Interns Anymore

An article in the Boston Globe starts by profiling a laid-off executive search firm consultant who is attempting to jumpstart her job prospects by volunteering with a non-profit agency.  The article goes on to say:

At a time when companies aren’t likely to consider inexperienced applicants, more professionals are seeking ways to beef up their resumes by volunteering for work at nonprofit agencies. Many of them are unemployed, or worried about job security. Some have well-polished skills to offer, while others, like [the profiled individual], see volunteering as an opportunity to steer their careers in a new direction.

Yup, we’re seeing it everywhere: Laid-off and unemployed workers are trying to bolster their job prospects by volunteering.

Lest I be misunderstood, I want to emphasize that volunteering to contribute to one’s community is a great thing.  But volunteering because you’re without a job and can’t obtain paid work is, well, often not so great.

However, in some cases, it may be necessary, or at least a means to an end.

Before the meltdown, working for free was considered the province of the student intern.  Now the ranks of unpaid workers are swelling with those who have a lot more experience than the typical student intern.  I hope that their efforts will translate into good paying jobs down the line.  As an educator I probably will suggest to others that they consider the volunteer route to pick up experience and contacts.

But I also know that our economy has a long way to go towards recovery if this is the approach that people are taking to get back on a payroll.  After all, something has gone haywire when people aren’t compensated for their labor.

For “Volunteers discover another path in job hunt”: boston.com/jobs/news/articles/2009/08/03/volunteering_your_way_to_a_new_job/

A legal sidebar: Several years ago I wrote a long law review article analyzing the employment law rights of student interns.  I observed that roughly half of student internships are unpaid, and I concluded that many of them are in apparent violation of minimum wage laws.  No doubt some of the volunteer arrangements for more experienced workers also are in likely violation of these laws.  To download a pdf file of my law review article, “The Employment Law Rights of Student Interns”: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1303705.

Next on the economic hit list: Public and non-profit sectors

The Great Recession is starting to cycle full throttle through the public and non-profit sectors.  Why?

In the public sector, budgets are taking a big hit as the meltdown that began in earnest last fall translates into falling tax revenues.  If you’re following the deliberations of state legislatures this year (and California in particular), you know what I mean.

In the non-profit sector, tax-deductible contributions are falling and foundations have less money to give out.  Wealthier non-profits such as prestigious universities are seeing their endowments shrinking and rainy day funds drying up.

What does this mean for the world of work and jobs in these sectors?  It’s not a pretty picture:

• Layoffs and hiring freezes
• Salary and benefit cuts and freezes
• Pressures to do more with less
• More employment-related lawsuits
• More bullying, incivility, and stress at work

And it’s likely to get worse before it gets better.

At this point, we can only hope that public and non-profit employers will heed Margaret Wheatley’s advice (http://newworkplace.wordpress.com/2009/07/14/wheatleys-call-for-fearlessness-and-engagement/) to engage workers rather than clamp down on them.  The coming years probably will be rough ones, and organizations that respond to this challenge in healthy ways will be the ones that contribute to, and benefit from, a recovery and turnaround.

How to create good jobs that enrich society: Hire artists

Finance writer Felix Salmon, writing in the July-August issue of The Atlantic, proposes that we create good jobs and reinvigorate the economy by beefing up funding for the arts.  It’ll put creative people to work, stimulate spending, and enhance our culture:

If the Obama administration is serious about stimulating the economy and creating as many new jobs as possible, one choice is clear: it should announce a massive increase in federal arts funding. Artists are among the very poorest citizens. When they get cash, they spend it both quickly and carefully. That’s not what most recipients of federal largesse do, but it happens to be exactly what economists look for in any stimulus package. Arts spending is fantastic at creating employment: for every $30,000 or so spent on the arts, one more person gets a job, compared with about $1 million if you’re building a road or hospital.

It’s a refreshing, enriching alternative to the bailout craze that has gripped us since September.

For Salmon’s short article, “Pay the Artists”: http://www.theatlantic.com/doc/200907/ideas-artists.  It’s part of a package of short features collectively titled “15 Ways to Fix the World,” well worth a look: http://www.theatlantic.com/doc/200907/ideas-index.

The Working Poor, Countervailing Power, and EFCA

Let’s face it: For most Americans, what makes a recession “bad” is that it threatens the economic security of middle-class and upper middle-class households.  The stories that keep us awake at night are those of folks who were doing fine until a job loss sent them spiraling into foreclosure or bankruptcy.

But what of the people who were barely getting by even before the meltdown?

Barbara Ehrenreich, who helped to shine a light on the challenges facing the working poor in her bestseller Nickel and Dimed (2001), caught up with some of the people she interviewed for the book to see how they were doing.  Not surprisingly, she reported in an op-ed piece in the June 14 edition of the New York Times, they were still struggling:

This demographic, the working poor, have already been living in an economic depression of their own. From their point of view “the economy,” as a shared condition, is a fiction.

This spring, I tracked down a couple of the people I had met while working on my 2001 book, “Nickel and Dimed,” in which I worked in low-wage jobs like waitressing and housecleaning, and I found them no more gripped by the recession than by “American Idol”; things were pretty much “same old.” The woman I called Melissa in the book was still working at Wal-Mart, though in nine years, her wages had risen to $10 an hour from $7. “Caroline,” who is increasingly disabled by diabetes and heart disease, now lives with a grown son and subsists on occasional cleaning and catering jobs.

The low-wage, service sector of our labor market emerged at a time when unions have been in decline.  As an important legislative response, passage of the Employee Free Choice Act will help to facilitate union formation and collective bargaining agreements.

In the 1950s, John Kenneth Galbraith wrote that organized labor exercised “countervailing power” in the battle over division of profits.  By the mid-1990s, he reluctantly acknowledged for many workers union organization “is not now a practical solution.”  Passage of EFCA won’t reverse that judgment overnight, but it will help to level a badly tilted playing field.

For Ehrenreich’s op-ed, “Too Poor to Make the News”: http://www.nytimes.com/2009/06/14/opinion/14ehrenreich.html

For a briefing paper I authored on the Employee Free Choice Act: http://www.adaction.org/media/EFCA.pdf

Earlier version published originally on June 16 on eLiberal, the blog of Americans for Democratic Action (www.adaction.org).

Happiness on the job index

Time Magazine features a “happiness index of American workers,” which allows readers “to see jobs ordered by worker happiness” in a wide range of fields and vocations.  The underlying stats are drawn from the National Opinion Research Center at the University of Chicago.  Take a look — it’s fun to scroll through the list and compare!

Link: http://www.time.com/time/2007/america_numbers/job.html

When liberal arts majors look for jobs

Liberal arts majors about to graduate, I feel your pain: Many moons ago, I graduated from college, political science major in hand, in the midst of a brutal recession.

I had decided to put off law school for a year and to spend the interim time working.  However, my good grades and a long list of extracurricular activities put me in a better position to gain entrance to law school than to obtain a decent-paying job, especially during a difficult economy.    My efforts to get a full-time “professional” position proved unsuccessful.  I would spend the year working as a stock clerk for a local drug store chain where I had spent my collegiate summers and writing occasional news articles for a local weekly newspaper.

Looking back, that year at the drug store was a valuable experience.  It taught me a lot about how people dealt with a lousy job market and a bad economy.  I was living with my parents at the time, but many of my fellow workers had families, laid-off spouses, and rents and mortgages to pay.  Despite the difficulties that many of them faced, they were a decent, hardworking, and down-to-earth group of co-workers who did their best to weather life’s ups and downs.

Perhaps my liberal arts education did not open many doors immediately after graduation, but I wouldn’t trade it away even with the gift of hindsight.  Study in the liberal arts can be excellent preparation for work and for life.  But it’s true that many employers would prefer to see a business, engineering, or computer science degree.  So, liberal arts graduates often must work their way into good positions, or — like me and so many others — pursue some type of postgraduate professional or graduate training.

The challenges of marketing a liberal arts background are not lost on today’s career counselors.  For example, if you or someone you know happens to be a newly-minted liberal arts graduate, here’s an interesting post from Katharine Brooks, director of liberal arts career services at the University of Texas:

I call it THE QUESTION. It’s a question that every college student/graduate faces unless you picked one of those “practical” majors like accounting or engineering or computer science. The employer looks over your resume and there it is: the name of your college, the date you graduated, and then…YOUR MAJOR.

Brooks advises liberal arts graduates to prepare thoughtful responses to questions about their choice of major and to think through what they can offer an organization.  Her observations are worth checking out.  For the full post: http://blogs.psychologytoday.com/blog/career-transitions/200904/you-majored-in-what.

What the NFL Draft teaches us about Personnel Selection

The National Football League held its annual draft of college players over the weekend, giving life to the dreams of some 250 young men and providing football junkies reason to spend two days glued to ESPN.  Whereas no sane person would want to watch a weekend’s worth of, say, live coverage of human resources directors extending offers to wannabe administrative assistants, the NFL Draft has become a major television sports event.

It’s also a prime example of how even the most extensive vetting of job candidates does not guarantee accurate personnel selection.  The average NFL draftee has been evaluated more thoroughly than candidates for just about any other job.  Pro scouts attend his games.  Tapes of his college games are viewed over and again by NFL general managers and coaches.  He probably was an invitee to the NFL Combine, a multi-day meat market where likely draftees are put through a variety of drills, tests, and interviews.  Teams that have a special interest in a player may invite him to a private workout.  After all this, the draft itself is more of a crapshoot than one might think.

Although early round picks do, on average, perform better than late round picks and undrafted free agents, some top draftees turn out to be massive underachievers or complete busts.  Looking at the key position of quarterback, we see many first-rounders who failed as NFL players: Ryan Leaf (San Diego Chargers), Cade McNown (Chicago Bears), and Akili Smith (Cincinnati Bengals) are three guys who were supposed to lead their teams to glory, and they all flopped.  By contrast, a skinny sixth-round pick named Tom Brady would become one of the league’s top quarterbacks and lead the New England Patriots to three Super Bowl championships.

To diehard NFL fans, this is old news and part of the league’s lore: Star selections bomb out, while some at the bottom of the pickings make the team and even become standouts.  But those in the field of employee relations would be well-advised to look at the NFL Draft as a prime example of how imperfect even the most extensive of personnel selection practices can be.