Unpaid Internships: What You Should Know About Working For Free

unpaid internshipsSince graduating from Yale in 2010, Catherine has had five internships, all at New York nonprofit theater companies. Four were unpaid positions. One of them, which was "approaching a full-time schedule" over six months, gave her a $600 stipend. To make money, she also worked as a nanny, an after-school teacher, and a theater camp counselor.

Despite working more than 40 hours a week, Catherine, who asked that her surname not be published, struggled to support herself. One month, she borrowed a few hundred dollars from her younger sister in college to pay rent.

Still, Catherine doesn't regret taking the unpaid positions.

While the unpaid internships were "a bit like indentured servitude," she says that she learned a lot. "I now know how to run a theater company," she says. The experiences also gave her a bunch of contacts and a bursting resume. "I'm proud of them," she adds.

A Devil's Bargain

An unpaid internship is the devil's bargain that many new grads face on entry to the labor market, especially in the "glamour industries," like theater, film, fashion, publishing, sports and TV. Students get real life experience, a glittering name on the resume, and contacts that can be mined later for jobs. In exchange, many economists say that unpaid internships depress wages and sharpen class divides. Many lawyers say they're illegal.

Ross Eisenbrey, the vice president of the Economic Policy Institute think tank, recently took his campaign against unpaid internships to "The Colbert Report." "We had something like that back in the South about 150 years ago," Colbert said. "We had a cotton internships down there."

According to the U.S. Department of Labor, the law requires that unpaid internships be primarily educational, and can't involve any work that would otherwise be given to paid employees. Internships, in short, are there to benefit the intern, not the employer. And at the end, those interns are trained potential hires whom the employer has spent a few months auditioning.

You Worked, You Earned

Some former interns claim that their jobs clearly didn't meet this criteria.

  • Lucky Bickerton, a former intern at "The Charlie Rose Show," sued Charlie Rose and his production company last week on behalf of the "substantial number of unpaid interns" who toiled on the show for less than minimum wage. Bickerton says that she spent three months working 25 hours a week alongside 10 other unpaid interns, performing background research, escorting guests, breaking down the set, and cleaning the greenroom.
  • A former Harper's Bazaar intern filed a similar lawsuit last month. Xuedan Wang claims that she spent three months working between 40 and 55 hours a week -- coordinating deliveries and pickups of fashion samples, maintaining records on them, and processing reimbursements.
  • Two recent grads sued Fox Searchlight Pictures last September, after working for free on the hit drama "Black Swan." One of the plaintiffs, Alex Footman, who graduated Wesleyan a year after Bickerton, says that he worked on the movie for five months after graduation, preparing coffee, keeping the coffee pot full, taking lunch orders, distributing lunches, taking out the trash and cleaning the office.

The law firm Schneider & Rubin even opened last December to focus exclusively on unpaid-intern lawsuits. "You worked. You earned," reads a tagline.

Should You Take It?

But for many young people, a lingering question remains this intern season: If you land a highly competitive, highly impressive, and totally sweet internship that's unpaid, should you take it?

"From the political standpoint -- no," says Laurel Touby, the founder of Mediabistro.com and an investor and adviser to small companies. "If you're thinking about the group, and benefiting everybody, you should turn them down. If we all turn them down, people will have to start paying for the value of internships."

But Touby thinks the fact that interns might end up doing drudgery is a non-issue. "It's not like they're dying. It's not like hazing, where they're being forced to drink to death," she says. "So what if they're doing something menial and boring? Life is like that."

While these kids are delivering lunches, she notes, they're racking up a lot of experience and connections. The real issue, she says, is "no one but rich kids can get these damn internships."

While Catherine, and many other unpaid interns, take on part-time jobs to make ends meet, working for free is much easier if you have a helping hand. Footman, who's suing Fox Searchlight, admitted to Business Insider that most of his costs over those five months were covered by his parents.

The Privilege of Working For Free

Despite these ethical and legal questions, most candidates for those jobs aren't balking at unpaid internships. They're clamoring for them. Since the recession, unpaid internships became even more competitive, as laid off middle-aged workers, with no other options, joined the party too. "Everyone is caught in a so-called race to the bottom," Ross Perlin, the author of "Intern Nation: How to Earn Nothing and Learn Little in the Brave Economy," told AOL Jobs. "They're underbidding people a couple years older than them."

Unpaid interns have even entered the world of real estate, reports The New York Times, an industry where entry-level agents make money only sporadically. They labor away in the federal government and nonprofit sector too. Some parents go so far as to pay services thousands of dollars to secure their children unpaid internships at big name companies.

Unpaid internships have become the only entry point into many competitive industries, unless you happen to have a powerful uncle. Touby admits that "from a practical standpoint," it makes sense to accept an unpaid gig.

"People cross picket lines all the time, for reasons they can't control," she adds.

The Trade-Off

With these lawsuits casting a shadow over the current intern season, anecdotal reports suggest that employers may be shying away from unpaid offerings. However, a brief surf through Intern Sushi, a new website connecting students with internship opportunities, paints a starkly different picture.

The site focuses on opportunities in the media and the arts, and of the 60 or so companies advertising internships on the site so far, only five of them -- AOL Huffington Post being one -- offered to pay. A further six promised a stipend.

"I really think companies are looking at what's happening in the media, and are revising their programs," Shara Senderoff, the founder of Intern Sushi, told AOL Jobs. But they "lean heavy on the college credit side."

If companies switch to a paid intern program, it's simple math that a few of those intern slots will evaporate. "They might have hired 10 before," says Senderoff, "but now that they're fully paying their interns, they're only hiring three."

And some employers, like a small non-profit theater company, probably couldn't afford to hire any at all. Someone like Catherine, who is trying to get the experience and contacts to build a theater company of her own, would probably miss her "indentured servitude."

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