Work Minus Pay

Obama “Summer Jobs+” program touts unpaid internships despite administration’s pledge to crack down on practice

June 1, 2012

Barack Obama has turned to industries accused of taking advantage of young workers in an attempt to fulfill his promise of a better future with lower unemployment and student loan interest rates for young Americans.

The president’s "Summer Jobs+" program looks to put at least 180,000 young people to work in internships for major companies. However, only 70,000 of those opportunities will offer young workers any type of pay, according to the Department of Labor, which runs the program.

Three companies advertising on the program’s jobs board are also being sued for using interns as free labor, rather than providing them with a learning experience to carry with them into their career.

The jobs bank includes unpaid internships at Hearst Corp., PBS, and Fox Searchlight, which are accused of using unpaid interns to fill out the roles of paid employees, according to a Washington Free Beacon analysis.

PBS has several opportunities posted in its Arlington and New York offices’ marketing and legal departments and offers college credits rather than salary. Hearst Corp., parent company of Harper’s Bazaar, is also recruiting unpaid interns to work at ESPN, in which it holds a 20 percent interest. Fox Searchlight appears to be the only of the three companies offering paid work.

The announcement that the vast majority of job bank positions will offer perspective employees volunteer work bothered Elizabeth Wagoner, an attorney at Outten & Golden who filed a class action lawsuit against the three companies.

"It seems strange to me; these are the people who should be concerned [with labor violations]," Wagoner said. "I don’t know how they reconcile the [program] with their job as an enforcement agency."

The administration did not always embrace unpaid internships. Nancy Leppink, who heads the Labor Department’s division on hourly workers, called such internships illegal in 2010.

"If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law," she said.

Ron Meyer, a program officer for the conservative Young America’s Foundation, said the administration’s policy is "nothing short of inconsistent."

"Two years ago the Department of Labor said it was going to crack down on internships to make sure they were paid," he said. "Now they are trying to pad their jobs numbers with unpaid internships. It’s a gimmick."

Meyer runs YAF’s "Youth Misery Index," which monitors the financial burden of young people by combining national debt per capita with average student loan debt and the youth unemployment rate. The index may explain why Obama’s popularity among young voters, who turned out for him in record numbers in 2008, fell to a record-low 48 percent in April.

"The economy is failing young people on both ends. The college system is sticking you with a lot of debt and not giving you the tools for the marketplace, and the economy is not providing you with the opportunity to pay back that debt," University of Tennessee law professor Glenn Harlan Reynolds said. "Risk-averse employers do not want to hire young people, and you can understand why, with increased regulation and costlier healthcare benefits."

America produces 1.5 million interns each year, according to Ross Perlin, author of Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy. Many of those opportunities are part of a "pay-to-play industry," where young volunteers receive no salary while living in some of the nation’s most expensive cities hoping to get a foot in the door.

"They’re concentrated in these expensive cities where jobs are, but the glamour industries—media, fashion, TV, music—are more likely to be unpaid and less likely to lead to a job in the end," Perlin said.

Those industries are also among the most profitable and politically well connected. Media executives took in record salaries in 2011, according to an Associated Press review, and a number of top executives have hosted fundraisers for Obama, who has raked in more than $2 million from the sector, according to the Center for Responsive Politics.

The industry’s wealth could provoke a reaction among even more young people, according to Perlin.

"With rising tuition, continuing unemployment, and downward mobility, we are now at a historic turn, and people are more willing to stick their necks out and speak for an entire generation," he said.

The downturn has led frustrated interns to do what many of their peers have not done: speak up. At least four former interns have filed suit against PBS’s Charlie Rose Show, Hearst Corporation’s Harper’s Bazaar, and Fox Searchlight in connection to the production of the blockbuster Black Swan.

Wagoner said companies use interns to fill the gaps of entry-level workers whom they would otherwise have to compensate through wages and benefits, a direct violation of Department of Labor guidelines.

"People are desperate to find ways to distinguish themselves, especially in these influential industries" she said. "These industries are not creating entry-level work because they have interns performing necessary, valuable work."

Department of Labor spokesman Dave Roberts defended the Jobs+ program’s reliance on unpaid internships, saying it was important for developing work skills among young people and curbing unemployment.

"The administration has always had two distinct commitment goals: 250,000 opportunities overall, including 100,000 paid opportunities. Unpaid commitments are counted towards the first goal but not the second," he said in an email.

Paid or unpaid, young people will step up to fill such roles, according to Perlin.

"The intern has changed," he said. "They’ve gone from something you do once, maybe twice in college to prerequisite to getting a job; the recession has badly exacerbated this."

While Obama has pledged to lower student loan interest rates, he has not laid out specific plans to target youth unemployment—which sits at 17 percent nationally, with nearly half of recent college graduates underemployed or unemployed—beyond the Jobs+ program.

Reynolds sees politics at work.

"People who are hit worst are young people," he said. "No one in this administration is talking about cutting social security or Medicare. The government is a big engine pumping money out of the pockets of young people and into the pockets of old people."