Former Black Swan interns declare war on unpaid internships

A black mark against Black Swan?

The war on unpaid internships is heating up. Two unpaid interns who worked on last years' blockbuster noir-ballet flick Black Swan recently filed a lawsuit in Manhattan's Federal Court against Fox Searchlight Pictures alleging breaches of the Fair Labor Standards Act related to minimum wage and overtime. The Department of Labor's Wage and Hour Division has developed a six-fold test to ascertain the legality of internship schemes; the test itself is rooted in the 1947 United States Supreme Court decision in Walling v. Portland Terminal Co. Essentially, the test boils down to whether the internship is a bona fide training program that mainly benefits the intern and doesn't immediately benefit the employer.

This lawsuit is an excellent development as it shines a light on the exploitative and problematic nature of unpaid internships. This type of employment has skyrocketed over the last thirty years in Canada, the United States and England. Now we're in the unfortunate situation where young people are often forced to take on unpaid internships as a means to gaining work experience in a difficult economy. The vast majority of these unpaid internship contravene the applicable workplace laws, but due to a systemic lack of enforcement of employment standards very few cases every come to light. Eric Glatt, one of the plaintiffs, recently reminisced "When I started looking for opportunities in the industry, I saw that most people accept an ugly trade-off. If you want to get your foot in the door on a studio picture, you have to suck in up and do an unpaid internship."

Adam Klein, the plaintiffs' lawyer, was quoted in the New York Times opining that: "Unpaid interns are usually too scared to speak out and to bring such a lawsuit because they are frightened it will hurt their chances of finding future jobs in their industry." This reasoning underscores the absence of access to justice that impact on workers who are precariously employed in jobs falling outside of the standard employment relationship. While precarity has been a constant theme in employment throughout history it has recently returned to prominence as governments refuse to update workplace laws to respond to the changing realities in the new economy.  This rusting of workplace laws is having a significant impact on the employment prospects of the millennial generation as employers now feel they possess a carte blanc to exploit, violate employment standards and not pay young people for their labour.

Lawsuits against misclassification of employees are on the rise as employees resort to the Courts to address employment standards violations. Employers have to understand that they run a significant risks if they are violating the law, both in terms of being subjected to legal actions and the larger reputational risk that could significantly damage public relations. It will be fascinating to see how this case progresses and it may well serve as a clarion call to other unpaid interns to confront their employers about the exploitative nature of their employment. For some of my previous articles on the unpaid internship phenomena see: here, here and here.

Generation Free: Are universities perpetuating inequality by promoting unpaid, precarious work?

Internships are a hot topic of discussion on campuses this fall given the release of Ross Perlin’s Intern Nation and interest from the media over the summer (see: here, here and here).

One area that isn’t getting a lot of discussion, however, is the cozy relationship between employers and post-secondary institutions that has entrenched and normalized unpaid internships as part of the school-to-labour market transition. The Internsheep Blog recently ran two articles, one analyzing the internship postings on York University’s Career Centre website, and another presenting the response from the Centre after being questioned about the legality of certain position.

This post will explore a number of the dimensions that make unpaid internships problematic, and address the linkages between employers and the post-secondary education system.

York University’s Career Centre website has posted over one hundred unpaid internships available for students. These unpaid internships are offered by organizations like Bell Mobility, Trade Secrets, RBC Dominion Securities and the American Consulate General in Toronto. These internships may be illegal, as many appear to breach the six-fold test (reviewed by Professor Doorey in this post) enumerated in subsection 1(2) of the Employment Standards Act, 2000 (“the ESA”).

A review of the responsibilities of interns reveals that employers are clearly deriving benefit from the work of interns through job duties such as: creating financial plans for clients, monitoring print and broadcast media, designing applications for Blackberries, and even data entry for customer contests.  One of the key factors defining a lawful unpaid intern is that the training being provided is for the benefit of the intern, and not the person or company doing the training.  The trainer must derive “little if any benefit” from the activities of the worker.

The exclusion set out in subsection 3(5) of the ESA for post-secondary students in an approved university program does not apply here, since these internships do not form part of any college or university program. This set of facts give rise to the concern that this is a possible example of employers mischaracterizing employees as interns to avoid their obligations under the ESA in areas like minimum wage and occupational health. It’s also noteworthy to state that a number of postings from Absolute Internship appear on the York University website.   These positions require students to pay over $6,999.00 for the opportunity to complete an international internship.

Unpaid internships present an emerging form of inequity in the labour market, as the social location of certain students prevents them from undertaking unpaid work. Family status, disability, socio-economic class, and age are all considerations that might preclude students from being able to derive the tangible benefits these internships present in the form of networking, on-the-job experience and hard transferable skills. This represents an inequality of opportunity and a barrier to social mobility since, generally, only students from wealthy families have the ability to engage in unpaid work, or possess the ability to pay for an unpaid internship. In an increasingly competitive economy, these unpaid internships present a very real path into the high-end labour market which is focused on knowledge-sector jobs, rather than the growing labour market in low-wage, low-potential jobs in the service sector.

Perhaps what is most troubling about these unpaid internships is York University’s tacit endorsement of possibly illegal and ethically questionable forms of employment. There is a deep complicity here in the exploitative arrangements that involve the university’s own students, and it appears that little thought or scrutiny has gone into ascertaining whether these sorts of job postings ought to appear on the Career Centre’s website. Ignoring the legality and taking an uncritical stance towards precarious work in the midst of a deteriorating youth labour market is not gaining the academy any credibility as a societal institution amid the crocodile tears spilled by administrators over ongoing concerns regarding student debt, affordability and constant tuition increases. As vitally important institutions in society, universities must come to the realization that they have a critical role to play in advocating for and ensuring the success of young people as they begin careers.

Whether they like it or not, universities are increasingly being called upon to prepare students for entry into the labour market; this is a role that universities have not traditionally played and one that institutionally they are not prepared to handle in any meaningful way. Perhaps unpaid internships represent a policy stopgap of sorts as universities struggle to find ways to assist students entering the new economy, especially with governments unwilling to implement ameliorative labour market interventions that could ease the school-to-work transition for youth amid calls for austerity measures rooted in the ideology of neoliberalism. This problematic situation represents a failure of key institutions in society to remedy the very real challenges facing the current generation entering the workforce, including: the disappearance of entry level positions, the rise of precarious forms of employment deviating from the standard employment relationship, and creeping credentialism. What is sorely needed is the creation of a sustained youth labour market strategy that takes a holistic and nuanced approach to creating sustainable jobs for young people in Canada. Universities clearly have a role to play in such strategies, and a good start would be taking a principled stance against the exploitation of their own students.

(Note: this article was originally appeared as a guest blog post on David Doorey's Workplace Law Blog.)

What's behind the deterioration of the youth labour market in Canada?

I recently had the opportunity to interview Sylvain Schetagne, an economist with the Canadian Labour Congress, about a number of issues such as: the deteriorating employment prospects for young people, structural labour market problems, the approach governments in Canada are taking towards public policy and the changes that have taken place within the economy. It's a thoroughly fascinating interview and sheds some light on the deep seated problems that are facing young workers in Canada. The interview appears below:

Q. Over the past three decades during recessions youth have been particularly hard hit by unemployment, underemployment and by difficulties transitioning into the labour market. What structural changes have occurred within the Canadian economy over the past three decades that have caused the deterioration in the youth labour market?

A: The search for a cheaper and more flexible labour force based on a supply-side economic development model (more producers competing worldwide for best price), linked to the ongoing movement of jobs from the goods-producing industries to the service industries (also linked to globalization), have significantly transform the labour market in Canada. As a result, many good jobs in the manufacturing sector are now gone, leaving fewer jobs opportunities for younger workers, especially for those with lower levels of education. Growth in industries traditionally providing low paid/low security jobs (food, retail, culture, etc.) combined with an increase in precarious work in many public services (health and education), have significantly reduced the quantity and the quality of jobs for young workers. Finally, the development of a knowledge-based economy, with some exception (like IT), normally benefits those with knowledge and experience (like those born after the second world-war).

Q. Are governments in Canada doing enough to address the high rate of youth unemployment? If not, what more can be done?

A: The Harper government believes that lowering the cost of doing business creates jobs. As a result, they reduced corporate taxes, reduced regulations in many industries and signed trade deals to remove trading barriers, in the hope that it will creates more jobs for Canadians, including young workers. Instead of creating good jobs for all, this policy has created more bad jobs, increased profits of corporations while not investing it in the real Canadian economy, reduced our fiscal capacity to invest in public infrastructure and services, reduced public safety of all Canadians and hurt our economic sovereignty. Many provincial governments are following this path while some others continue to invest in public infrastructure and services, like education, child care. But most have no plan to address the ongoing deterioration of the labour market for all, including young workers.

Q. Income inequality is a continuing problem in Canada and good paying jobs seem to be drying up for young people. A number of commentators have identified the possible emergence of two labour markets with one catering to high-wage, high-skills technical jobs and the other focused on the low wage, low skill jobs in sectors such as service industry. Are there any policy solutions that can be utilized to combat income inequality?

A: To reduce income inequality, we have many options, from targeting economic policies to the development of sectors offering high paying jobs, increasing access to and investment in education, improving our progressive tax system, increasing the minimum wage, improving labour standards and increasing access to collective bargaining. Many of these solutions cost little to governments while providing an environment that helps redistribute wealth.

Q. With post-secondary education becoming increasingly necessary to enter the labour market young people face the prospect of debt, delayed labour market entry, and uncertainty over the value of their credentials. What do you make of the trend of increased participation in post-secondary education and are there any problematic aspects that negatively impact on the youth labour market?

A: Post-Secondary education has become a safe haven, a place to weather the storm of a poor labour market. Young Canadians have the option to go to PSE with better prospects in the future or poor labour market outcomes today. But improved prospects can also be gain with experience in the labour market in areas outside PSE. In reality, what is the best option? A PSE for a part-time or temporary jobs and 50 or 75K debt, or a full-time jobs in a lower paid trade with no debts. It is a hard call.  

Q. Young people in Canada face a reality where they are living in the parental home longer, often need to complete unpaid internships or contract work at the start of their careers, and are putting off major life milestones like cohabitation, marriage, and buying a first home. Do you envision any long-term demographic problems arising from this "new normal"?

A: The deterioration of wages has moved us from one to two, and now two to three income earners per household to maintain or increase our standard of living. With the deterioration of the labour market, Canadians are adjusting, using a form of solidarity that many can count on and that hasn’t been attacked yet...family! I don’t see that as a demographic challenge, but as an economic adjustment.

Youth unemployment crisis brings dire predictions

Coming to North America soon?

The global youth unemployment crisis has reached the point where unusual voices have begun to chime in about the problems facing young people. Earlier today on his weekly radio show New York City Mayor Michael Bloomberg made a number of grim predictions about civil unrest and stated that: "We have a lot of kids graduating college who can't find jobs. That's what happened in Cairo. That's what happened in Madrid. You don't want those kinds of riots here." Also, Gwyn Morgan, CEO of Encana Corp, in an editorial piece today warned that "the most pervasive threat is the large numbers of unemployed youth". Neither of these commentators are voices in the wilderness, rather they represent a shifting opinion among the elite of North America's corporate and political classes that something must be done to address joblessness amongst youth. It's incumbent upon policy makers to take up this clarion call and begin the difficult process to address one of the great questions of the day as anything less will lead to scenes that no one wants to witness on the streets of North American cities.

Ontario's non-profit sector and the unpaid internship scam

The non-profit sector in Ontario is notorious for utilizing unpaid internship schemes to force young people into situations where they're illegally mischaracterized as interns when actually employees, not paid minimum wage contrary to the Employment Standards Act, 2000 and denied the full protection of workplace law in Ontario. Shaun Smith recently wrote an excellent article entitled "Internships and the Law: What You Need to Know" for Charity Village that explores the dimensions of the use of unpaid internships within the non-profit sector. A brief look at the job board of the Work in Culture website reveals numerous illegal internships with organizations such as: Ryerson University's Modern Literature and Culture Research Centre, the National Ballet of Canada and dance Immersion. Just because an organization lacks a profit motive doesn't mean that it can ignore and avoid compliance with the law. For commentary about what the law in Ontario says about unpaid internships, see: here, here, here and here.

Hudak's new radio ads are misleading, racist and divisive

Below I've linked the newest radio advertisements from the Progressive Conservative Party of Ontario. These ads are misleading, racist and speak to how far Ontario's politics has regressed over the past two decades. This is the politics of hate, jealousy and division with no message beyond anti-immigrant jingoism. Perhaps the strategy here is all attack, no substance as the Tories realize they cannot win in a straight up debate over policies. Check them out:

What can be done to address the youth unemployment crisis in Ontario?

Photo Credit: Paul Box/reportdigital.co.uk

Statistics Canada reported today that the average unemployment rate for students aged 15 to 24 this past summer was 17.2%, which is a rise from the unemployment rate of 16.9% reported for the summer of 2010 (in the three summers prior to the recession the unemployment rate for youth never surpassed 14%). These statistics reflects a broader crisis in youth unemployment in Canada that has existed since the start of the recession in 2008. Historically, students and young people have generally fared poorly during periods of economic recession since the 1970s.

Little is being done by policy makers to address problematic trend, either in terms of assessing the dimension of the problem or mapping out policy solutions that could partially alleviate the deteriorating youth labour market.  Overall the lack of a response from government reinforces the argument that many public policy decisions in Canada since the 1980's have been underscored by a broader strategic abandonment of young people. Poignant examples of such include: downloading the costs of post-secondary education onto students and families, a lack of regulatory responses to precarious employment relationships such as internships or contract work and denying the millennial generation any measure of workplace democracy through the rusting of workplace laws.

While one might think that this would be an excellent area for politicians to implement innovative policy that would assist the next generation of workers, nothing is currently being proposed by any of the three major parties that explicitly addresses the youth unemployment crisis in Ontario. Neither the Liberals, the NDP or the Tories are advancing any policy solutions to address the structural labour market barriers that youth face while entering the workforce. Unless a politician is extolling the benefits of education, young people are generally left out of policy discussions and don't seem to figure into fixes for job creation. Which is a bizarre state of affairs as young people have the most to offer Ontario's economy both now and going forward into the future.

There are a variety of responses that policy makers could implement to address the youth unemployment crisis. First Work has put forward a very modest proposal for investing in the current system of youth employment centres. This would be an excellent start in rebuilding the ability with the province to properly assist and respond to the needs of young people transitioning into the labour market. Beyond this there are certainly policy solutions available through targeted tax credits, paid internship programs, dismantling information asymmetries, greater enforcement of employment standards and updated workplace laws to discourage situations where young people are exploited by employers and greater coordination between post-secondary institutions and government to ensure there's a basic level of labour market planning occurring. The solutions exist and what's needed now are policy makers willing to take the necessary steps to properly address the structural labour market barriers that presently exist for youth.

Internsheep: The Intern Strikes Baaaaaaaack

There is an exciting, new website  devoted to exposing the unpaid internship scam being thrust down the throats of young, Canadian workers. Internsheep started last month and its goal is "To ensure that high-quality, meaningful internship opportunities are accessible to Canadian youth". It follows in the footsteps of great websites from the U.K. such as Interns Anonymous and Intern Aware, both are worth extended reads if you have any interest in the subject. Internsheep already has some great content up about the how the careers services departments at the University of Toronto and York University are complicit in letting organizations exploit students for free labour and the recent policy balloon from Premier Dalton McGuinty about interest relief for students who start their careers at non-profits. Also, there's an political action portion of the website that looks very promising.

South Park Redux: Hudak, racism and the "they took our jobs" meme

Tim Hudak, Leader of the Progressive Conservative Party of Ontario, engaged in some good ol', down home racism when he came out swinging against Premier Dalton McGuinty's proposal for a $10,000.00 tax credit for businesses that hire new immigrants. Mr. Hudak mused "Dalton McGuinty wants to pay companies ten thousand to hire foreign workers when we have half a million people in Ontario today who are looking for jobs." Job creation and labour market intervention are bizarre issues for Hudak to play offence on given that his platform on these points is embarrassingly sophomoric.

Curiously just last year Mr. Hudak authored a bill called the Newcomers Employment Opportunities Act, 2010. At the time he soapboxed: "This contains practical and affordable measures to help new Canadians find and create jobs here in Ontario. It is an example of forward thinking that is badly need and long overdue." Mr. Hudak's comments and legislative initiative in part reflected the harsh realities that immigrants face in Ontario's labour market such as: a high unemployment rate, the racialized income gap and not having foreign credentials recognized. Now a little over year later the welcoming phrase "new Canadians" has mutated into the misleading and jingoistic "foreign workers".

Mr. Hudak is correct in assessing that there is a problem with unemployment in Ontario. Indicators like job creation and labour market participation are falling amid global economic uncertainty, but these developments have nothing to do with Mr. Hudak's fanciful conjuring of hoards of imagined, job stealing foreign workers. Rather structural unemployment points to a dark place that no politician dare tread: a debate about the juncture we've arrived at through the interwoven processes of neoliberalism, financialization, globalization, and deindustrialization. In the wake of the 2008 recession as a society we have not come to grips with the conditions that led us to the brink of economic collapse and how we might avoid a recurrence. Beyond this we need to begin discussing how to create the conditions of shared prosperity with solutions that combat problems like rising income inequality, child poverty and the hollowing out of the middle class. 

One hopes elections would be a time to discuss big ideas, however, nothing indicates that the current one will be a departure from the status quo. In fact, Mr. Hudak's overtly racist, xenophobic attack on new Canadians has topped the previous low set by the subtext of Islamophobic fear mongering that dominated the 2007 provincial election when John Tory was eviscerated over his principled (but erroneous) stand on the faith-based schools issue. This ongoing moral race to the bottom is disgusting and speaks to the depravity of Canada's political class who live and die at the altar of power, partisanship and perpetual rule. The betterment of society has somehow become hopelessly old-fashioned with the rest of us wondering when the hand basket is going to arrive at its final destination. Hopefully we turn the corner and move away from cynical, divisive politics towards a system that holistically addresses the needs of all segments of society, not just those tailoring the new Emperor's clothes.

The big lie: public policy and the diminishing value of post-secondary education in Ontario's economy

Last week I addressed the crisis in the legal and education sectors related to young people seeking to enter these professions and the shifting value of their professional degrees. Later today Premier Dalton McGuinty will announce that three new undergraduate university campuses will be created in Brampton, Barrie, and Milton if the Liberal are reelected. Education has been a key area of public policy under the provincial Liberals, but beneath the partisan optics  a number of unsettling questions exist that need to be probed surrounding the diminishing value of a post-secondary degree in the Ontario economy. This post explores the linkages between politics, the post-secondary education sector, and changes to the labour market as more dialogue is needed  given the changing nature of the economy, the impact from globalization, creeping credentialism, rising income inequality, and the tuition costs being downloaded onto students and their families. 

Since World War II post-secondary education participation rates have skyrocketed in Canada and over the past two degrees there has been an explicit policy push in Ontario spearheaded by the Ministry of Training, Colleges, and Universities to get more young people to enroll in post-secondary education programs. While this is a laudable goal, as a stand alone policy it fails to address deeper structural issues within the labour market such as the rise of precarious work, the decline of the standard employment relationship, and the hollowing out of the middle class with good jobs steadily disappearing. Earlier this year Paul Krugman stated that "What we can't do is get where we need to go just by giving workers college degrees, which may be no more tickets to jobs that don't exist or don't pay middle-class wages." Krugman nails it by zeroing in on problematic nature of public policy that throws every young person in sight into a classroom amid wider  policy gaps that have failed to maintain: the bargaining power of workers, a stable social safety net, or appropriate regulatory oversight over corporate excess.

The solutions that exist for long-term sustainable prosperity don't lie within the canon of neoliberal orthodoxy and as recent events have shown youth around the globe are acutely aware of the bill of goods that has been shoved down their throats. Although it might be futile in the short-term we need to begin asking what are the longer term strategies and policy solutions for building shared wealth such as updating workplace laws to respond to the changing economy, adequately supporting young people in the transition from school-to-work, and properly equipping organized labour with the means to represent workers in all sectors of the economy. These are serious issues that don't get addressed often by the mainstream media or politicians as there rooted in complex ideas that don't neatly dovetail into a simplistic worldview that can be boiled down into a sound bite.

Going forward people should question the ideas behind the policy solutions being presented to them. The post-secondary education strategy being advanced by the Liberals is one that needs to be critically examined because education by itself isn't the key for the future prosperity of Ontario. We need better policy solutions to the economic problems that we currently face, not the status quo that slowly eroding our prosperity. So on this Labour Day I encourage everyone to dig deeper and get serious about thinking about big ideas that will help us secure our futures.

Manitoba Court tosses Gabor Lukacs' lawsuit

An update on the ongoing Gabor Lukacs litigation at the University of Manitoba. Manitoba's Court of Queen's Bench recently ruled that Lukacs has no standing to challenge the university's decision to award a PhD to a student. The decision was a unsurprising given the vast amount of internal power that universities possess to govern themselves. Gabor Lukacs and his legal counsel are currently assessing their options and it's unknown at this time whether an appeal will be forthcoming. Still outstanding is the separate grievance filed by the University of Manitoba Faculty Association which won't be resolved until 2012 with arbitration dates scheduled for later this year. I've previously written about this case, see: here, here, and here.