The School to Wage Theft Pipeline

Below is the text and video from a talk that I gave at York University on October 3, 2013, as part of a panel on the intern economy. It was part of the Global Labour Speaker Series put on by the Global Labour Research Centre. I wasn't planning on releasing the text or the video, but recent events made me reconsider. 

Last week the Toronto Star reported that Aaron Murray died after working an overnight shift as a security guard at Trent University as part of an unpaid internship associated with the protection, security, and investigations diploma that he was pursuing at Loyalist College. Mr. Murray was essentially working two jobs at the time of the crash, one as a manager at a Mcdonald's in Trenton and the other unpaid. It goes without saying that exhaustion or lack of sleep could have well played a factor in this tragic event.

What happened with Mr. Murray wasn't an isolated incident. In the fall of 2011, Andy Ferguson, a college student at NAIT, died after colliding with a truck after working an overnight shift at a radio station. He was completing an unpaid internship as part of the requirement for a radio and television program he was in. In the wake of CBC reporting on the death of Mr. Ferguson the Alberta Government ordered a review of all of the unpaid internship programs at colleges and universities. The report arising out of this review is expected to be completed shortly. The Alberta Government also asked about unpaid internships as part of the Employment Standards Review, I submitted a submission containing a series of recommendations aimed at increasing protections for students, interns, and young workers.

In the coming months I will be turning my attention to the issue of minimum employment rights for students forced in unpaid internships, the need for greater regulation, and third-party oversight over these arrangements. The demands being placed on students are often outrageous and it's high time that these deep structural problems were addressed.

1. INTRODUCTION

This talk is about the trajectory of public policy related to postsecondary education and labour markets in Ontario. I am going to interrogate and problematize how we as a society treat youths as they progress through school and transition into the labour market. I’m going to argue that post-secondary institutions contribute to the growing precarity, alienation, and insecurity that youths face.

We’re going to run through three main areas. First, I’m going to lay out some of the broad issues driving intern culture and the impacts arising from it. Second, I’m going to discuss the policy and statutory infrastructure underpinning intern culture and sketch out the cozy relationships between government, corporations, and post-secondary institutions. Third, I’m going to end with a discussion of how we need to reconceptualize our labour market policy and point out some possible solutions.

2. SETTING THE SCENE

I’m going to sketch out some of the broad trends that are occurring in Ontario’s youth labour market, explain the impacts arising from unpaid internships, and outline some equality considerations.

2.A Trends in Ontario’s Youth Labour Market

The nascent economic recovery youths have been largely left behind. The real youth unemployment rate sits at 23.4% and underemployment has become a defining feature of the youth labour market as there’s an oversupply of graduates and a jobs crisis with very little evidence of a skills mismatch. The problems within Ontario’s youth labour market are structural and chronic, rather than a result of the fallout from the global financial crisis.

Thanks Dalton!

There are over 750,000 students currently in Ontario’s post-secondary education system. This is an all time high and a result of Dalton McGuinty’s ill-conceived strategy of pushing youths into advanced education absent any semblance of a labour market or industrial strategy. Youths with university degrees have higher rate of unemployment than high-school or college grads. Simply put, it appears that Ontario’s universities are producing too many graduates with useless credentials with youths being sold a bill of goods; alternatively, it appears that colleges are doing a better job of producing job-ready grads.

We’re seeing the emergence of a two-tiered labour market with a hollowing-out of mid-level positions, rapid split to high-end, high-skilled jobs and low-end, low-skill jobs. The entry-level positions of yesteryear have gotten contracted out and have become dead-ends with no possibility for career advancement. Employers have little incentive to invest in training and youth workers, just-in-time model warrants the on-demand worker. Perhaps the most compelling narrative is the deep impact of precarious work on workers under thirty-five. These workers face a cycle of temp, contract, project-based, and contingent employment devoid of benefits, security, or permanence. 

2.B The Impact from Unpaid Internships 

Across Canada, but particularly in Ontario we’re seeing the impacts from governments strategically abandoning youths. Millennials exist in world far worst than Douglas Coupland’s “low-pay, low-prestige, low-dignity, low-benefit” McJob, no for today’s youths there is the “no-pay, no-prestige, no-dignity, no-benefit” internship - where you have the right to work, but no right to pay. A pre-job, a form of vetting where the employment relationship is often unclear and where youths are expected to provide unpaid labour in hopes of landing a paid position. Arguably, unpaid internships are a form of wage theft, employee misclassification, and a distilled form of at-will employment. 

Many unpaid interns are illegally denied wages, forego Canada Pension Plan and Employment Insurance contributions, and don’t pay income tax. Unpaid internships have a deep impact on the economy as paid employees get replace with unpaid interns, youths delay major life events, wages are driven down, interns are forced to rely on familial support or go into debt, and young workers are forced into a cycle of precarious employment.

2.C Equality Considerations

I’m going to briefly run through some points related to equality. 

Unpaid internships at the core are form of age discrimination which unfairly target young workers. With unpaid internships we have a poignant example of the abject lack of intergenerational equity. Embedded with our current cultural practices is an expectation that youths will work for free without nary a thought of the deep impact from not having a paycheque.

Internships have an impact on social cohesion, fuelling income inequality, created a city divided along lines of race and class. Internships reward students based on birth-status, socio-economic class, wealth of parents, This inhibits social mobility and decimates any notion of a meritocracy where the most capable and talented students succeed. There’s a creeping cultural apartheid occurring as youths from historically marginalized groups, who typically have less ability to engage in unpaid labour, are shut out from critical professions which control the social, economic, and political levers in Canada. The social fabric is being changed as students from historically marginalized communities are being shut-out.

It’s widely thought that unpaid internships are only an issue affecting youths, but this isn’t accurate. Recent immigrants are a group that heavily impacted by employers requesting unpaid labour. Governments, settlement agencies, and ethno-cultural community groups are all complicit in abetting the practice of employers demanding “Canadian experience”. Another trend I’m seeing is that international students are being forced into taking unpaid internships and facing heightened risk for exploitation by employers.

There’s a deep gendered dynamic engaged with unpaid internships, there’s a close linkage between the rising labour market participation of women and the emergence of unpaid internships. American researchers estimate that seventy-seven percent of unpaid interns are female and the most industries heavily reliant on unpaid labour are typically dominated by females. The rise of unpaid internships reinforces the historical undervaluing of female labour. The unpaid labour interns provide repeats a trend what’s we’ve previously seen with household work, the women’s double day, and the gendered wage gap. 

3. POLICY AND STATUTORY INFRASTRUCTURE

Now I’m going to highlight the policy infrastructure underpinning the practice of pushing unpaid internships on youths. I’m going to be focus on indoctrination, the statutory architecture, the impact of human capital theory and work-integrated learning, and highlight the cozy relationship between universities, employers, and post-secondary institutions.

3.A Indoctrinating Youths into Being Accepting of Unpaid Labour

Young people are indoctrinated from a young age into willingly providing unpaid labour without kicking up a fuss. In Ontario, high school students are pressured, under the threat of being denied an Ontario Secondary School Diploma, into forced labour via a requirement that they “volunteer” for forty hours over the course of high school. Many for-profit employers obtain hundreds of hours of free labour from students in this manner. Another troubling development is that there has been rapid growth in experiential education within Ontario’s high school curriculum. Unpaid labour is pushed on youths, employers receive free labour, and paid jobs that high-school students would normally do are replaced with unpaid student labour.

Youths are also subjected to messaging from the media and popular entertainment that signals that providing unpaid labour to employers is necessary. Agata Zieba has advanced the idea that “media content is an important site of the construction of a glamorous view of...internships”. She goes on to reference media properties like The Hills, Miss Seventeen, and Stylista as contributing to making the idea of providing, competing, or even paying to undertake unpaid labour as “cool”. Note that there is a distinct gendered component to these titles and it’s clear that young women face a much higher level of messaging around unpaid labour than their male counterparts.

Overall we’re seeing a trend towards the normalization of the expectation that youths are expected to provide unpaid labour to private corporations and public-sector organizations as part of the process of adolescence and during the school-to-labour market transition.

2.B Statutory Architecture

We have minimum wage laws, don’t we? Well, funny question. Yes we do, but there’s little evidence that the Ministry of Labour does much proactive enforcement within the youth labour market and next to none in relation to unpaid internships.

Ontario has a fairly strict set of guidelines governing the use of unpaid labour and has carved out three exclusions within the Employment Standards Act, 2000 (“the ESA”) where an unpaid internship would be considered legal. Students doing an unpaid internship as part of academic program are completely excluded from the ESA and persons completing professional training in a enumerated profession such as law, architecture, or psychology are excluded from critical protections related to minimum wage, overtime pay, and hours of work.

The most important exclusion allows employers to place persons completely outside the the protections of the ESA if they meet all of the conditions of a six-part test. The constituent parts of the test are: the internship must be similar to a vocational school; the internship must benefit the intern; the employer can derive little, if any, benefit from the intern during the internship; the intern cannot replace a paid employee; the intern cannot be accorded a right to employment; and, the intern cannot be paid. The overwhelming majority of non-academic unpaid internships in Ontario do not adhere to the six-part test and are illegal. 

3.C Neoliberalism, the Impact of Human Capital Theory, and Post-Secondary Policy

It’s necessary to locate this discussion within the rise of neoliberalism. Neoliberalism is a radical form of public policy premised on market fundamentalism which seeks to enforce via regulation the free flow of capital, privatization, a reduced amount of socially protective welfare programs, protection of private property, labour market flexibility, reduced legal protections for workers, reduced corporate taxation, and the transfer of publicly held wealth into private wealth. 

What government and post-secondary institutions present to youth is a false prospectus or a bill of goods. Central to understanding the impact of human capital theory is an understanding of the big lie: if you get an education there will be a job for you. Invest in yourself and you will flourish goes the line, implicit in this idea is the narrative that education is a personal investment rather than a social good. In Ontario, a successive series of governments have adhered to human capital theory and have pushed increasing numbers of youths in post-secondary education without nary a thought of where they might find jobs. 

Part of this process is through reducing transfers to post-secondary institutions thereby shifting costs onto students directly, increasing tuition to extreme levels, allowing universities to self-regulate (i.e. deregulation) on tuition in certain high-status programs such as law, business, and medicine, and forcing students to assume high levels of debt to pay for education and the necessities of life.

Unpaid work-integrated learning as sound public policy is be touted at the transnational, national, and sub-national level. The Organization for Economic Cooperation and Development, one of leading organizations pushing the neoliberal agenda, has released a series of research papers in recent years heralding the benefits of work-integrated learning. We’re seeing a renewed push toward work-integrated coming through policy proposals from the Ministry of Training, Colleges, and Universities and the Higher Education Quality Council of Ontario. In the fall of 2012 the Ministry of Training, Colleges, and Universities released a white paper that contained a range of measures aimed at increasing the amount of unpaid work-integrated programs in Ontario’s post-secondary education system. 

3.D Work-Integrated Learning and the Broken School-To-Labour Market Transition 

A rather pernicious idea flowing out of human capital theory is that of work-integrated learning, also known as experiential education or situated learning. The deployment of unpaid internships by post-secondary institutions is often part of government mandated structural adjustment programs which seek to track outcomes, measure quality, and quantify what students are learning. Work-integrated learning is all the rage within the rarefied world of policy makers and university administrators. Work-integrated learning is not just limited to the concept of unpaid internships, but can refer to practicums, field-work, clinical programs, co-op programs, and job shadowing. 

Work-integrated learning has trumped formal training for entry-level employees as the main public policy push. It appears apprenticeships, co-op learning, and bona fide on-the-job training are increasingly viewed as antiquated. This is an odd development given that these forms of workplace training have been in use for thousands of years and can be traced back to Babylonian Empire. Internships, as they were originally conceived, were a way to train doctors and closely resembled what’s known today as co-op education. Ontario even possesses the crown jewel of co-op programs globally, the University of Waterloo, which has over eleven thousand co-op students at any given time. 

Apprenticeships and co-op programs are better regulated, paid a living wage, and more often than not well-managed as opposed to low-regulation, no-pay, and poorly managed internships. This highlights the problematic gendered nature of our approach to transitioning students into the labour-market. Males simply access better-structured training opportunities at a much higher rate than females, it should be noted that females now attend post-secondary institutions at a far higher rate than women.

3.E The Relationship Between University, Government, and Corporations

There is a deeply symbiotic and structural relationship between post-secondary institutions, government, and corporations. It’s clear that post-secondary, governments, and corporations need youths. 

Universities and colleges continually need an influx of new students to receive revenues from tuition/fees, undertake unpaid labour, and justify the ongoing mission of the institution. Administrators, professors, and employees of post-secondary institutions don’t assess their role in intern culture or pushing unpaid labour. There’s a minimal cost for institutions and minimal requirements for supervision. What we’re seeing within intern culture and on campuses is the development of a pay-to-play culture where opportunity and experience can be bought for a price from for profit internship providers. Student are essentially paying to work and paying to be trained. Universities are also notorious for posting illegal unpaid internships on career services websites.

In the public sector, mainly the broader public sector, receives billions of dollars in unpaid labour. Mainly located in post-secondary education sector, social services, healthcare sector, and school boards. In the face of cutbacks to the social welfare state, it’s critical that youths provide labour as a means to soften the blows suffered under neoliberalism. Beyond that, it’s critical to the facade that the Ministry of Labour, Ministry of Education, or the Ministry of Training, College, and Universities maintain a regulatory free or self-regulation approach by totally absolving themselves of any oversight role over the conditions that students labour under. Another troubling issue is the broader linkages to competition regulators in pushing unpaid labour - consider paralegal education, the new Legal Practice Program, or internships for Registered Dieticians.

Consider how post-secondary institutions rely on corporations for donations, prestige from formal and informal relationships, and access to expertise. Also, consider how corporations rely on post-secondary institutions for research expertise, new workers, and prestige. Post-secondary institutions lend a moral and intellectual authority to unethical and exploitative arrangements. When work-integrated learning is mandated by post-secondary institutions provides employers with a powerful tool to extract a higher level of unpaid labour from students, if students don’t comply with demands they risk damaging their ability to complete their degree or diploma. There is a shifting of the cost of employee training onto students, their families, and ultimately the government and the public-purse. 

4. PUBLIC POLICY SOLUTIONS

As a province, we need to acknowledge the lack of an effective labour market policy is slowing overall economic growth, inhibiting productivity, inflicting economic scarring on the youths, and fuelling income inequality and economic polarization.

4.A Strategies to Address Unpaid Internships in Ontario’s Labour Market

We’re facing regulatory failure. Given the level of economic scarring occurring in the youth population the current do-nothing approach is unacceptable. I’m going to outline two approaches which could assist in addressing youth unemployment. 

The Ministry of Labour needs to begin proactive enforcing the law, rather than placing responsibility for complaining onto the intern who has the least amount of power. A tailored enforcement strategy is necessary which would include inspection blitzes, prosecutions, ongoing monitoring of offenders, an anonymous complaints hotline, and targeting intern heavy industries. As part of adopting a proactive enforcement strategy, the Ministry of Labour needs to hire a dedicated team of Employment Standards Officers who understand and can enforce the law.

An educational campaign needs to be developed to inform young workers, students, parents, post-secondary institutions, and employers about the laws surrounding unpaid internships in Ontario. I would suggest that such a campaign include advertising, social media outreach, development of audience-specific educational materials, and dedicated web portal where interns can learn about their rights and file anonymous complaints.

4.B Development of a Balanced Labour Market Policy in Ontario

It must not be forgotten that the emergence of illegal unpaid internships are simply one byproduct of Ontario’s outdated labour market policy. Ontario needs a sea-change to how we link people to jobs, currently we have a fixation with supply-side labour market policies which have largely been an assault on workers, pathologized unemployed workers as defective and personally responsible for their situation, and focused on creating a highly flexible labour market with some of the worst employee protections in the world. This supply-side fixation needs to end and a balance approach adopted.

Ontario’s failed labour market policy is exacerbating the fallout from illegal unpaid internships and does nothing to help youths in the school-to-labour market transition. A careful review of data shows that youths are faring better in Hamilton, Kitchener-Waterloo, and Sudbury. All of these centres have close linkages between local employers and post-secondary institutions; furthermore, there appears to be a great focus on apprenticeship training and co-op programs. Ontario needs to adopt a paid-first mentality that prioritizes programs which can offer youths training, but also the ability to earn a pay-cheque.

We need to see the development of a labour market strategy focused on workforce development linking people with training that leads to actual jobs. Given that all the students current in post-secondary institutions won’t necessarily obtain knowledge economy jobs, we need to create entry-level and middle-career jobs for graduates who aren’t able to fully utilize their advanced education. We need sector-specific strategies that target industries where there is the potential for creating “good” jobs, opportunities for advancement, and where employers are committed to investing in workers. 

That’s all I have today. Thanks.