Unpaid Interns Are Exploited?

How the Labor Department's new rules will interfere with the rights of contract and free association.

John Stossel | 5.6.2010 12:00 PM

Do you employ unpaid student interns—college students who work in exchange for on-the-job training?

If so, President Obama's Labor Department says that you're an exploiter. The government says an internship is OK only if it meets six criteria, among them that the employer must get "no immediate advantage" from the intern's activities. In fact, the employer's work "may be impeded."

Impeded? No immediate advantage?

I'm in trouble, then. I have an intern at Fox Business News, and I'm getting immediate advantages from her work all the time. I've had interns my whole career and gotten lots of immediate advantage from them. Occasionally, I've been impeded—but the better interns did the research that made my work possible. I'd asked my TV bosses to pay for research help, but they said, "You think we're made of money?"

So I asked colleges if students wanted internships. Many did, and from then on I got much of my best help from unpaid college students.

Did I exploit them? Obama's Labor Department says it's hired 250 new investigators to catch exploiters like me. I tried to get the department to answer my questions on tonight's FBN show, but it declined.

So I invited Village Voice writer Anya Kamenetz, who wrote a column titled "Take This Internship and Shove It" in The New York Times.

"We have minimum wage laws in this country for a very good reason," she replied. "We had them to avoid exploitation like child labor.

But what's wrong with a free internship if a student learns something about the career he wants to pursue?

I was a little stunned by Kamenetz's answer: "Employers could say we cannot afford to pay anybody, so why should we be forced to pay the guy who cleans the floors?"

Because they wouldn't get people to clean floors if they didn't pay. But I guess I shouldn't expect a New York writer to understand markets.

"Interns are people that come in and work for below minimum wage," she said. "They pull the bottom out of the labor market, and it's less fair for everybody."

So it should be banned?

"There are a lot of ways to fill in the need for interns and the need for college students to get experience. One way is for colleges to pay stipends."

But they won't.

"They will if the law is enforced. Another way is for companies to hire students that are eligible for federal work-study."

Oh, I see. The taxpayers should pay for my interns.

"Nobody is saying that these interns should go away," Kamenetz added. "What they're saying is a company should put money in their budgets to pay people the minimum wage to work for them, and that is just the basic issue of fairness. If you start working for free, where's it going to end?"

Give me a break. It would end when the interns have the skills to earn market salaries. Minimum-wage law and union rules already killed off apprentice jobs on construction sites. Contractors say: If I must pay high union wages, I'll hire experienced workers. I'd lose money if I hired a kid and helped him learn on the job.

My interns often told me that working—unpaid—at WCBS or ABC was the best learning experience of their lives: "I learned more from you than at college, and I didn't have to pay tuition!" It was good for them and good for me.

Kamenetz said, "Studies show that when companies pay their interns, they design the internships better."

Please. A few years ago, my old employer, ABC, started paying our interns. That was good for well-connected students who got internships, but bad for those who were turned down. ABC cut the number of interns by more than half. There's no free lunch.

What's happened to the rights of contract and free association? If student and employer come to an agreement, both expect to benefit or it wouldn't happen. The student is no indentured servant. If the employer "exploits" the student, the student can quit. The contract ought to be nobody's business but theirs.

Butt out, federal bullies. Grown-ups can take care of ourselves.

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at johnstossel.com.