Archive for the ‘Politics’ Category

The Illegality of Unpaid Internships

Monday, January 17th, 2011

From "Should I Work for Free?" (click to enlarge, or see www.shouldiworkforfree.com)

There’s a website going around aptly named “Should I Work for Free?” which features a flow chart to “help” users decide if they should work for free or not. Check it out – it’s clever and a little funny (especially considering the paths leading to “No” outnumber the paths leading to “Yes” by a score of 13 to 8).

Anyway, as co-President of the Private Equity & Venture Capital Club at Columbia Business School, I get a ton of questions from first-year students about summer and school-year internships. I love getting these questions because it’s interesting to see which industries and sectors are looking for extra help, and I get to be (potentially) beneficial to my classmates. With that said, I have also noticed a rise in the number of unpaid opportunities lately. I don’t know if this is actually true or if my anecdotal experience is simply an anomaly, but the concept of unpaid employment at a for-profit business has never felt right to me.  Irrespective of my opinion, however, unpaid internships are almost always illegal.

Yep, you read that right.

In April 2010, The New York Times published an article highlighting the individual internship experiences of a few students, but more importantly, the legal aspects of this facet of the labor market.  In short, an intern can only be unpaid if he or she is technically a “trainee” at the hiring company.  Further, to be a trainee, the form of the intern’s work must meet each of the following six points (note: the law is in bold italics followed by my commentary in plain text; red indicates points I routinely see violated):

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction. This is likely the most violated of the six points. In business school, I’ve NEVER heard of an unpaid internship that’s similar to “academic educational instruction.” In fact, isn’t it the separation from traditional classroom instruction that is attractive to interns?
  2. The training is for the benefit of the trainees. This is typically in compliance.
  3. The trainees do not displace regular employees, but work under their close observation. Although interns often work under the observation of regular employees, I’ve routinely heard of interns displacing regular employees (albeit in a small way).  For example, if an intern does ANYTHING that takes work off the plate of a regular employee, the regular employee has been partially “displaced” and would thus need to be paid for this work under the law.
  4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded. Having any new employee temporarily impedes the operations of existing employees, but the vast majority of interns are ultimately helpful to the hiring firm (most often through the violation of #3 above).
  5. The trainees are not necessarily entitled to a job at the conclusion of the training period. This is typically in compliance.
  6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training. This is typically in compliance.

That’s a lot red (especially when considering that ALL six requirements need to be satisfied for the unpaid internship to be legal). The good news is that this an easy problem to solve. The highest minimum wage in the country is in San Francisco at $9.92 per hour (see Wikipedia for the minimum wage by state). This equates to just $4,000 for a normal summer internship or $80 per day for a school-year internship (in New York the costs are 27% lower at$15,000 and $60, respectively). Considering the benefit companies get from interns, paying minimum wage is the least they can do. It also turns out it’s what they have to do.

Note: as a reminder, this is my personal blog and the opinions represented here are not necessarily shared by Columbia University or any other entity. I’m also not a lawyer and this post should not be construed as legal advice.

Don’t Be a Jerk

Wednesday, January 12th, 2011

Ben Franklin

Benjamin Franklin Portrait, by Joseph Siffred Duplessis

I’ve been intending to write this post for a long time, but the malevolent and snarky comments following Alan Patricof’s piece on Business Insider earlier today reminded me how overdue I am in writing this.  In full disclosure, Alan is my old boss, I consider him a friend, and I largely agree with the content of his article.  However, that’s not the point of this blog post:

Dear Anyone Who Writes Malicious Anonymous Comments on the Web,

You are a coward.  A giant, pathetic, spineless coward.

Although I appreciate that the Internet provides tremendous anonymity for its users, too often this right is abused.   Perhaps some sites can figure out who we are through IP addresses and cookies, but for the most part this concealment of identity allows confidential, embarrassing, or otherwise inappropriate information from being publically revealed.   Simultaneously, I cherish that the United States values freedom of speech as one of our fundamental beliefs.  I don’t propose we make any legislative changes around privacy and/or the First Amendment, but rather, I’d like to see online communities stop accepting such blatant cowardice furnished through anonymous posts.

Even Benjamin Franklin, one of America’s most famous anonymous writers via Poor Richard’s Almanack, was never mean-spirited simply for the sake of his own entertainment.   However, one of the commenters to the Business Insider article (who refused to reveal their real name) told Alan to “go do something useful with [his] life” as well as a few other childish insults.

Not everyone has to like everyone else – I get that – but would you say something so nasty to a person you’ve never met if you were looking him in the eye?   I doubt it.  So why would you on the web?

Consequently, I pledge to never publically criticize another person without having the guts to put my name on the comment.   I hope you will do the same.

We Will Never Forget

Saturday, September 11th, 2010

I am unfortunately no stranger to the terror of terrorism. Nine years ago today as a college student, I solemnly noticed smoke rising from the Pentagon while I stood on the opposite bank of the Potomac. Eight months later, I interned for a company directly adjacent to Ground Zero and then joined them full-time after graduation (and have remained a New Yorker ever since).

These experiences have hardened me to be perpetually cautious and vigilant, but have also deepened my appreciation for the freedoms that are the bedrock of America. This is not a nation founded by “Christians” as some observe in order to distract certain debates, but rather a country established by patriots who longed for a place where the government would protect all religious freedoms. In the words of President Obama, “the principle that people of all faiths are welcome in this country and that they will not be treated differently by their government is essential to who we are.”

Although roughly two-thirds of Americans oppose the proposed mosque several blocks from Ground Zero, I proudly stand with the President, Mayor Bloomberg, and other brave Americans willing to take an unpopular stance in defense of what’s right.

On all days – but especially today, September 11th – it’s essential for us to remember not only the innocent people who lost their lives to terrorism, but also those who have sacrificed to shape this country into a beacon of freedom and tolerance. If we start suggesting that it’s “not appropriate” or “too soon” for certain Americans to enjoy their religious freedoms as equally as others then we have allowed terrorists to uproot us from our most fundamental founding beliefs.

Crowd-Sourcing Will Go Mainstream

Thursday, April 15th, 2010

A few days ago, I finished reading “Game Change” which is John Heilemann and Mark Halperin’s controversial account of the 2008 U.S. presidential race. This book has become fairly popular amongst political junkies of all stripes (it’s been on The New York Times bestseller list since its publication and The Huffington Post lamented how difficult it was to find a copy when it first came out).

Frankly, the authors seem most concerned with revealing the alleged – but certainly provocative – thoughts and statements of the different candidates’ inner circles, but I enjoyed the tome for the implicit argument that “crowd-raising” and “crowd-sourcing” have fundamentally changed the way our society functions.

Not every supporter of Barack Obama in the 2008 election could give $2,000 at once, but millions of people gave $20 multiple times. Linked together, over a period of time, small donations had a massive impact. This pooling example provides insight into how capital and knowledge can be similarly harnessed to create powerful change in other areas. Specifically, if tools existed to link people with spare time and suitable skills to projects that benefit from their contribution, society and business may be able to cumulatively make advancements using resources we already have.

Americans, in particular, are busy. However, even in the most hectic of days, there are free moments found in blocks of just a few minutes. Aggregated, this spare time can have enormous social or commercial impact. Sitting in an airport (like I am right now), waiting in a doctor’s office, riding the subway, etc., are all opportunities for harnessing the “crowd.”

I’ve come across a number of interesting companies developing different types of models in this space so drop me an email if you want to discuss this sector further. Some of the great ideas include models to help struggling bands record their first albums as well as new product development forums that allow contributors to participate in the financial upside. The revenue models for nearly all of this field still need to be proven, but it’s an exciting sector to follow nonetheless.

UPDATE to “Dear Mr. President”

Tuesday, April 21st, 2009

After I posted my letter to President Obama to this blog, I also dropped a hard copy in the mail and sent it off to the White House.  After a few weeks transpired, I figured I would not receive a response (nor was I expecting one), but much to my surprise, I was contacted via phone on Thursday.  I was asked not to publicly blog about it yet, but if you drop me an email I can tell you all about it offline.  Exciting!

Coincidentally, here is an article The New York Times wrote yesterday about presidential letter writing: http://www.nytimes.com/2009/04/20/us/politics/20letters.html

Falling Like a Domino

Saturday, April 18th, 2009

Even though Dee has lived for several years in a city with some of the best pizza on the planet, she still occasionally insists on ordering a Domino’s thin crust with jalapeños.  I think she’s crazy, but I usually acquiesce since (1) I know better than to cross her when she’s in search of her beloved pizza, and (2) because Domino’s actually has a really cool website which the nerdy tech side of me appreciates.  The site enables users to order online and then track their pie through the preparation and delivery process with impressive precision.  Despite the fact I generally shy away from giant chains that produce meals involving entirely defrosted ingredients, I have to confess that the 30 minute delivery and $12 cost are tough to beat.

However, Domino’s unfortunately isn’t receiving too many other complimentary comments on the Internet these days.  As many sources reported over the last week, videos that depicted two Domino’s employees in North Carolina tampering with customer food were uploaded to YouTube.  Through a plethora of channels, the videos moved like a hurricane across blogs, Twitter, and other online media, leaving a path of PR destruction for Domino’s.  This is yet another example of the vulnerability brands face today, but what was perhaps most interesting was how the company combated the adverse publicity.

Domino’s created a Twitter account and directly addressed the issue.  They then added content to the company’s Facebook page, and ultimately posted a sincere apology from Patrick Doyle, President of Domino’s USA on YouTube.  They are also aggressively pursuing legal measures against the two employees and broadcasting updates about the arrests online.

The jury is still out on how Domino’s image has recovered since the fiasco, but social media has also been shaping major political issues.  These social media outlets received heightened coverage during the U.S. election season, but last week the movement want decisively global.  In Moldova, a crowd of more than 10,000 citizens materialized seemingly out of nowhere to protest against Moldova’s Communist leadership.  In the process, they ransacked government buildings and clashed with the police.  The protesters skirted detection while organizing their uprising by enlisting the very tools Domino’s used to combat its problem: text-messaging, Facebook, Twitter, etc.

I don’t condone the destruction, but I am interested in the increasing trend – although it’s certainly not a new one.  Emerging media technologies have been especially important to me ever since I studied abroad in São Paulo.  There, I witnessed Brazilian farmers organize themselves via cell phone to improve their representation in local government.  They passed along a simple text message with the summons for protest: “Go 2 Paulista Ave.  Wear white.”  The thousands of similarly dressed farmers were an inspiring sight and illustrated to me the versatility of media technologies beyond mere entertainment.

Going forward, I’ll add additional major business and political movements spurred by digital media to this blog, and please let me know of others you encounter so I can document them.

Dear Mr. President

Wednesday, March 4th, 2009

Below is a letter I sent earlier this week to President Obama about my idea to create a cabinet-level “Secretary of Sustainability” who would spearhead America’s leadership in environmentalism.  In the future, I plan to write another post regarding how I envision digital media technologies will fit within the larger clean technology industry.

The Honorable Barack H. Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500-0001

Dear Mr. President:

I recently saw an interview with Jeffrey Immelt which got me thinking about how the U.S. can lead the world in alleviating the current global energy and environmental problems.  The interviewer asked GE’s Chairman and CEO “why doesn’t America have a government that can just put all the right policies in place to shape the energy and environmental markets?”

Immelt asserted that “if you asked the utilities and big manufacturers what they would most like, it would be for the president to stand up and say: ‘By 2025 we are going to produce this much coal, this much natural gas, this much wind, this much solar, this much nuclear, and nothing is going to stand in the way.’  Well, you’d have about thirty days of complaining and crying, and then people across the energy industry would just stand up and say, ‘Thank you, Mr. President, now let’s go do it.’  And we would go out and do it.”

I know Immelt’s proclamation is unrealistic within the constitutional controls of our democracy, but the environmental challenges facing the globe are so profound and so imminent that we cannot wait for traditional free-market forces to alleviate the issues.  Instead, we need Washington to mandate immediate changes and foster the ideal market conditions for innovation.  Then, the government should get out of the way and let the natural force of the American capitalist system work.

To accomplish this, I suggest you create a cabinet-level position dedicated to synchronizing the disparate energy and environmental efforts which already exist within our government.  This “Secretary of Sustainability” would combine our environmental interests in commerce, energy, defense, international relations, and even education and housing.  By centralizing the sustainability efforts already performed within these other agencies, America can systematically become the leader in the most important industry of the 21st century, clean technology.

With China, India, and other developing countries continuing to employ dirty and antiquated methods for powering their economies, they are almost daring us to lead sustainable growth.  Some officials from these nations whine that the U.S. enjoyed 150 years of dirty industrial expansion so now it’s their turn to pollute.  Although the Secretary of Sustainability will work with Secretary Clinton to change these types of attitudes abroad, temporary delays by other countries to “go green” will give us an even bigger head start.  A head start if we act now, that is.

We live in the most entrepreneurial nation on the planet and it will take only a few years to invent the clean power and energy efficiency tools that the rest of the world will need to avoid choking on pollution if the government provides the right incentives and penalties.  We can then export these technologies which will guarantee high-value jobs for our children while improving our national security by eliminating reliance on foreign imports like oil.

Although this will be a challenging task, I urge you to appoint a Secretary of Sustainability to ensure America’s future.

Sincerely,

Michael B. Katz