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VIDEO – Economic ‘Recovery’ is a Lie – Unpaid jobs: The NEW Normal?

Posted on: March 28, 2011

With nearly 14 million unemployed workers in America, many have gotten so desperate that they’re willing to work for free. While some businesses are wary of the legal risks and supervision such an arrangement might require, companies that have used free workers say it can pay off when done right.

“People who work for free are far hungrier than anybody who has a salary, so they’re going to outperform, they’re going to try to please, they’re going to be creative,” says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services. “From a cost savings perspective, to get something off the ground, it’s huge. Especially if you’re a small business.”

In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations. She’s convinced it’s the wave of the future in human resources. “Ten years from now, this is going to be the norm,” she says.

Why do people work for free?

The benefit unpaid labor offers to a business is pretty clear, but it can also give employees needed experience, a reference letter or even a self-esteem boost in a depressing economy.

Cassie Johnson, a 27-year old in San Marcos, Calif., lost her job as an enrollment adviser for an online university in 2009 and was receiving unemployment benefits for a year before finding an assistant manager position at a Starbucks (SBUX) that’s so far from her home she spends most of her pay on gas. Since starting a public relations internship in February, she feels a renewed sense of purpose.

“I’m learning a lot and I feel really good about it. I’m happy. I feel relevant. I’m not making any money, so it’s tough, but I feel it’s setting me up for a career,” Johnson says. “I only have $1.50 left in my checking account right now but I’m living with my boyfriend and he’s been really good about supporting me.”

Sometimes, gratis work can even lead directly to a paid opportunity. Theresa Potter had been a marketing executive for 30 years when, during a career lull, she agreed to work on a few marketing initiatives for free at Coalescence, a Columbus, Ohio-based custom spice blending firm.

“You have amassed a lot of this information and you like to share it. You like to see companies become successful,” Potter says.

Potter’s year of volunteering at Coalescence paid off when the company’s founders asked her to take the reins as president — a salaried position. She felt comfortable taking the job because she’d become so familiar with the corporate culture and business goals.

But is it legal?



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