In the not-too-distant future, all internships at for-profit companies in the US will be paid at least minimum wage. Over the past four years at InternMatch, we’ve seen a rising tide of awareness and even outrage about unpaid internships and the impact on students struggling to support themselves. High profile lawsuits against Fox Searchlight Pictures and Hearst by brave former interns have helped shine the spotlight on the increasingly probable PR and financial nightmare of running unpaid internship programs.
Unpaid internships provide yet another example of the legal first step failing to translate into institutional change without the presence of broader social consciousness. For for-profits, the Department of Labor has a clear six point test that charges employers with paying interns if, among other criteria, the employer derives “any value” from the participation of the intern. This test had been largely ignored until very recently when it became the center of attention in the paid vs. unpaid debate. Still, thousands of employers in the US (and globally) refuse to pay their interns. The rationale for unpaid internship programs seems inextricably tied to the American Dream and belief that students should “pay their dues” and “pull themselves up by their bootstraps,” as if $200,000 of college tuition aren’t dues enough. The argument goes that companies are giving interns such a career building, high value, break-into-the-industry experience that financial compensation is not required. In reality, the unpaid internship paradigm is inherently unfair, discriminatory, perpetuates inequality, and hurts the economy.
Internships have become a gatekeeping experience required to land a professional, full-time job after college. Employers cite internship experience as a more important factor than GPA. But as internships have grown in prominence over the last 30 years, so too has the cost of attending college. So here’s the rub: if I’m a college student struggling to cover the costs of tuition without significant financial support from my parents, then how do I justify an unpaid internship over a paying job on-campus or at my local Starbucks? Often, students in this position take the job that pays. The student from a middle or upper class family with the means to fully support the outrageous cost of their higher education, on the other hand, will often take the unpaid internship with the often false promise of turning into full-time employment. So in a nation that prides itself on promoting equality of opportunity, one of the most effectively perceived paths for building a successful career is shut off to students without the resources to work for free.
Did you know that women are 77% more likely to complete an unpaid internship? Wow. This happens in part because women are more commonly employed in industries that focus on environment, social justice, PR and entertainment, which are exclusive and highly coveted. Without any meaningful legal enforcement, women-oriented industries are so competitive that the market drives the price to zero. In contrast, traditionally male-dominated career paths such as software engineering are among the highest paid internship opportunities anywhere, with interns at Microsoft, Google, and Facebook earning well over $10,000 for a summer of rewarding on-the-job education. In 2013, the United States is still a society where the average woman earns 80 cents to the average man’s dollar. The disproportionate rate of unpaid internships for women is pushing us further from the equal society that most of us desire.
Unpaid internship programs also open the door to discrimination. Labor groups have fought hard over the last 100+ years to protect workers from discrimination in both the hiring process and on the job. As Ross Perlin, a preeminent scholar on internship history, points out, unpaid interns have no legal recourse when it comes to sexual harassment on the job because they aren’t actually employees. In the world of the unpaid intern, the coveted employee protections that most of us take for granted don’t even exist.
Unpaid internships also hurt the economy. When a famous restaurant like Roberta’s in New York City brings on an unpaid intern to work in the garden, the reality is that the economy loses one more part-time or full-time job. The millions of unpaid internships in the US every year are costing hundreds of thousands of jobs. According to a recent NACE survey quoted in the Wall Street Journal, paid internships turn into a job 60% of the time, whereas unpaid internship experience offers a measly 1% bump over no internship experience at all (37% vs. 36%). The data-supported realization that unpaid internships have only a 1% impact on employment should sound an alarm for everyone defending the “pay your dues and you’ll be better off long term” argument.
Interns need to be paid. It’s not enough to offer a great learning experience. Shutting the doors on entire industries to those that cannot or will not work for free is unacceptable. Refusing to pay talented students that work as hard or harder than full-time employees is unacceptable. Paying interns will improve the economy, improve prospects for college students burdened with debt, and move us toward a more equal society. If you run an unpaid internship program, it’s time to get on the right side of history.