The Value of Unpaid Internships

April 3rd, 2011

It seems that every once in a while, I see some piece attacking unpaid internships, arguing that evil corporations are exploiting young students for free labor (see e.g.). Today there was a new piece in the Times, titled Unpaid Interns, Complicit Colleges that did not disappoint.

Colleges and universities have become cheerleaders and enablers of the unpaid internship boom, failing to inform young people of their rights or protect them from the miserly calculus of employers. In hundreds of interviews with interns over the past three years, I found dejected students resigned to working unpaid for summers, semesters and even entire academic years — and, increasingly, to paying for the privilege.

Where do I start? Well, lets start with this “miserly calculus of employers,” generally known as the laws of supply and demand.

What makes WNBC — whose parent company, General Electric, is valued at more than $200 billion — think it can get away with this? In Mr. Batson’s case, a letter from Colgate, certifying that he was receiving credit for doing the internship

College students with no experience are not particularly valuable. Usually, they are a liability, and require extensive training and supervision to make sure they don’t screw things up too bad. Were interns to demand a salary at minimum wage, employers would be better to not hire them in the first place. I suppose that is what the author of this piece would prefer. The only way it makes sense to employ them is gratis.

Next, students are “dejected” to work unpaid, and are “paying for the privilege” to work. Wow. Shocker. Teenagers are unhappy with having to work. Amazing. Well I’m sure they can certainly flip burgers at McDonalds or some such position that pays. But, for some reason, these students, wisely, are investing in their future. As for the fact that they “pay[] for the privilege,” the article is on to something, in part.

First, the article carps that these students are forced to live in expensive cities without money, and have to crash on couches.

“It definitely hurt my confidence,” Mr. Batson told me. He recalled crashing on more than 20 floors and couches, being constantly short on cash and fearing he would have to quit and go home. His father, he said, felt like a failure for not being able to help him rent an apartment.

Umm… even if the student was earning minimum wage (about the highest salary he could probably command, unless he possessed some special skills), he would still need to crash on couches. You can’t live in a foreign city for 3 months on low wages. Whether the salary is $0, o maybe $50 a day, you are still going to be broke. One summer I interned with the Department of Defense in Arlington, VA (away from home). I was making, maybe $7/hr. You cannot live in Arlington, or anywhere in northern Virginia at that salary. I did not know anyone, and had no couches to crash on, nor did I have any family members nearby. My employer made no effort to help find a place for me to live. I had to dip into personal savings just to cover the extravagant rents for those 3 months. Yet the experience was well worth the cost, even if I was in the red for the summer.

But the real cost of an internship is paying the school fore credit. I held a number of internship positions during College (my internships were paid, though I was prepared to work for unpaid positions). I was incensed that I had to pay the school for 2 or 3 credits at whatever the out-of-state tuition rate of the day was for the “privilege” of working? The school provided no guidance, no assessment, and simply made my boss fill out some annoying useless forms. This is merely a ruse to extract money from the most productive students. I suppose that was a preview for real life. This cost should be eliminated, or at the maximum, students should pay some kind of administrative fee for the time and inconvenience of the career services office, you know, emailing forms every few weeks. A 3 month internship where the school does nothing hardly equates to a 3 credit course where a professor is hired to, you know, do some work.

An unpaid internship is an investment in your future. When two college students graduate–with the exact same academic credentials, but one spent his summer interning at an industry leader, and the other worked as a lifeguard–which one do you think is more likely to get the job?


Update: From WaTimes:

Unemployment was 25.7 in February for teenagers and 15.7 percent for those 20 to 24 years old, according to the Bureau of Labor Statistics. Recent college grads are despairing of landing anything above the fast-food counter, where they face stiff competition from millions of recent immigrants.

It seems fairly clear that youths provide little value for the wages they may wish, hence these staggering unemployment numbers.

Building on some Twitter follow-up discussions, I think there are two legitimate, yet distinct problems.

The first, is colleges knowingly letting their students work in bogus unpaid “internships” where they gain nothing and do menial labor. If a student is attending such a college, they have bigger problems than worrying about bad internship. In fact, getting out of the college and actually working may be the best thing to happen to them.

The second, more common (I think) problem is universities placing students in legitimate unpaid internship, but charging them an arm and an leg in order to receive credit. That is an absurd moneymaking ploy that takes advantage of captured students who were smart enough to actually obtain a legitimate internship. This problem could be remedied, as I note above, by reducing this credit fee to a simple administrative fee to cover costs.