The predicament of unpaid internships

The purpose of academic, unpaid internships are to gain hands-on experience in the student's related field. However, some interns are often taken for granted and used for meaningless tasks with no learning elements. (Wikimedia)

The purpose of academic, unpaid internships are to gain hands-on experience in the student’s related field. However, some interns are often taken for granted and used for meaningless tasks with no learning elements. (Wikimedia)

When UCLA undergraduate student Matt Shemirani was heading towards the end of his junior year, he wanted to get an internship in the finance industry that summer.

Naturally, he asked his parents for advice. To his surprise, his parents said they had never worked any internships before.

Shemirani eventually got hired as a global wealth management intern at Bank of America Merrill Lynch.

“The internship was unpaid and very challenging,” Shemirani said. “There are skills I learned during my time as an intern that I never learned in class as a student.”

Unlike previous generations that transitioned straight into entry-level jobs after receiving their undergraduate degrees, an increasing number of millennials are finding out they have to work as interns for quite some time before they land a job with a self-sustaining salary.

“Internships are much more common for this generation than they were for previous ones,” said Saddleback College Career Guidance Specialist Don Mineo. “They’ve almost replaced the entry-level job.”

Unpaid internships have gone from rarely heard of to the norm. It’s a career obstacle that most Baby Boomers and Gen-Xers did not have to deal with.

Fifty seven percent of TV and 81 percent of radio interns received some sort of compensation for working in the mid 1970s. University of Missouri Journalism Professor Vernon Stone says those numbers have dropped to 21 and 32 percent as of 1991, according to “13 Depressing Facts About Internships in America.”

Large corporations are also providing internship programs for college students. For example, prior to 2006, the Target Corporation went from having no internship program to acquiring more than 1,000 shortly after.

Why has the rise of unpaid internships been so astronomically high in recent decades? Corporations save $2 billion annually from hiring unpaid interns, and employers save $15,000 per person through their interns working without compensation, according to an article from businessinsider.com.

This raises the ethical concern of whether unpaid internships should be legal or not. The United States Department of Labor has six standards a company needs to abide by for their internship program to be considered legal:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
  5. The intern is not necessarily entitled to a job at the conclusion of the internship.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Annie Lowrey of The New York Times pointed out that income inequality has reached its highest levels since the Great Depression.

“The concentration of income in the hands of the rich might not just mean a more unequal society, economists believe,” Lowrey wrote. “It might mean less stable economic expansions and sluggish growth.”

Sluggish economic growth with limited job opportunities makes things difficult for recent graduates with debt from student loans. The American Student Assistance Organization estimates there is somewhere between $902 billion and $1 trillion in total outstanding student loan debt in the United States.The ASAO says these high levels of student debt hinder economic growth.

In a small-scale survey conducted in 2010, 86 percent of recent and soon-to-be graduates were willing to work for free as unpaid interns and 85 percent of recent college graduates have moved back in with their parents upon obtaining their undergraduate degrees. If the only jobs they can get are unpaid internships, then they can’t pay rent to live on their own.

“Income inequality keeps getting higher and college grads are getting internships instead of jobs,” Mineo said. “It’s getting tough for millenials.”

Furthermore, internships are more difficult to obtain for students from less privileged families.

“Internships are expensive,” Mineo said. “It’s difficult for many students to work for free because they can’t afford it. Not everyone gets a lot of help from their parents.”

Unpaid internships can present financial challenges for struggling college students, but they can also teach them valuable skills they can later use in the workplace.

“When done correctly, the intern gains skills and experience he wouldn’t gain in the classroom,” said Saddleback College’s Director of College Broadcast Services Terry Wedel. “It’s also a great way for students to network and make connections for the future.”

Wedel, himself, said he had mixed feelings about unpaid internships. He explained that while he understands the financial burdens it puts on students, it’s also a great way to get real-world-hands-on experience.

“It’s a great opportunity for students to find out if they want or don’t want to work in the industry,” Wedel said. “It should be a different experience than a paid job.”

As one of the six standards set by the U.S. Department of Labor, the internship is not allowed to replace work normally done by paid workers.

“The internships we like are the programs with proper sequencing for students,” Wedel said. “Some internships have someone specifically designated to work with interns and teach them.”

The proper sequence Wedel referred to is one that Saddleback College forces its students to follow to ensure the lawfulness of the work being done as a student-intern.

“If the internship is unpaid, it’s required by law [for the student intern] to be enrolled at a college,” said South Orange County Community College District Project Specialist Kristina Khabovets.

As part of the application, students set three learning objectives that the employer and instructor are required to sign. By signing, the employer confirms that the company will dedicate time and resources to helping the intern achieve those three objectives.

Khabovets explained that this process is designed to ensure that students don’t get taken advantage of as interns.

“Companies should not be making their interns do free labor because that’s illegal” Khabovets said. “They should stick with the learning objectives.”

Compared to previous generations, unpaid internships have become a common position in the job market for millenials, and the debate concerning their ethical standings will continue. On one hand, you have an economy that is being enervated because an entire generation of college graduates can’t afford to be potent consumers. On the other, there are irreplaceable values to gaining hands-on experience as an intern that students likely won’t get in the classroom.

Full photo credit: Sebastiaan ter Burg from Utrecht, The Netherlands (Wikimedia Hackathon 2013) [CC-BY-2.0], via Wikimedia Commons

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