MoneyUnder30.com

It’s Time To End Unpaid Internships — Here’s Why

Unpaid internships promise work experience and a shot at a competitive entry-level job. But really, they’re evil. Why taking an unpaid internship may harm your career more than help it.


Warning: Unpaid internships may do you more harm than good. (Credit: FlickR: Juhan Sonin)If you’re unemployed, or still in college or grad school, you may be tempted to take an unpaid internship to beef up your resume.

You’d be in good company – The National Association of Colleges and Employers reports that two-thirds of the class of 2013 interned during their college career. Half of those internships were unpaid.

It’s not just college students who are working for free. According to the New York Times, an increasing number of millennials with college degrees are unpaid interns, or working long hours for small stipends.

I know that unpaid internships, especially if they seem fun, can be tempting. I once worked for free at a now-defunct magazine. Like many people starting out in creative fields, like journalism, I thought interning was just part of the dues I had to pay. Even Steven Colbert was once told the only way he could work on the Late Show with David Letterman show was to intern for no pay.

But take a cue from Colbert and say no. Research shows that unpaid internships cause more harm than good to your career and financial health.

Unpaid interns take jobs away from potential, salaried employees

Ross Perlin, author of author of “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,” found that unpaid internships save companies $600 million dollars per year. Why pay a college grad $30k per year if you have a revolving door of educated people willing to work for free?

Some believe unpaid interns are a big reason why 53 percent of recent college grads are unemployed or underemployed. “Jobs that should be paid aren’t, which increases unemployment and drives down wages,” says Ross Eisenbrey, vice president of the Economic Policy Institute.

Unpaid interns earn less in the future

Many unpaid interns hope that the companies they toil for (for free) will like them so much, that they’ll hire them in a paid position. Wishful thinking, says Eisenbrey. “Unpaid internships harm you once you enter the labor market. Your chances at finding a job, and the pay you receive in your first job, are lower.”

The NACE found that only 37 percent of unpaid college-age interns received at least one job offer post graduation compared to 63.1 percent of graduating seniors who had a paid internship experience.

Paid interns also earn bigger bucks post graduation. The median starting salary for those who have paid internship experience is $51,930. Unpaid interns go on to earn a median salary of $35,721.

College students often pay to work for free

In an attempt to circumnavigate U.S. labor law, most companies require that unpaid interns obtain college credit for their internship.

So as if it’s not bad enough (and usually illegal) to work for free, unpaid college interns often end up shelling out thousands of dollars for the “privilege” to do so.

Intern Bridge, a college recruiting and consulting firm, found that nearly 26 percent of college students must take an internship in order to graduate. Far more students take unpaid internships in exchange for college credit of their own volition.

These unpaid internships usually fulfill three credit hours at most universities – the same as any other class. Universities also charge the student the same amount as they do any other class – thousands of dollars – despite the fact that the student receives little in exchange from the university.

After all, the student is interning at a business off campus. They’re usually isn’t a “class” held in conjunction with the internship. Professors generally don’t check up on the student intern at their workplace. Most students don’t even turn in a paper about the internship to professor. Intern Bridge found that 59 percent of college students receiving credit for internships don’t give their schools any documentation about their experiences at all.

“Colleges and universities make kids pay tuition for internships that cost the schools nothing,” says Eisenbrey. “A four-year degree is now so expensive that students are graduating into a weak job market with $60,000 or more in debt. Anything that raises the price of an education or makes it harder for young people to earn enough to keep their debt burden low is counter to their interest.”

In the last year or two, several courts have found that companies violated U.S. law by employing unpaid interns. Fearing lawsuits, a few companies, like Conde Nast, disbanded their internship programs, and hopefully began hiring paid employees to complete the work interns once did.

But until all companies get on board, it’s up to you to say “Thanks, but no thanks” if someone asks you to intern for free, no matter how great the opportunity may seem.

Share your thoughts on unpaid internships: yeah or nah?

Get access to our best money hacks:

Join over 11,000 other young professionals and learn how to get out of debt by 30, increase your income this year and invest for financial freedom.




100% free! I will NOT spam you and I will NOT share your email.

About Patty Lamberti

Patty Lamberti is a freelance writer and Professional-in-Residence at Loyola University Chicago, where she teaches journalism and oversees the graduate program in digital media storytelling. If she doesn't know something about money, you can trust she'll track down the right people to find out. You can learn more about her at www.pattylamberti.com. And if you have any story ideas, or questions about money etiquette that you'd like her or an expert to answer, email her at moneymannersqs@gmail.com.

Comments

  1. Hi Patty,

    This is an interesting article but do think some of the stats can be a bit misleading.

    “Paid interns also earn bigger bucks post graduation. The median starting salary for those who have paid internship experience is $51,930. Unpaid interns go on to earn a median salary of $35,721.
    Read more at http://www.moneyunder30.com/end-unpaid-internships#Qj3oCJwH5mVWhq4J.99

    I do not think whether you had a paid internship or not affects your pay as drastically as implied by this statement. Many of the student with paid internships are studying engineering, computer science, and nursing. These student have gained skills early in college that companies see as valuable and are in fact a bargain at their intern pay rate. These degrees also have significantly higher starting pay than may of the degrees people are working towards when they have to accept unpaid internships.

    I think this statistic has much more to do with what you study than the internship you worked.

  2. “The NACE found that only 37 percent of unpaid college-age interns received at least one job offer post graduation compared to 63.1 percent of graduating seniors who had a paid internship experience.”

    This is a false dichotomy. The more relevant comparison would be between individuals who had an unpaid internship and those who had no internship, which is likely what will happen if unpaid internships are eliminated.

  3. “Paid interns also earn bigger bucks post graduation. The median starting salary for those who have paid internship experience is $51,930. Unpaid interns go on to earn a median salary of $35,721.
    Read more at http://www.moneyunder30.com/end-unpaid-internships#7j4q2WHV8WYM3Pll.99

    Interesting. I’ve had both. Unpaid was during my undergraduate years…for college credit and the Paid was the summer following my graduate program. Yet my first job was no where near close to my field, but I had no choice as interview after interview with more relevant positions led no where. I was only making $30,000. Luckily I was able to get into my field within the same organization….for $27,000. After shuffling a couple times after that I’m finally where I should have started 2.5 years later, at $43,000. I guess I am WAY below the median….even with a applicable masters degree.

    Experience still counts….

    So I too would like to know the other variable…those that have never had an internship…where do they start?