A closer look at the economic effect of unpaid internships on employers and interns themselves.

In 1980, only three percent of college and university students took on internships prior to graduation. Today, over 75 percent of American students complete internships before graduating. Over 30 percent of these internships are unpaid. Over 18 percent of all college internships are not paid and provide no academic credit. Canadian statistics are hard to obtain, since the practice is currently unregulated and there has been no record keeping as of yet, but experts believe that Canada currently mirrors the United States.

Recently, the fields of media, fashion and journalism have offered unpaid internships as a logical undertaking in order for students to further themselves in the labour market. The majority of media internships are unpaid. Similarly, not-for-profit organizations commonly offer students unpaid work placements designed to provide practical experience from companies that are not financially motivated. The thought here is that when a company is not driven by monetary rewards, interns have no monetary expectations.

From the employer’s perspective

Pros
Let’s cut to the chase; employers love unpaid internships because there is no pay involved. That doesn’t necessarily mean interns are exploited because they work for free. From an employer’s perspective, this means that their interns are not motivated by money. There is a whole slew of benefits to having workers who are motivated by non-monetary values. Employers gain some peace of mind knowing that they are providing interns who may not possess enough real world skills or knowledge to enter the labour market just quite yet. Moreover, unpaid interns have most likely never had a real, full-time paying job yet so as their first “employer” you have the opportunity to instruct them in your own way of teaching, and encourage them to immerse themselves in your company’s culture and organizational structure. Down the road, if you happen to offer this intern a paying position they will already be well schooled in the company’s way of thinking.

Cons
On the international front, unpaid internships have come under fire lately with a few recent high-profile cases of big name firms exploiting their unpaid interns in the United States. With this recent negative portrayal, companies who offer unpaid internships run the risk of being labeled as “exploitative.” This will be hugely problematic in the near future as more baby boomers retire and there is a demand for university graduates in the labour market. Many young people already have a negative perception of unpaid internships and have adopted the attitude of “who wants to work for a company that once offered those “exploitative” or “unfair” unpaid internships?

From the intern’s perspective

Pros
Any unpaid intern who has had a positive experience will tell you that unpaid internships, despite no pay, offer invaluable networking opportunities, substantive, meaningful work, purposeful mentoring and quality supervision. Often times these unpaid internships lead to full-time jobs. In trade industries, many proponents of unpaid internships maintain that unpaid internships are essentially apprenticeships, and worth much more than years of expensive university study. As a result of skyrocketing tuition costs, many trade students are opting out of university in favour of unpaid internships. Their attitude is “I have a library card, I’ll research and study there. Why would I pay fees to spend hours writing a term paper?”

Cons
The obvious downsides to unpaid internships are no pay, no benefits and the reality of “termination” at any point. Opponents argue that unpaid internships are “pure exploitation.” On a larger scale, the big picture is gloomy. Traditionally, media, public relations and, most notably, fashion, are known for offering only unpaid internships as entry to the industry. Imagine a young woman who dreams of being the fashion editor of a big magazine, but can’t afford to work without pay at an internship that is basically required. Instead, she works in retail, a dead-end job that will stifle her dreams and probably keep her working in her local mall. Her only other option is to take out giant student loans that will plague her for years. On the other hand, another student is financially supported by their parents while they complete the seemingly mandatory internships before landing a great job in the industry. The fundamental issue here is inherent inequality in the unpaid internship process.

The real world example

The real world example comes from Diana Wang, an unpaid ex-intern at Harper’s Bazaar magazine in New York City, owned by the Hearst Corporation. She is currently suing the corporation in a class action lawsuit alleging she was horrendously exploited as an unpaid intern. Her Harper’s internship was her seventh unpaid internship, in which she was forced work 10 hours a day, responsible for tasks clearly defined for a well-paid executive. Wang was constantly being blamed and held accountable for major tasks that were not meant for an intern. Wang’s case displays the fundamental downside of unpaid internships and the potential economic effects.

The economic effects

The recent negative media coverage has inspired law firms to devote themselves entirely to intern law, UK organizations to hold international rallies in support of unpaid interns, and regulation of internships in the United States. Many proponents of unpaid internships fear that because of lawsuits like Diana Wang’s, internships in general will become obsolete, because they are just too risky for the company’s reputation. Movements like Occupy and the recent Montreal protests display a surge of youth activism, especially when it comes to the labour market. For once, young people argue for regulation in terms of internships and work placements. So what is the future of unpaid internships, at least in Canada? It’s unknown, but with the swell of media coverage of university internships means the topic will be hotly debated. When it comes to forming opinions regarding unpaid work, ask yourself: what is the true value of work?

Source: cbc.ca

Meghan Tooley is a commerce student, active blogger and social media enthusiast from Winnipeg, Manitoba. She often blogs about human resource trends and Canadian labour laws. She writes on behalf of Canada’s Web Shop, a communications firm also based in Winnipeg. Learn more about effective career development and human resource management from Winnipeg recruitment agency People First HR Services.