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Why unpaid internships aren't ethical, explained

Updated: May 4, 2023

By Ada Jenkins

Megan is a college student who landed her dream internship for the summer. As an aspiring broadcaster, she interns for a local sports team in Charleston.

The position is unpaid despite having up to 12-hour days, five to seven times a week.

“I’m desperate,” says Megan, explaining why she accepted the offer. “I need the experience.”

Unable to find any paid positions, she decided to search for opportunities near her parents in Charleston so that she could live with them and evade paying rent.

“I knew I had to try and find an opportunity in Charleston,” says Megan. “There’s just no way to pay rent amongst other things while working all those hours and not being paid.”

This is a widespread issue for students across the globe. In fact, it has been a problem present for centuries.

Unpaid internships common concept

Going as far back as the ancient civilizations in Rome, Greece and Egypt, the position was known then as an “apprenticeship,” a word deriving from a Latin root that translates to “someone learning.”

Apprenticeships consisted of young people working for free under a master of specific crafts for the sake of learning the necessary skills to eventually break out on their own. Apprentices could be as young as 12, working under their master craftsman for up to seven years.

It was cheap labor in exchange for training.

Families would even pay craftsmen to allow their sons to become apprentices.

An apprenticeship eventually morphed into the internship which was originally just for studying the ways of medicine in exchange for cheap labor.

Similarly to ancient apprenticeships, they benefited the employer.

During the fight for labor rights in the 1940s, the Fair Labor Standards Act of 1937 started making companies follow minimum wage and overtime regulations.

However, in 1947, the Supreme Court ruled a company did not have to pay employees during their training period. Ever since then, employers have been responsible for following seven criteria when providing an internship position.

Unfortunately, it’s not well regulated and a lot of it is up for interpretation. This allows employers to bend the rules and find loopholes to fit their standards.

What is the modern internship?

In the 1970s, it was reported that one in ten people obtained a college degree. Now that’s one in three.

The increase in college students - and the demand for experience in today's job market - have led to a very competitive internship market.

For example, 84% of college students claim they intend to intern prior to graduating.

Because there is an added pressure to secure experience opportunities before all the other candidates, students are desperate. As a result, they are willing to take unpaid positions which businesses take full advantage of.

Megan explains that one of the reasons she took an unpaid internship is because aside from general competition, the competition for paid internships is also competitive in itself.

“There's thousands of people applying for (the paid internships) because everyone needs money,” says Megan. “There’s no shot they pick me out of a thousand people who are just like me ya know?”

Some other notable statistics:

  • Former interns are 15% less likely to be unemployed and get paid 6% more than students who never did an internship.

  • Previous interns are 35% more likely to receive at least one job offer before even graduating.

  • As for financials, the national average hourly wage for paid interns is $20.76

  • That number is reduced to $12.75 an hour for South Carolineans.

That number may seem low but it’s definitely not the lowest interns can earn.

Almost 40% of internships are actually unpaid.

And in 2016, only half of college graduates held paid internships. Not only are unpaid interns earning zero dollars, but paid interns are actually 32% more likely to get a full time job-offer from their internship employer.

While it may seem unorthodox to not pay a college student for their time and work on top of an already bustling schedule, it’s technically legal.

The Fair Labor Standards Act (FLSA) has required employers to follow seven criteria in order to not have to pay an intern. But the regulation of these criteria is not super strict.

Kristin Wichmann, Associate Director for Experiential Learning for College of Charleston’s Career Center, remarked, “I just feel like it's so loose. Very open to interpretation, unfortunately.”

Wichmann is a passionate advocate for making sure College of Charleston student interns are being compensated in some form or another.

“It's kind of a joke. You know, and very frustrating,” says Wichmann.

As an intern, Megan had no idea that there were regulations.

“I didn’t even know there were rules for internships,” says Megan. “I thought it was free reign.”

Why unpaid internships in the first place?

1. Cut costs

The obvious one is that everyone wants to save money- even large corporations with an abundance of funds. But why?

Beth Goodier, internship coordinator for CofC’s Department of Communication, says the simple answer is because they can.

“I think even big businesses struggle with their budgets, right?”

Right. Just look at celebrities like the Olsen Twins who declined to pay their interns. They got called out for it and were ultimately sued, but many businesses continue to offer only unpaid internships.

“I'm not trying to excuse it away,” Goodier added. “What I'm saying is if there's a system that allows for a cost cutting measure, any company would take it.”

Although many businesses don’t offer anything at all, employers are actually able to compensate interns for their work in ways aside from paying them.

One option is offering credits for student interns. However, this can be a result of ulterior motives.

“A lot of people offer the credits for insurance reasons,” says Wichmann. “Just to kind of get (the FLSA) off of their backs about it.”

2. Non-profits

While it may seem more forgivable for a non-profit organization to not pay interns, they still jump through a lot of loopholes and often hide behind the facade of being a non-profit to avoid doing it.

The justification is that as long as the main beneficiary of the internship is presumably the intern, then the organization can do whatever it wants.

Wichmann says many of her students are interested in interning for nonprofits and a lot of those positions aren’t paid. But it’s not because they couldn’t afford to offer it.

“Don't get me wrong, we do have some nonprofits that are offering hourly wages and things along those lines,” she said.

3. Worldwide events

Catastrophes like the pandemic in 2020 that hurt a lot of companies was a legitimate reason for not being able to pay interns.

And Goodier explains that there had been some progress in the push for paying interns but COVID-19 retracted whatever steps were taken.

“The pandemic, that was one negative, real negative, in terms of what it did for internships, I think, because it sort of reset us back a little bit further.”

But Wichmann is less forgiving.

“I think that any excuse that employers can get to not pay, whether it's a recession, you know, whatever,” she said. “They’ll take it.”

4. Small businesses

Small businesses are often in the same boat. By being small, they believe they can justify not paying for actual labor.

But in many ways they are taking the most advantage of interns - saving money by not paying but also using the work of interns to help advance their business.

“Small companies are literally working you and expecting you to work a lot of hours very quickly,” says Goodier, adding that social media and marketing interns specifically run into this problem. “And they're using your product, and they're not paying you.”

Wichmann said they have companies reaching out and asking 20-30 hours from student interns when many of them don't even have anyone on staff who can train the student.

“They just want free labor,” she said. "And that's not okay.”

While some small business owners may not actually have the funds to pay interns, there are some that just simply don't want to.

“I get it, sometimes they just don't have that kind of money,” says Goodier. “But I also know that many of these small companies could pay their interns and are just really happy to not have to.”

Unpaid internships are unethical

They influence discrimination. One example given by Wichmann was internships on Capitol Hill.

“What they were finding is that a lot of the students who are doing these congressional internships are students with advantage.” Students who have financial help.

$6,800 is the average cost of living for a student intern. That amount can pile up even more depending on what city you’re in.

For example, in Charleston, rent skyrocketed 36 percent from 2021 to 2022. The average rent is now $1,509, up $397. And that’s not even including housing, food, transportation, etc.

“I can’t afford my own apartment down here or really anywhere,” says Megan. “My parents help but I don’t want to put that stress on them. It’s easier for everyone just to live at home for the internship.”

Essentially, you have to already have money to take a position where you don't make any money.

For financially independent individuals, having an unpaid internship most likely means they have to have a paying job as well.

As a result, they have to sustain a paying job on top of an unpaid internship, a rigorous school schedule, and all other outside factors.

Goodier shares, “I had one student a couple years ago, who had three jobs and internships.” While that seems impossible, it is doable. “He said, ‘look, people can do it, It's just really hard.’”

Megan explains that she could theoretically work a paying job at night on top of the hours she commits to her internship. However, she also expresses how strenuous that would be.

“That’s unrealistic. I’m already working 12 hour days sometimes,” says Megan. “I come home exhausted as it is, it’s insane.”

“That is a financial hardship for a lot of students if you're doing an internship that's unpaid, and also paying tuition on top of that. So we really do encourage that hourly wage,” says Wichmann.

A fight for change

Wichmann and Goodier are not alone as administrators advocating for change. There are efforts across all platforms to change the attitude businesses have towards unpaid internships.

Experience should be available to everyone, not exclusive to certain backgrounds and demographics. Campaigns such as Pay the Interns and job recruiting websites like Zippia make it their mission to accelerate the changes that need to be made.

Efforts being made locally by College of Charleston include the utilization of a job search platform known as Handshake.

Employers have to be approved through individuals like Wichmann and Goodier before offering positions to students to ensure that only the most ethical and beneficial opportunities are advertised.

Megan believes it is up to businesses themselves to take the first steps towards change.

“It’s scary because everything really is in their hands,” she says. “They have what we want and they don’t care what we have to go through to get it, they have all the power.”

It’s time for businesses to move away from excuses and face the facts.

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