Tom Warwick & Winston Smith
“Labor was the first price, the original purchase – money that was paid for all things.” – Adam Smith
In the summer of 2015 I, along with most of my friends, had the opportunity to intern on Capitol Hill. For three months I commuted in and out of DC on the metro, had my lunch in the Rayburn cafeteria, and occasionally went out for drinks with the rest of the “Hill-tern” Mafia. I worked a 40 hour week, all without the benefit of a paycheck. The only reason I was able to do this was because I am a privileged white resident of the mid-Atlantic whose parents could afford to help underwrite the expenses associated with this experience. I’m incredibly grateful to them for this, but I also realize that others are not as lucky. For many students, the option of forgoing a summer of paid work is simply not an option. As a result they miss out on the experiences gained by many of their peers, and perhaps more importantly, our nation’s employers lose out on the diversity of opinion, thought, and experience that interns of differing backgrounds bring. More importantly, these students lose out on crucial experience and resume lines that can land them a real job. The ends, though, cannot justify the means. These students should not be disadvantaged and taken advantage of due to the inability, or the aversion, for an entity to pay their worker.
All too often, interns who complain about not getting paid are not viewed as exploited labor, but rather as the stereotype of lazy millennials. This Catch-22 scenario leads to coexisting yet antithetical perceptions of college labor; privileged if they expect their parents to support them and ungrateful if they ask their employer to pay them. But, the truth is that working the what is truly a full time job for free presents a significant burden for students. When accepting an unpaid internship there is an immediate loss of other potential income. For example, let’s assume that a student lands a job working 8 hours a day cutting greens at a golf course on Maryland’s Eastern Shore. If that student/future blog writer works for 8 hours a day, 5 days a week, all summer he could expect to make just under $3,500, not an insignificant sum. This $3,500 would be able to cover a little more than a third of the national average cost of tuition. For the 59% of college students who pay for college themselves or rely on loans/financial aid, the loss of this income is significant.
While the loss of potential income is enough for many bright, capable students to seriously consider passing on an unpaid internship, it’s nothing compared to the actual cost of accepting it. According to a study by Times and Numbeo, the cost of living during an internship can be as much as $6,200. The first expense comes when the student decides to take the unpaid internship, since an unpaid intern is required by the fair labor standards act to receive some sort of educational credit. The problem is that the cost of these credits fall on the student who expect the fees to run at least a few hundred dollars and possibly even into the thousands. For example, at the University of Virginia, a one-credit internship course costs about $450 for in-state students and $1,400 for out-of-staters. After the upfront cost of the course fees, if a student does not already live in or near the location of their internship, they have to think about the cost of relocation, housing, and feeding themselves. Depending on the city, these expenses could easily add up to as much as $5,000 over the course of a summer internship. In the end, most internships not only mean missing out on earned income, but having to shell out almost as much as the cost of a regular semester. This means that many interns lose money as a result of their unpaid internship. Now let me ask you, would you go to work everyday and pay for the pleasure?
The financial burden described above can have long term ramifications not only on students, but on the workforce as a whole. By limiting who can have access to an internship, along with the connections and opportunities that come with it, we fall into a cycle of compounding exclusion. Those who come from wealthy, privileged interns will be cycled into positions held by former wealthy, privileged interns. This system continues to entrench already cavernous class divisions that exist. If we are to believe that internships are the path to success, that more internship experience means more job opportunities, how is this not stacking the deck in favor of those who need this experience the least?
While paying our interns could help to mitigate both the exclusion inherent in the system, paid internships can also present a number of benefits to the organization’s hiring them. In the short term, firms can expect to attract a larger pool of candidates to choose from, which in turn will allow them to be more selective about who they bring on. Additionally studies have shown that higher pay results in better performance and a greater worth ethic, so companies can expect that the interns they pay will be more motivated than those working for “experience.” Paying their interns also allows employers to assign interns work that would benefit the company, something that a firm would otherwise be unable to do under the fair labor standards act. In the long term, companies with paid internships have a significantly higher chance of retaining their interns as future employees. A study by the National Association of Colleges and Employers found that almost 40% of employers reported a higher five-year retention rate among employees they hired from their paid internship programs. This saves employers around $15,000 in training, hiring, and turnover costs for each employee they hire from their intern pool.
Unpaid internships are not only morally, but also economically, bankrupt. They represent a net loss for, not only those who suffer through unpaid labor, but for those who also house it. While this system may have been a wink and a nudge in the past to show that doing unpaid work during a college summer may lead to better job prospects, it has now devolved into direct exploitation. The potential reward has dissipated as this once optional resume padding has become a requirement. Further, the facts show that having an unpaid internship will often make you less employable while a paid internship is more likely to provide the intern with the promised reward of future employment.
It’s clear, in the end, paid internships benefit everyone. Demanding pay for your labor is not childish whining by privileged elites, it’s the desperate cry of those impoverished witnessing the cycle of poverty roll onto them. By making requirements for future labor outcomes dependent on current economic status we allow class stagnation at best and growing disparities in future economic outcomes at worst. While the unpaid internship may have begun as an honest attempt to expose students to their chosen field, it has been warped into a fairytale told to us by those who see an opportunity for cheap, desperate, and naive labor. It has become but yet another example of elites creating systems in which they profit while everyone else must share the cost. Ask yourself, who truly benefits from unpaid labor? Hint: It has never been the little guy.