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Why the unpaid internship may be on its way out

Scotusblog.com intern Dan Stein

In this widely-circulated image, Scotusblog.com intern Dan Stein ran with news of affirmative action ruling front of the U.S. Supreme Court building June 24, 2013 in Washington DC. Soon, the question of internships - unpaid internships especially - may make it higher up the legal ladder.  

Just how crucial is a summer internship these days? When I stopped by Columbia University in New York recently, almost every student I talked to either had one lined up—or was working on it.

“It’s almost as required as the core classes here,” says freshman Keenan Piper. “If you’re not taking internships over the summer, you’re just getting behind.”

Piper, a pre-med student from Seattle, plans to do a research internship back home at the University of Washington—most likely unpaid. Junior Ethan Ling has scored a coveted paid gig in Hong Kong, after working for free last summer—full time—at a venture capital firm.

“I just had to do it just to beef up my resume,” Ling says. “I think in the job market you just have to do what you have to do to get a job at the end of the day.”

Even for brand-new graduates, employers place a premium on work experience. In a survey by Marketplace and the Chronicle of Higher Education, the number one thing employers wanted to see on a recent grad's resume wasn’t a high GPA or an elite alma mater. It was an internship.

Yet almost half the internships done by last year’s graduating class during college were unpaid, according to the National Association of Colleges and Employers (NACE). And not everyone can afford to work for free.

“I tend to sort of breeze over the ones that don’t pay, because I don’t think it’s really fair," says freshman Brittney Wade, who’s looking for a summer position in public relations. “Yes, we’re doing it for an experience, and that is valuable to us, but I don’t think there should be free labor enforced when it comes to internships.”

A lot of people are starting to agree. Last spring a federal judge threw water on the long tradition of the unpaid internship. He ruled that Fox Searchlight Pictures had broken the law by failing to pay interns who did the work of paid employees. The ruling forced employers everywhere to rethink their policies.

“Any time you post an ad for an unpaid internship, you’re writing ‘Poor people need not apply’ in big letters at the top,” says Mikey Franklin, founder of the Fair Pay Campaign to end unpaid internships.

If the fairness argument hasn’t been persuasive, the threat of lawsuits has been. Magazine publisher Condé Nast just settled a suit brought by some of its former unpaid interns. Rather than start paying, the company shut down its internship program altogether. Many other companies—from Viacom to the New York Times to the nonprofit Lean In—have opted to pay at least minimum wage.

“We’re seeing a gradual move towards paid internships and away from unpaid internships,” says Franklin. “But the culture of unpaid internships is deeply ingrained.”

And here’s where I have to come clean. Though Marketplace pays all of its interns, I myself hired one last summer to work—unpaid—on my own project, a documentary film. Like many interns, she got college credit. But that practice is under fire, too. Recently Columbia announced it would no longer give its undergraduates credit for internships. Other schools have stepped up their oversight.

“All that Columbia giving this credit did was enable employers to offer unpaid internships and say that, ‘Well they get credit, so it must be legal,’” says senior Peter Sterne.

Sterne has done his share of internships, at the Columbia Journalism Review and the New York Observer. He says the fact that he could afford to work unpaid—thanks, Mom and Dad—gave him an unfair advantage. He now runs a website tracking who pays interns and how much. As more companies start paying, he says, there will probably be fewer positions to go around.

“It’s going to be more difficult to get an internship,” he says. “If they have to pay minimum wage, then it’s going to be much more selective.”

That may be happening already. NACE, the group of colleges and employers, tracks internships in an annual survey. The group’s Edwin Koch says typically he sees at least a 5 percent increase in positions every year, even when the economy’s stagnant.

This year?

“We saw no real increase in the number of internships available this year as opposed to last year, whereas there should be a substantial increase at this point,” Koch says.

That has colleges nervous. They’re under a lot of pressure to produce employable graduates who land good jobs. Several higher education groups recently filed a brief in a pair of intern lawsuits now on appeal in New York, arguing that there’s still a place for the unpaid internship.

“The internships tend to be of such value to students that the fact that they are not receiving a paycheck is somewhat secondary to the value of the experience,” says Ada Meloy, general counsel of the American Council on Education, one of the groups that weighed in.

But a paycheck goes a long way—and not just toward paying the bills. NACE found that students who did paid internships were far more likely to have at least one job offer by graduation than those who worked for free.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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