This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Are Unpaid Internships Mere Exploitation?

By Eric Reed

NEW YORK (MainStreet)--The data is in on unpaid internships, and with pretty nasty results. The practice broke into the headlines a little over a year ago with a set of labor suits against Fox Entertainment and Gawker Media filed by former interns alleging that they were owed back pay for what amounted to menial positions. Since then the critics have piled on, painting a picture of exploitation and abuse by companies simply looking to hire de facto entry level employees while saving a quick buck.

The standard, in fact, does seem fairly damning. According to Department of Labor guidelines, an internship can only qualify for work without pay if it meets several fairly rigorous standards. These include training similar to an educational environment, not displacing any other employees and "that the employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded."

So how many interns honestly do work that's of no value to their employer? Sorting mail might not be glamorous, but if the intern doesn't do it someone who's getting paid will.

According to data, there isn't even a pot of gold at the end of this rather shabby rainbow. Recent studies from the National Association of Colleges and Employers (NACE) suggest that students who take on unpaid internships do no better on the job market than those who had no internship at all, and considerably worse than those who got paid.

The data seems conclusive and the result seems not only inevitable but also intuitive; even college students deserve to make their rent. Yet data that seems conclusive on the surface can mean something very different once you start to pick it apart, just as it does here.

It's a problem of missing the trees for the forest or, in other words, deciding that because some of the picture looks bad, all of it must be. According to Philip Gardner, director of the Collegiate Employment Research Institute at Michigan State University, condemning unpaid internships altogether misses the real point.

"There's different reasons that students get involved with unpaid internships," Gardner said. "If they're good internships, whether they're paid or unpaid, if they're designed well and its working for the student and employer, then both sides gain from it."

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,424.85 +162.29 1.00%
S&P 500 1,862.31 +19.33 1.05%
NASDAQ 4,086.2250 +52.0640 1.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs