This Day On The Street
Continue to site
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

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.
[Read: <a target="blank" data-add-tracking="true" href=" revisited"><em>The Great Urksby: Princeton Revisited</em></a>]

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."
1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.03 -0.71%
FB $105.41 -0.31%
GOOG $748.15 -0.02%
TSLA $229.64 5.22%
YHOO $33.16 0.61%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs