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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Reasons Unpaid Interns are Bad for the Economy

By Nathan Parcells

SAN FRANCISCO (TheStreet) -- The power of a great internship can go a long way. From providing employment opportunities to beefing up resumes, internships can be the key young professionals need to stand out from the crowd. Can they also contribute to the economy?

A recent NBC News article asked the question. While many paid interns clearly contribute to the success of an organization, the case is different for unpaid interns, who aren't seen as contributors because organizations dole them out menial tasks. In fact, with lawsuit after lawsuit over unpaid interns popping up, the significance and need for internship programs has been questioned.

The main problem, besides the fact students and recent grads aren't getting paid for their work, is that they can hinder the growth of an organization.

Here are some reasons unpaid internships can be damaging:

No competitive compensation

When interns aren't paid, they lose the chance to be financially independent. Currently, 65% of students rely on financial help from their parents during their internship. Sixty percent of the 20 million Americans who attend college each year already borrow money to help cover the cost, and studies show debt is increasing for four-year graduates.

When pay is not competitive -- or when there is no pay -- interns are less likely to stay fresh and ambitious. Marketplace value also diminishes the second they enter the job market since they can't negotiate better compensation. This is not only bad for the economy, it hampers healthy competition for them as future professionals.

Instead: Try to pay your interns at least federal minimum wage. Other forms of compensation can include stipends, professional development opportunities and skills training.

1 of 2

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.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

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