In Tight US Labor Market, Unpaid Internships Continue to Decline

In Tight US Labor Market, Unpaid Internships Continue to Decline

More US employers are abandoning unpaid internships and paying to fill the roles these interns would perform, the Wall Street Journal reported on Monday, as historically low unemployment rates and a scarcity of available workers forces them to compete more extensively for even entry-level talent.

Internships in general continue to rise in popularity, the Journal notes, pointing to a survey from the National Association of Colleges and Employers (NACE) showing that around 60 percent of college graduates in 2017 said they had an internship at some point while in school—a marked rise from just under 50 percent who said so a decade earlier. However, just 43 percent of internships were unpaid in 2017, compared to about half in 2012, NACE found, while the average hourly wage for interns increased 3.7 percent to $18.73 in 2018.

Although unpaid internships are often criticized for exploiting young people’s labor and shutting poor students out of career opportunities, employers are not paying interns merely out of the goodness of their hearts. The Journal hears from several companies that have converted their unpaid programs into paid ones, or turned down opportunities to add unpaid internships, in order to remain competitive in the market for college student and graduate talent. Young people have more options in today’s job market than they did during the recovery from the Great Recession, so employers who want to cultivate future employees through their internship programs may need to offer interns something more than college credit and experience.

Another argument in favor of paid internships is that NACE’s survey data in recent years has consistently shown that students who had paid internships in college were more likely to graduate with a full-time job offer, whereas those who took unpaid internships had no better job prospects than those who did not intern at all. Unpaid programs can also be detrimental to diversity and inclusion, as students from disadvantaged backgrounds often can’t afford to work uncompensated, especially in high-cost cities.

Unpaid internships have also come under attack in the UK, where a report last year found that the vast majority of internships were not publicly advertised, raising further questions about the inaccessibility of these opportunities to students who are neither wealthy nor well-connected. Another UK survey found that most interns were engaged in menial tasks, not the learning and career-building activities they are supposed to be doing. A quarter of respondents to that survey said their internships had either no impact or a negative impact on their future career prospects.