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.

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US Labor Department Adopts New, Flexible Standard for Regulating Internships

US Labor Department Adopts New, Flexible Standard for Regulating Internships

Earlier this month the US Department of Labor announced that it was revising its test for determining whether interns count as employees entitled to protections under the Fair Labor Standards Act, citing recent federal court rulings that rejected the previous test:

The Department of Labor today clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.

The department has issued a fact sheet explaining the standard it will enforce going forward, which is more flexible than the previous test and is based on the rubric the courts have used to judge who is the “primary beneficiary” of the internship and the “economic reality” on which it is based:

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Most Interns Engaged in Menial Tasks, Not Career-Building, UK Survey Finds

Most Interns Engaged in Menial Tasks, Not Career-Building, UK Survey Finds

Whether paid or unpaid, internships are meant to be mutually beneficial to the employers who offer them and the young people who pursue them, offering interns a leg up in the job market and valuable experiences that enhance their skills and employability. Unfortunately, a recent survey of interns in the UK finds the vast majority of them feel their internship was more of a one-sided deal, Emily Burt reports at People Management:

More than half (53 per cent) of the 18 to 30-year-olds surveyed by Lloyds Banking Group said they spent the majority of their internship completing menial tasks such as printing or photocopying documents, while more than a third (33 per cent) said the majority of their day was spent making tea or picking up lunch for colleagues. Overall, 83 per cent felt their employer was the main beneficiary.

The study also suggested that poor experiences of internships could be hurting the confidence of young people at the start of their careers. A quarter (25 per cent) of respondents said their internships had either no impact or a negative impact on their future career prospects, while only three in 10 (32 per cent) felt their internship had boosted their employability.

Internships have gotten a bad rap lately in the UK, particularly as the country has grown increasingly aware of how its entrenched, historical class divides are affecting social mobility and competition in the labor market. A bombshell report earlier this year claimed that the actual number of internships is six times the number advertised to the public, with the vast majority offered only to those with the family or school connections to know about them.

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Report: Most UK Internships Not Advertised to Public

Report: Most UK Internships Not Advertised to Public

Social mobility has been under the spotlight in the UK recently, with universities and employers being called upon to address the disadvantages people from less affluent socioeconomic backgrounds experience in the university application process and the job market. For example, mitigating the effects of class bias is a key rationale behind UK employers adopting “college-blind” recruiting—no longer targeting graduates of elite institutions—or removing the requirement that applicants have a college degree at all.

Another practice that is being increasingly scrutinized as a barrier to social mobility is the unpaid internship, which critics argue gives an unfair advantage to young people with well-off families who can afford to support them while they gain experience in their field without earning a salary. Late last year, the government said it was reviewing the use of unpaid internships and considering imposing new restrictions on them, if not an outright ban.

A new report from the Institute for Public Policy Research gives critics of internships some fresh fodder, Marianne Calnan reports at People Management, finding that the total number of internships available in the UK each year (around 70,000) is more than six times the number that are publicly advertised (11,000), with the remainder effectively reserved for those with the right connections to know about them:

Not only do many of these 60,000 additional positions not offer meaningful learning opportunities or working conditions, they entrench privilege because they are largely inaccessible to those without connections or knowhow, it has been claimed. They also discourage businesses from investing in graduate or other permanent recruitment.

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