Unpaid Internships: Weighing the Pros and Cons
Internships have become increasingly important for job seekers in the United States, offering valuable professional experience and training to college students and recent graduates. While some internships are paid, many are unpaid, leading to a debate about their worth. This article explores the pros and cons of unpaid internships to help you decide if it's the right choice for you.
The Rise of Unpaid Internships
Internships haven't always been unpaid. The loophole in the Fair Labor Standards Act (FLSA) allowing for unpaid internships didn't come about until the 1940s. With so many college graduates, employers have the leverage to demand unpaid work.
What is an Internship?
An internship is a structured learning experience that gives you an opportunity to break into the industry or career of your choice. Internships can be either part-time or full-time, and you often have a mentor who provides guidance and feedback along the way.
Legality of Unpaid Internships
According to the Fair Labor Standards Act (FLSA), any “for-profit” employers are required to pay their employees. But, this is where the line gets blurred, as interns and students are not always considered “employees” under FLSA. The Supreme Court made a ruling in 1947 that legalized unpaid work in certain situations.
In order to determine this, a “primary beneficiary test” is used by the courts to assess whether a student qualifies as an employee. They use seven factors to examine who benefits more from the relationship: the intern or the employer.
Read also: Understanding Unpaid Internship Laws
Unpaid internships may be legal, but this question is tricky, as interns and employers may disagree on who benefits more. It’s safe to say both benefit.
Pros of Unpaid Internships
Despite the lack of financial compensation, unpaid internships can offer several benefits:
Gaining Hands-On Experience
Sometimes, the hands-on experience you gain is very important. Even if you do not receive compensation for your work, you will still get training and education. A college lecture can only give you so much insight into a career. Having an internship allows you to really experience it firsthand.
Building a Professional Network
Internships often offer access to a strong professional network. The age-old adage "it's not what you know, it's who you know" holds now more than ever. And networking with just anyone isn't enough. An internship is an amazing way to do just that. By connecting with your coworkers, supervisors, and any other contacts you might make while working, you open up many doors of potential opportunity.
Building a Portfolio
In fields like marketing, design, or media, unpaid internships often allow you to build a portfolio of real work that can be showcased to future employers. Generally, you’ll choose your internships based on your career interests. This means you’ll be working in a field relevant to your long-term aspirations. In other words, it helps you test drive a career that you are considering but may not be 100% sure about.
Read also: Accounting Internship Benefits: Paid vs. Unpaid
Less Competitive
Unpaid internships are much less competitive. They are becoming increasingly common these days, meaning there is more supply. Additionally, employers are more likely to respond to unpaid internship opportunities. This is especially common among small businesses. Smaller companies may not have the budget to pay you. But they may still be good options.
Flexibility and Low-Pressure Environment
With an unpaid internship, there are no obligations. There should never be any pressure on you to perform. By nature, an unpaid internship allows you the chance to grow and learn about the job and industry without some of the expectations of a paid role.
Potential for College Credit
Oftentimes if an internship is unpaid, they’ll “pay” you instead with college credits. These credits count towards your overall graduation requirements, and you essentially get them for free (you pay with your time and work, but not your money). Some internships partner with your career services center to evaluate your experience and potentially award college credit toward graduation. This is an opportunity for students to combine college completion and employment experience.
Cons of Unpaid Internships
Unpaid internships also have several drawbacks:
Lack of Compensation
Starting with the first and most obvious downside: you won’t get paid. This means you will be putting a lot of time and hard work into your internship without the reward of a paycheck.
Read also: Are Unpaid Internships Legal?
Financial Strain
And since you’re not earning anything, it can put a financial strain on you. Especially if you are trying to pay for college and the cost of living with little to no help. Unpaid internships don't just not compensate interns. They may actually end up costing you to do the internship. Others are forced to live at home or dig into their savings to afford an unpaid internship. The financial stress of getting unpaid experience is not worth it for many. Before you go ahead, ask yourself if you can afford to work without a paycheck.
Potential for Exploitation
It can be tempting for employees to dump all of the tedious, menial tasks onto the intern, such as filing paperwork or making copies-especially an unpaid one.
May Not Lead to Higher Income
The average unpaid intern earns $5,000-$15,000 less than paid interns per year after graduation. Research from the University of Essex found that students who completed unpaid internships were significantly less likely to receive job offers or competitive salaries after graduation.
Ethical Concerns
The ethics of unpaid internships cannot be overlooked. These programs often exploit ambition under the guise of opportunity, requiring interns to perform meaningful work without compensation, which would never be expected of full-time employees or contractors.
Legal Risks for Employers
One of the most significant risks of unpaid internships is legal exposure. Under the Fair Labor Standards Act (FLSA), interns must be compensated if their work provides tangible benefit to the employer.
How to Make the Most of an Unpaid Internship
If you decide to pursue an unpaid internship, here are some tips to make the most of the experience:
- Consider how much time you can realistically commit. Will this unpaid role take away from other paid opportunities or educational commitments?
- Strive to make a good impression on your bosses and colleagues. Working hard and showing off your problem-solving skills is the best way to impress.
- Ask questions throughout your process, like “How am I doing? Do you see any areas for improvement? Let’s look at the data.
- Ask yourself: Will this position provide you with meaningful learning opportunities? Not all internships are created equal.
Alternatives to Unpaid Internships
Fortunately, ethical alternatives to unpaid internships exist. Paid Micro-Internships, such as those facilitated through Parker Dewey, provide a flexible and cost-efficient model. Micro-Internships enable companies to complete high-impact projects while evaluating potential future employees to build a more inclusive talent pipeline. They also benefit students by offering paid experience, resume-building opportunities, and real exposure to professional environments.
Some sectors tend to pay their interns more often than others. For example, technology, consulting, and finance tend to offer paid opportunities.
Paid Internships: An Alternative
Paid internships compensate interns for their work, whether with wages, stipends, or college credit.
Benefits of Paid Internships
The first benefit is obvious… Pay. You’ll notice that many internships opt to pay an hourly wage or salary. But you might also find some that pay weekly or monthly stipends. The average hourly wage of an intern tends to fall between $15.67 and $19.51 for freshmen and seniors in college, respectively. The number of hours can also vary depending on the employer. Expect to have at least 20 hours of availability a week, and possibly up to 40 hours.
The second benefit, which may be the key factor in choosing a paid internship over unpaid, is the higher likelihood of a job offer. News, 65.4% of paid interns were offered jobs upon completion while only 38% of unpaid internships received job offers.
How to Find Paid Internships
Some sectors tend to pay their interns more often than others. For example, technology, consulting, and finance tend to offer paid opportunities.
If you start applying for summer internships at the end of the school year, you are already behind. Strong applicants start applying as early as the fall of the previous year. 59.4% of students who did not undergo an internship cited not knowing how to find opportunities as a major barrier to entry.
You may have your sights set on a single company or role. But if you want a paid opportunity, it may be better to cast a wide net. As mentioned, some of the most competitive internships want applicants to have experience already. Alumni, personal contacts, and even social media can help you land the internship you want most.
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