Unpaid Internships: Opportunity or Exploitation?

Job opportunities for the class of 2009 have dipped even lower than the last major drop of the early ’80s. Career prospects are looking bleak for entry level candidates. Many graduates are now scrambling around trying to figure out what they can do to create some sort of future for themselves, while at the same time coping with blows to their confidence, financial security and independence. Many are applying to take Masters Courses to try and gain further qualifications in the hope of achieving a more competitive edge in 2010. Others are taking non graduate or temporary jobs.

Internships
A final group are looking at internships to try and build up some work experience.  However, many are finding some employers are expecting these young people to work without pay. That’s right for nothing. I have mixed thoughts about this. On the one hand I can see how any opportunity is better than none. It is also a difficult time when highly experienced older people are being laid off, or being asked to reduce their hours and salaries or to take unpaid extended holidays. The skill sets of these young people are currently not great – but they do represent future investment, not just for companies, but for whole economies.

Who can benefit?
What bothers me is who is actually able to take advantage of these unpaid intern schemes? It seems that only graduates in financially advantageous situations can profit from this development, where they are able to support themselves for 6 months with no income at all. With student debt  rising ( in the UK the average is reported to be £15,700, but according to the National Union of Students goes up to as much as £26k) already loans are going to take up to 12 years to pay back. Alternatively, more affluent parents are stepping in to financially support their graduate offspring in their efforts to gain any type of work experience. Other families are reaching deep into their pockets to pull out money they can’t really afford, thus jeopardising their own financial futures.

Free labour?
I recently coached a young adult, the son of a service employee, a talented quadri- lingual business graduate, who interviewed in a London based, international holding company for an intern position.  The young man’s salary demand was a subsistence allowance, which would barely cover his living costs. However, the employer made it clear that the expectation was that the position would be unpaid. The graduate clearly tried to negotiate some sort of basic compensation, but was unwilling to risk bad relations and any future employment opportunities by pushing too hard. But he simply couldn’t afford to take the job.

I would have thought, and hoped, that showing you can negotiate for yourself, is an indication that you can indeed negotiate for the company.  Unwilling to get deeper into debt and his family unable to help to support a period in a high cost city like London, he was obliged to walk away. I researched the company and I promise you, they are far from being in the red.

How far do they self advoate?
The dilemma that these kids experience is how hard do they self advocate? How far do they go and how much debt do they get into, just to have something on their CV?  Having run graduate recruitment and entry level schemes in my career, I know that this level require training and supervision to be fully and correctly utilised  to gain any valid experience. Without that, unless they are very lucky, they will end up doing routine,  low level clerical jobs.

Corporate gain
To me that is pure exploitation of the market for corporate gain.  There have always been certain sectors where interns are expected to work just to have the experience: fashion and film are just two that spring to mind. But there was usually some sort of opportunity in the distance. With full economic recovery projected as being in 2014, how long will the class of 2009 have to wait?

It also means that  less well off graduates, despite having equal qualifications will  struggle to compete with graduates from more affluent families.

22 thoughts on “Unpaid Internships: Opportunity or Exploitation?

  1. Colin Lewis

    Dorothy, great post and highly relevant. I believe every one should be paid accordingly and this has been the guidance passed down by writers and business people such as carnegie, Napoleon Hill, Frances Hesselbein. From the age of 12 I earned money from a paper round, then a milk round, through college by selling ladies shoes…I gained valuable experience of business and service throughout and needed the cash to subsidise studies and ‘living’.

    I’m in the belief that this is exploitation when it comes to employers not paying anyone for work done.

    In fact I am surprised to learn there are employers that do not pay interns….shocked!

    Colin

    Reply
    1. Dorothy Dalton

      Hi All – many thanks for all your comments. I agree it isn’t black and white which is why I have mixed feelings about the whole issue and pose the question rather than make a statement for all the reasons that you have raised . We have all done low paid jobs to gain experience in our careers, but there was usually a light at the end of the tunnel, either within the organisation or on the job market in general. My concern is about companies who do not have financial difficulties, using the recession as an excuse for recruiting free labour. This means that graduates from less affluent backgrounds are disadvantaged and if they do go down this route to try to jump start their careers, they will start their professional lives steeped even further in debt. I think it’s an issue that deserves serious thought at corporate and governmental level.

      Reply
  2. Meghan M. Biro

    Hello Dorothy-hope you are enjoying interesting adventure travels as you find time.

    Thoughtful commentary here. Internships offer invaluable experience for students + graduates to gain deeper perspective on the “real world” culture of careers. Smaller ventures especially benefit from this type of synergy.

    This is clearly a case-by-case topic and really depends on the size of the organization and the nature of the intern program. If (keyword) executed wisely – internships can provide a win + win for all parties.

    Reply
  3. Santosh

    1 Yes it is clear look like a exploitation.

    2 But how to look from HR perspective ? if they are firing experienced , old workers , how can they hire and pay new interns ?

    Question is really difficult to deal as it is not in black and white and has many shades to it.

    Reply
  4. chris masuy

    Difficult topic, and not as black and white.

    I can only say that I have hired people at very low wage in the past or even unpaid so that they could learn within our company. I have sometimes wondered if we were taking advantage of them.

    Looking back, in some ways we might have been, not that we have always been in a position to pay them. We knew with our name on their CV’s, and the opportunities they had working on first class projects. Many doors opened to them within 6 months to a year. Probably a far better start to their careers than for many who leave University with debt. And still can’t get a job.

    We are a small company, with big clients and we’re somehow proud of our skills. As the creative director, I know when I left university, I had to juggle with three jobs before I had the skills and the means to start my own venture.

    That was three years of paddling seven days a week. Maybe thousands of unpaid hours to get the skills I had to acquire, that had never been taught in universities and with no family support.

    If there wasn’t such a gap between the real world and what we learn in degrees and masters. This would not happen.

    This world is still unfair, and that might be the point! We can’t change it all! So what can we do?

    By accepting to train someone. I always tried to teach them all they could learn in real life situations, considering what was the most appropriate to their personality and ambitions. Helping them to start their own ventures too is that’s what they wished. As a matter of fact, I am still helping some of them or keeping in touch after all those years.

    Finding the right company or people who help you even if you’re unpaid can be one of the wisest move you could make. If they refuse to pay you, but that is the experience you really need! It might be hard but negotiate so that you can work part time for free with them and another part time job paid somewhere else.

    They are some things you simply can’t buy in life. Love, Experience, real skills, self-confidence, life time relationships and support.

    Clerical work? CEO? Self employed?
    I don’t think one is worst than the other.
    They’re all have pros and cons.

    With responsibilities, come the risks and pressure many would not even want to deal with.

    Thank you for your posts! Great blog!

    C.

    Reply
  5. Wally Bock

    When times are hard, exploitation increases. But “unpaid” internships are not necessarily exploitation.

    Internships can offer payments in at least currencies. There is money, of course. And there is experience. There are connections. And there is learning.

    If there is compensation in the last three that the intern finds fair, then the currency part can be zero. That has to be clear going in. And the company has to deliver on its promises.

    If a company uses the term “internship” to mean unpaid labor, then the internship is exploitive. If the company promises opportunities for growth and connections but only delivers grunt work, the internship is exploitive.

    Reply
  6. Dorothy Dalton

    Wally – thanks for your insights. I agree that compromise with an opportunity for growth and connections is a win/win. If not the deal is very one sided!

    Reply
  7. Alicia-Ann Caesar

    Thank you for addressing this topic. There are many aspects to this problem to consider, as both parties are gaining something can it be called exploitation? The students/ interns are increasing their future earning power so their is gain for them. It actually costs companies to work with these interns: supervisory hours, project development so the students get a full experience, and depending on the industry there are liabilities to consider can we really expect companies to pay their tentured staff and interns? Isn’t it like paying for the same job twice?

    If we are going to discuss fairness in this arena I think we should really focus on the fact that this is a serious competition in the present and future between the “Have and Have-nots,” the students who put themselves through school by working full-time or even those with student loans can not afford to take on non-paying opportunities no matter how fantastic, thus when they do hit the job market their work experience seems to be “lacking” compared to their wealthier peers.

    We can only hope that that more companies set up programs that pay for their employees higher education that way students get to gain monetary compensation and real world experience at the same time.

    Reply
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  10. AT

    This so takes advantage of workers. No matter how little responsibilities these interns have they are actually working… most likely more administrative work but working just the same… producing value for the companies. Back in the 70’s I interned (although it was called a summer job back then!) in an insurance company sorting paper policies to be distributed… clerical but paid…. It’s all about greed in today’s society … the more the companies can keep expenses down the higher executive bonuses will be … it’s just sickening…

    Reply
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  13. KP

    Hi,

    I am actually currently on an Internship in the UK. Fortunately for me I am paid for it at £6.00 per hour. However even though I do get paid there are a few drawbacks: I do not get travel expenses ( costs me £213 a month for trainfare), I do not get sick pay, holiday pay, paid over lunch and do not get overtime pay which means I cannot work over 35 hours a week. My pay is also subject to tax and National Insurance contribution and although I know I can get tax back, it still leaves me with little money to get me through the month. I cannot afford to rent anywhere but luckily I can stay with my fiance at his parent’s home.

    Although I do understand that in the long run the experience I am gaining will help me – it is very hard to keep your hopes up of getting anywhere. My current Internship is my fourth one in seven months, and throughout working I’ve also been looking at full time work but have been told I’ve either got too little experience or too much as I have a degree.

    I understand it is hard for employers to hire people – and I know that graduates can not only be costly but a bit of a risk for the company – however I do think that we are being exploited. In my current and previous internships I am sometimes doing work which I would be getting paid a lot more to do if I was on a permanent salary.

    From talking to my friends I have found that the ones on Internships feel ‘that there is no light at the end of the tunnel’ and some feel going to University was a waste of time. I also think that we don’t know who to turn to for advice. I used my careers service at Uni a lot (especially since I worked there) and even the careers advisors were confused to why I wasn’t getting work.

    Internships are good – as a TEMPORARY measure, after seven months and no permanent job prospects it does get you downhearted.

    Reply
    1. Dorothy Dalton

      Thank KP for your comments. I realise how difficult it is for interns to come forward. I wish you every success in your future career and hopefully attention will be drawn to your situations.

      Reply
  14. intern

    The company where I am doing my unpaid internship treats us graduates, like free slave labor with no expenses paid at all. The only thing we get is free coffee! My tasks are getting paper from the printer and reorganizing a shop. You have no idea how disheartening it is, when you have a degree and your employers treat you like dirt. I am not gaining much at all from this internship. It’s actually costing me money and the company could not care. It makes you feel why brother.. for a reference?

    Reply
    1. Dorothy Dalton

      Hi there – I really sympathise with your predicament. I can only suggest that you try and stay positive, ask for more meaningful tasks and feedback on how you are doing. In every situation there is some sort of learning experience I sincerely hope that you are able to find something to focus on in this. The alternative is to register an official complaint – but that is a choice only you can make. Good luck!

      Reply
  15. intern_2

    “Unpaid Internships: Opportunity or Exploitation?”

    May I share my experience with a company where “Exploitation” would be a better lable than “Opportunity”?

    I did an internship with a British company called Internship-uk.com in the beginning of 2009, far outside London in New Romney. This company recruits (usually) young students worldwide to work for one of Studios92 Group of companies. I was contracted to work with Studio-Solution and then with Gift-Tours, both of which are Studios92 Group of companies. This internship almost cost me more than 3,000 GBP for 6 months but I could get a sponsored internship. This meant that it cost me 500 GBP for 1 year. I was lucky to get a sponsored contract as they seemed to have stopped offering those shortly after. This money, as they require you to pay before you get there, is for shared accommodation, free softdrinks and food but I don’t understand why I should pay so much and work for free at the same time. Arranging my own accommodation would have resulted in declining my application. Also, there were days of no food or softdrinks which means they breached their own contract?!

    Anyway, I went for it and left soon. I found the company was not ‘real’ enough as the majority (about 90%) of people working (about 40) were interns. In my experience the majority were unhappy about the situation they were in, level of professionalism, support and guidance during work and not to mention the (lack of) privacy outside working hours. Unfortunately they couldn’t leave without losing all the money, so most of them stayed to get that certificate. I can also remember a warning system being enforced for absolutely ridiculous things. To me this comes close to the 3-strikes-out policy as what I was told by HR that one could get fired when reached 3 official warnings. And there are so many more strange things going on there that makes you wonder and question but that would make this comment way too long.

    Based on my experience I’d say this seems to be a company that mainly earns money from students in 2 ways:
    – free labour as students work for free, as an intern
    – students pay for accommodation, as a customer

    I guess this is a great business model! If it is totally legal in the UK to have so many unpaid interns, I’d recommend companies in UK to hire more interns too! It will be even worth it to startup a company just like this right now! Displace the majority of your regular employees and charge the students 500 to 1,200 GBP per month and put 3 interns in 1 room. With 40 paying students you will earn a minimum of 20,000 GBP per month which is more than plenty to buy your own houses to accommodate them or to rent rooms for them! Ka-ching!

    It would have been a total different experience if we, students, were respected, getting paid for the hard work and weren’t required to pay for their accommodation. But since that is not the case, I can only inform students of my experience so that they know what they are up to if they accept an internship with them. So my experience is almost similar to commenter “intern”. I completely symphatise with him/her about how disheartening it is. A (sincere and public) apology from the management to interns who felt mistreated would be great, but I am afraid that they are not the apologising kind.

    My experience with them gave me a very negative views on UK and British People. I started to wonder if I liked this British mentallity and whether UK is where I want to do business in the future. Soon after that I found an paid (!!!) internship in London and I am grateful to learn and experience UK and British people to be very polite, articulate, patient, kind, respectful and definitely worth moving to for business and fun!

    Reply
    1. Dorothy Dalton

      Hi there – thanks for sharing your experiences. They sound horrendous so I’m glad that there was a positive outcome in the end. If you read my post https://dorothydalton.com/2010/02/04/the-enslavement-of-gen-y/
      The Enslavement if Gen Y – there contact details of services where in the UK you can file a complaint and resceive payment retrospectively. Since I wrote those pieces the TUC and CIPD havc issued statements of disapproval of such exploitive intern systems. Please take advantage of the process.

      Reply
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