Perspective

Pros and Cons of an Unpaid Internship

These days, unpaid summer internships for college students are becoming more and more popular. Many companies have embraced the idea that the experience students gain while interning during the summer is valuable enough to be the only form of compensation that they receive for their work. There has been a widespread debate over whether or not this notion is acceptable. Do unpaid internships benefit or hurt students? We spoke with summer interns to see how they feel about the concept.

THE DEBATE

Overall, do you find unpaid internships to be acceptable or unacceptable?

Michaela: I think they are acceptable. I think if they are eliminated, there will simply be fewer internships, as certain companies cannot afford to pay interns; however, these are the companies that offer interns very valuable experience, because when interning at a small and growing firm, interns are exposed to more than they are in more organized corporate environments, where the company certainly has the finances to pay the interns. Unfortunately, this does put middle/upper-class students at an advantage, but there are other systems that need to be fixed to right this problem before internships can be paid across the board. Additionally, in the case of my firm, we offer travel stipends, some free lunches, as well as the option to work 2-3 days a week only in order to leave time for the student to get paid work as well.

Stuart: I find unpaid internships acceptable given that the employer reciprocates the intern in experience, expertise, college credit, and support at least equivalently to the work put in by the student.

Bill: I find unpaid internships to be unacceptable largely because they reinforce a socio-economic class structure which limits the job opportunities of lower-income individuals. It is only the wealthier members of society that can afford to take an unpaid internship. Typically, these internships are the ones you need in order to build your resume so that you can eventually secure a high paying job that ultimately places you in a high-income bracket. Essentially, I think unpaid internships perpetuate a cycle that keeps way too many people, who might be just as qualified for these high paying jobs, out of the running. Further, I think people should be paid for working – it seems illogical that that hasn’t caught on yet in certain industries.

Lizzie: Overall I find them unacceptable, me and my friends who I work with joke that unpaid internships are a slight form of child labor. We spend hours at the office without even the option or availability to get a part time job!

What do you think a student should consider before taking an unpaid internship?

Michaela: If they can afford the associated commuting costs/lunch costs, and if so, if the experience makes it worthwhile.

Stuart: A student needs to consider if they will be able to financially support themselves while accepting an unpaid internship. More importantly, they should weigh how much value the experience will have towards choosing a suitable career path. Another consideration is the opportunity for a full-time employment offer at the end of the internship.

Bill: Consider the pros and cons and realistically assess your finances. Ask yourself if you actually can afford not to be paid for an entire summer. I chose not to pursue an unpaid internship at a PR firm that I really liked because I knew that working 5 days a week without pay wasn’t financially feasible for me. Then again, if this internship will lead you to your dream job and it’s the opportunity of a lifetime – go for it! Once you take that leap, go about looking for ways to make some extra cash on the side. If you do enough digging, you can find stipends and scholarships that fund students with unpaid internships.

Lizzie: They should definitely consider the commute and the living situation. If you are living with your parents where meals and housing are provided then go for it. If not then my advice is to stay FAR away from an unpaid internship.

Do you have an internship? How did you get it? Is it paid or unpaid? How does this affect your opinion on the topic?

Michaela: I’ve had unpaid internships where I struggled with commuting/lunch costs, but now as the intern coordinator at a small PR firm, I see that we truly do not have the funds to pay interns. It is completely up front and on the table when we offer internships that these are unpaid and for school credit only. I think that if a student cannot afford to take an unpaid internship they will have to seek another type of work. It is not ideal but if the internship required pay, then no one could have the benefit of the experience.

Stuart: I do have an internship and it is paid. I got it through my college’s career network. However, my employer does not directly pay me, my school paid me with a stipend. I think I am fortunate to have a paid internship, but I was also looking at unpaid internships in a different city that if I were offered, I would have taken. It is definitely a circumstantial decision, and I think employers should do everything they can to help the intern if they are unable to pay them.

Bill: I do have an internship with an interior design magazine. I got an interview through one of my mom’s good friends who works on the publishing side of the magazine as an account manager. The internship is technically “paid” – $10 a day for transportation, but it doesn’t actually cover the full cost of transportation. I only work 3 days a week at the magazine, which allows me to work elsewhere (and get paid) the other days of the week. I think having an unpaid internship has given me the experience to properly assess the situation in an unbiased and educated way. It’s kind of ironic, though, that given my stance on the matter, I still jumped at the opportunity to take this job. In reality, I’ve sort of accepted the “unpaid internship ideology,” even though I don’t agree with it.

Lizzie: I do have an internship and it is unpaid. I am also paying for living and groceries on my own so my opinion is for sure skewed, but my broke college life is also a similar situation to thousands of other college students.

What do you think are the pros of an unpaid internship?

Michaela: There aren’t really pros of an unpaid internship. In any case, a paid internship is a better option IF it is available/possible. However, as I mentioned, because of unpaid internships, more internships are available to more students, which is beneficial to a greater number who are able to have and afford that experience.

Stuart: A pro of an unpaid internship is you don’t get caught up in the money aspect of the job. Many interns may simply stick with a job and accept a full-time offer because they are paid well. With an unpaid internship, the student can consider if they actually enjoyed the line of work and a potential career in the field. They can also show future employers that you really care about working in the industry.

Bill: One pro is that if you do your job well, people will appreciate you and recognize you for your contributions. The fact that you are unpaid might actually make people recognize your hard work even more – that’s why it’s so important to work like you’re being paid in your internship (even if you aren’t). Another pro is the connections you make through the internship. The older I get, the more I realize how incredibly important networking is in the working world. Who you know really can make or break a career, especially in its early stages. An unpaid internship will allow you to meet and connect with tons of people – and that’s a really important advantage!

Lizzie: The obvious pro would be experience, if it’s a company that you know you want to work for when you graduate, then it might be worth the pain to take it as it will look great on your resume.

What do you think are the cons of an unpaid internship?

Michaela: Cons are that you might feel less gratified by the work since you are not being compensated – which is the ultimate goal in any future real job. Another con is that it will be a financial detriment.

Stuart: A con is that the intern may become demotivated and there is a lot of moral hazard in doing work you know you are not being compensated for. Employers may also take advantage of unpaid interns by receiving their free labor without providing a meaningful experience.

Bill: When you spend a whole summer working without pay, you become pretty “ok” with it. I worry that unpaid internships might teach kids to be fine with really low pay for a lot of hard work. It’s important to know when to ask for a raise and to recognize the value that you bring to a company; unpaid internships don’t allow young people to acquire that skill set.

Lizzie: The cons are that it is just unfair. Regardless of age, we should be getting paid for the hours and energy we put into working. Or at least a stipend to help you buy some groceries!!!!!

CONSIDERATIONS

Top 5 things to consider before accepting an unpaid internship:

After speaking with my friends, I can understand some different perspectives on unpaid internships. Overall, I’d say that these are the five main things to consider before accepting an unpaid internship:

  1. Does it make sense for you financially?
  2. Is the experience worth it?
  3. Is it full time or part time?
  4. Does the company offer anything such as travel stipends, free lunches, or college credit?
  5. Will you be motivated to do your best, even if you’re not being paid?

THE MATH

Making a decision to engage in an unpaid internship is a difficult one. There are clearly the pros of adding job experience to your resume, learning valuable work skills and building your professional network. However, those benefits are not necessarily ruled out by engaging in a paid internship. For students that don’t have unlimited financial support from their parental units, the cost consideration is a very serious one. Let’s do some math.

Direct Out-Of-Pocket Costs

For direct out of pocket costs, we are not assuming any housing or other costs outside of directly getting to and from the workplace, eating while working, and paying for college credits. Part-time is considered a 3-day work week.

Lunch & Coffee

Assuming $ 13.00 per day

Full-time: $ 715

Part-time: $ 429

Commute

Unless you can walk or ride your bike to your internship, many require you to drive, take a subway, train or bus, park and pay tolls. If a commute is part of you making it to work, let’s assume $18.00 per day when all is said and done.

Full-time: $ 990

Part-time: $ 594

College Credit

In order for your internship to count as a credit at your college, you must pay for that credit. We have heard that college credits can cost anywhere from $500 to $2,500 based on your school. Assuming a college credit costs $1,000 and your internship counts as one college credit, get ready to pony up.

$1,000

AVERAGE DIRECT COST FOR 11-WEEK UNPAID INTERNSHIP

  • Full-time: $ 2,705
  • Part-time: $ 2,023

Opportunity Costs

Now let’s get into the opportunity costs. An opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen. The opportunity cost here is taking an UNPAID internship over a PAID internship.

Assumptions:

  • $ 10.00 per hour
  • 7.5 hours per day
  • 5 days a week
  • 11 weeks
  • TOTAL POTENTIAL OPPORTUNITY COST: $4,125

TOTAL UNPAID INTERNSHIP COST (Full-time): $ 6,830

You read that right. $ 6,830 total cost to take on an unpaid internship.

Think about the $4,125 that would be your gross potential earnings for an 11-week, full-time, $10 per hour internship. Provided you secured a killer opportunity at a legit company, you would still gain valuable experience, great new connections, and something awesome to put on your resume. Obviously, the word “gross” is an operative term as you will need to deduct your food and commuting expenses and then add taxes into the mix, but instead of out of pocket, you have some ka-ching in pocket.

We are not advocating for either or. In fact, HatchPad is a huge advocate of internships, paid or unpaid, as an absolute “must-do” part of the student entrepreneurial journey. We just want to make sure you know what to consider when making that decision.

What are your thoughts? Let us know in the comment section below.

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Bibliography for photos:

http://media.salon.com/2013/10/free_labor.jpg

http://www.lorensworld.com/wp-content/uploads/2012/12/youre-hired.jpg

http://www.natomascharter.org/uimg/file/1416555713560/4806712029920449214.jpg?1440085437416

 

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About the Author: Ryan Shaw

Ryan is a Midwest boy at heart and spent the majority of his life in Columbus, OH. After four years at The Ohio State University, Ryan graduated with a Bachelor of Fine Arts in Dance, along with a triple minor in Entrepreneurship, Education, and Leadership Studies. During his undergraduate career Ryan kept busy joining Greek life, as well as a variety of other student organizations, and took pride in being on the executive board for most of these organizations. Now age 22, Ryan has decided to take his talents elsewhere and recently moved to Los Angeles, CA where is he is attempting to find the intersection of his ever-growing list of passions and interests. He is an aspiring dancer/choreographer, loves spending time with his friends and trying new experiences. Ryan is an avid traveler and generally passionate individual ready to share with the world.

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