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How unpaid internships hurt all workers and worsen income inequality

Unpaid internships have long been criticized for favoring privileged students while others who face down a record-high $1.6 trillion in student loan debt are expected to work for free, essentially setting up income inequality before their careers even begin.

How unpaid internships hurt all workers and worsen income inequality
[Photo: blackred/iStock]

This story is part of Fast Company’s editorial package “The Intern Economy.” In the spirit of back to school and new opportunities to learn beyond the classroom, we’ve collected the personal stories of interns and managers to reveal what this step on the first rung of the career ladder means for the future of work. Click here to read all the stories in the series.

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During her junior year at Iowa State University, Josie* embarked on the time-honored search for a summer internship. But most of the ones she wanted at nonprofits or policy advocacy organizations couldn’t offer her more than a line on her résumé.

“The majority of them were just not paid or [were] underpaid,” Josie tells me. “I would see internships with a stipend of $1,000, and that’s not practical at all for living in Chicago. It would just not be doable without someone helping you out.”

Josie was paying for her own college tuition and housing by pulling seven-hour shifts bartending and taking about $30,000 in student loans. Though her parents would occasionally help with, say, groceries or gas if Josie was in a pinch, working full-time at an internship for free simply wasn’t an option, even with the savings she had accrued through bartending. “The industry I wanted to go into just wasn’t practical for my financial situation,” she says.

Josie ended up taking an internship at a PR agency that did some public affairs work, albeit for oil companies—not quite the not-for-profit experience she had sought out. “It’s really challenging to do what you want to do when you have to rely 100% on yourself to be able to afford it,” she says. “I know people who’ve gone into the industry I’ve wanted to go into because their parents were able to help out. It just wasn’t something I could do.”

Unpaid internships have long been criticized for favoring privileged students who can afford them while students like Josie face down a record high of $1.6 trillion in student loan debt and are expected to pad their résumé with unpaid work experience to make themselves more appealing to employers. When middle-class or low-income students can’t afford to be cheap labor, those unpaid internships effectively shut them out of their desired career paths—while opening doors for privileged students who already have a leg up.

There isn’t much data on how many students and young professionals are subject to unpaid and underpaid internships. What we’ve gleaned about the state of unpaid internships stems largely from a handful of research institutes and personal anecdotes—and in recent years, a spate of lawsuits.

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According to a 2018 survey by the National Association of Colleges and Employers (NACE), about 43% of internships were unpaid, as compared to half of internships in 2012. And the hourly wage earned by interns in 2018 was up 3.7% from the previous year, ranging from $14.47 for associate degree students to $32.35 for doctoral students. That’s despite an overall increase in the number of interns. The NACE found that nearly 60% of 2017 graduates surveyed had an internship while in school, up from almost 50% ten years prior.

And yet, the unpaid internship persists. In some industries, it is virtually a rite of passage—the drudgery of free labor seen as merely paying your dues in exchange for a foot in the door. Most employers want to hire people with work experience, and more than half prefer that experience to be an internship or co-op. Unpaid internships are especially common across the social sciences and humanities, industries where budgets are strained and pay scales stacked against workers. Congressional interns were infamously expected to work for free until recently. Interns employed by the United Nations, which seeks to fight inequality the world over, remain unpaid. The same is true of students interning across media, fashion, and the arts.

The shifting landscape of unpaid internships

The legality of unpaid internships has always been murky, and the new guidelines introduced by the U.S. Department of Labor last year actually make it easier for employers to make the case for unpaid internships. But the conversation around unpaid internships has shifted in the last decade, as a slew of media and entertainment companies—Fox Searchlight Pictures, Hearst, Condé Nast, Warner Music, and NBCUniversal—have been slapped with lawsuits from unpaid or underpaid interns. Condé Nast shuttered its intern program altogether soon after settling its lawsuit, though other companies saw it as an opportunity to revisit their policies on unpaid internships.

Universities can also play a key role in making internships more equitable since many unpaid internships justify lack of pay by offering academic credit. When I was a student at Northwestern University’s journalism school, we had to pay tuition in exchange for the opportunity to work full-time at prestigious titles, with no pay aside from a small stipend. Since I was placed in New York, I received a larger stipend of $1,200 for an 11-week internship—just over $100 per week. (In cities with a lower cost of living, some interns received no more than $600.)

Northwestern has since revised its degree requirements, no longer making the residency program mandatory, and the majority of residency sites now pay their interns. “Virtually every publication that is affiliated with us and set up through the program pays at least minimum wage or, in very few instances, a stipend,” says Charles Whitaker, the dean of Northwestern’s Medill School of Journalism, Media, Integrated Marketing Communications. “We’re trying to wean ourselves off the stipend sites, but unfortunately some of them are sites where a lot of students want to work, so we haven’t cut them off entirely. But we have fewer than we used to.”

Whitaker admits the change was a response to both student feedback and the lawsuits that cropped up a few years ago. But he finds that, especially as budgets get slashed left and right, many media companies still try to lobby for unpaid internships. “Everyone says it’s budget,” Whitaker says. “I can’t tell you how many people come to me and say, ‘We can’t pay, but it’s such a great experience. The experience is worth its weight in gold.’ And I say, ‘That may be the case, but it doesn’t pay their rent.'”

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In an industry hit hard by layoffs and pay cuts, a paid internship also helps students understand their worth. “If we tell them their labor is worth something, we have to try and put the strength and influence of the institution behind that,” Whitaker says, “and try to force the industry to say, ‘Yes, it’s worth something, and we’re going to pay something.'”

Making the unpaid internship passé is also inextricably linked to diversifying workforces in terms of race and gender, given the reality of which workers tend to get paid more and have the ability to accumulate wealth. “We talk about diversity and wanting newsrooms to reflect society,” Whitaker says. “It is still a reality that people of color and women are unpaid. And people of color are not entirely, but generally coming from backgrounds in which they cannot afford to enter this incredibly low-paying field, particularly coming from an institution like Northwestern, which is very expensive.”

Right now, the rallying cry for putting an end to unpaid internships is loudest across art organizations and museums, which are often propped up by unpaid and underpaid labor. Earlier this year, a group of workers in the industry started a spreadsheet detailing job titles and salaries, along with information on race, gender, cost of living expenses, and so on. When that document got traction, the group started another spreadsheet to specifically shed light on intern pay, which they saw as the root of the problem. Countless entries detail internships with no pay—some of which were up to a year long—or stipends of $2,000 or less for months of labor. Many people cited “babysitting” or “my parents” when asked how they supported themselves financially. “This is part of a much longer trajectory on this issue, and many others have raised it before and after us,” a spokesperson for the group, Art + Museums Transparency, tells me. “It was very clear to us after the first salary transparency spreadsheet that one key route to pay equity was ensuring no one was working for free in museums. It’s not the only issue, but it is a foundational one.”

Income inequality starts with an unpaid foot in the door

On the whole, women are actually more inclined to accept unpaid internships. (In most states, unpaid interns also don’t receive basic protections against workplace discrimination or harassment because they’re not considered employees.) The pay inequities in industries with unpaid internships, many of which are propped up by female workers, are only exacerbated by the prevalence of unpaid internships, which are less likely to yield lucrative full-time work than paid internships are—if they result in job offers at all. That unpaid labor also sets a precedent for what female workers expect and demand from their employers: Those willing and able to take unpaid internships are more likely to accept less than they’re worth when they do start getting paid.

A lower floor for wages hurts workers of all stripes, especially people of color. A demographics report by the Andrew W. Mellon Foundation makes clear that art museum staffers in the U.S., for example, are overwhelmingly white and skew female. “As the Mellon report shows—and our experiences bear out—the arts and museums tend to have greater proportions of female-identifying workers,” the Art + Museums Transparency spokesperson says. “But unpaid internships hurt everyone because they suppress wages across the board and reinforce the notion that one works ‘for the love of it’ rather than needing a wage to cover basic needs like rent and food.”

In June, before the release of the internship spreadsheet, the Association of Art Museum Directors (AAMD)—whose members include 227 museum directors across the U.S., Canada, and Mexico—actually passed a resolution calling for art organizations and museums to pay their interns. According to Alison Wade, chief administrator at the AAMD, who helped push through the resolution, the resolution was the product of years of discussions around how to make the industry more equitable and less of a haven for a wealthy, well-connected, white minority. “Unpaid internships are a big part of museum labor,” Wade says. “This also really overlapped with a lot of our conversations about diversity, equity, access, and inclusion. So if we’re looking at how to get a different demographic working in our museums, this is a good first step in terms of changing the makeup of who can even accept internships.”

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Wade knows change won’t come overnight—or, as in media, some institutions may opt out of internships altogether rather than make room in the budget for a paid intern. “We understand that many of our museums cannot wave a magic wand and start paying their interns,” Wade says. “However, we really want to see people start to move in this direction. Even if you’re not suddenly able to pay all of your interns today, can you pay more and more and more of them and start chipping away at this issue gradually. We’ve tried to provide our members with resources showing how some museums have managed to start paying their interns.”

Still, the Art + Museums Transparency group points out that one thing the resolution does not explicitly state is that even interns who receive academic credit should be paid. “Although we really applaud the AAMD resolution, which is brave and thoughtful,” the group states, “it does not address for-credit internships which are doubly problematic because they ask people to work for free and pay university credit for doing so—which is insane.”

The alternative to working for free

For Josie, as for many students, not being able to afford the unpaid internships she encountered meant taking an internship—and eventually a full-time job—that didn’t quite align with her initial career aspirations. The internship she was able to afford paid her $10 an hour, which she supplemented by bartending on the side. But it also meant doing work she didn’t quite believe in since her company’s clients included oil companies. “I don’t really like advocating for something I don’t necessarily agree with,” she says.

After graduating from college last year, Josie parlayed that experience into her current job, where she works with tech clients. Josie still has her sights set on nonprofit work but isn’t convinced she’ll be able to make the jump even when she feels more financially secure. And she still has about $22,000 in student loan debt. “In PR, when you get into a certain niche, it’s kind of hard to move away from that niche when you’re looking for new job opportunities,” she says. “At this point, I definitely don’t see myself moving away from [technology clients] anytime soon.”

Finding a better way to distribute opportunity

Balancing the scales isn’t just about doing away with unpaid internships. While interns continue to serve as cheap labor in some fields, intern pay has inflated in other industries. Tech and finance companies pay interns handsomely, in hopes of snagging the “best” talent (albeit not the most diverse). An intern at Facebook, for example, reportedly earns $8,000 a month; Amazon and Google aren’t far behind, paying interns at least $7,500 each month. Competition is stiff, which means the plum paid opportunities—the ones more likely to feed into prestigious full-time jobs that pay well into the six figures—are often awarded to affluent, privileged students who’ve been building their résumés since middle school.

Distributing opportunity more equally is the crux of the mission driving diversity nonprofits like Code2040, which pairs black and Latinx fellows with internships at top tech companies in an effort to close the racial wealth gap. Miryam Ramirez, a Code2040 fellow interning in New York this summer, cites social mobility as one of the reasons she chose to major in computer science. “If I graduate with this degree, I’ll make money somehow,” she says. For her internship this summer, Ramirez requested to be in New York, where her family lives, to cut back on housing and food costs. Though she has a scholarship that covers her college tuition and housing, Ramirez foots the rest of her expenses, from food to textbooks. The pay from her internship will help her save up to potentially study abroad next year and give her some extra cash for “going out and trying to have the regular college experience.”

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When it comes to internships, it’s not just that affluent students don’t have to worry about money, Ramirez points out. They reap the benefits of moving in certain circles. “A lot of internships are through references and knowing someone,” Ramirez says. “It’s not what you know—it’s who you know. If you come from a background where your network isn’t the kind of background that can get you an internship, then you’re already at a disadvantage.” And the playing field isn’t leveled if you get the internship, either. “I think there are just cultural disadvantages—not knowing how to network or do things that people seem to just grow up knowing,” she says, adding that she would have had no idea what to expect from a one-on-one meeting if it weren’t for Code2040.

But like Josie, and so many of her peers, Ramirez still wants to balance her financial reality with finding a semblance of meaning in her work. “I’m trying to find things that meet in the middle,” she says. “I definitely do want to somehow give back to my community. I feel like the usual route is working at a nonprofit, but nonprofits don’t pay that much. So then it becomes a question of: Can I afford to save the world?”

*Josie requested that only her first name be used to protect anonymity.

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About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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