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398: Unpaid Internships

What are your opinions on unpaid internships?

Show notes and links:
https://www.forbes.com/sites/realspin/2014/04/22/the-unhappy-rise-of-the-millennial-intern/#265782f51328
https://www.fastcompany.com/3061904/are-unpaid-internships-legal-yet-heres-why-the-law-is-fuzzier-than-ever
http://theweek.com/articles/644729/are-unpaid-internships-ever-okay


Full episode script

Around 2010, when the Obama Administration started cracking down on unpaid internships that did not fit the legal criteria to be unpaid. This crackdown also reignited the ethical arguments about if internships should ever be unpaid. It is an especially difficult debate when discussing the Catch-22 of jobs — that you need experience to qualify for a job, but you need the job to get the experience.

The prevalence of internships, as opposed to formal apprentice or entry-level work jobs, is also fairly new. Specifically, quote:

The National Association of Colleges and Employers reports that, from the mid-1980s to the mid-2000s, the share of college graduates participating in at least one internship rose from less than 10 percent to over 80 percent.

For a long while, a six-factor test put in place by the Department of Labor helped determine if someone’s internship could even go unpaid. Some of those factors included if the employer gained bonafide benefit from the work an intern did, and if the internship provider was a for-profit company.

But then in 2016, a lawsuit against Fox Searchlight Pictures was settled and the Second Circuit Court of appeals created their own test. From Fast Company’s article on the suit:

What the Second Circuit did was essentially toss out that test in favor of its own seven-factor test, this one more concerned with the extent to which an internship is part of a bona fide academic pursuit. For instance, a key factor of the new test is whether an internship is tied to an educational program. Part of the reasoning, the court opinion holds, is that the more stringent DOL test is outdated and inconsistent with modern-day internships. But the ruling also gives companies more leeway to not pay their interns.

Yet, if you’re getting your foot in the door, unpaid work can be worth it, right? Well, only maybe. Returning to data from the National Association of Colleges and Employers, quote:

The hiring rate for students with any history of paid internships is 63 percent. But the hiring rate for students who complete an unpaid internship is dramatically lower — 37 percent — and nearly the same as for those who don’t complete any internship at all, 35 percent.

This script may vary from the actual episode transcript.