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How unpaid internships hurt all workers and worsen income inequality

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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.

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.

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 legality of unpaid internships has always been murky,........

© Fast Company