Should You Take an Unpaid Internship?

(Bloomberg Opinion) -- Ten years ago, I packed my dorm room, put my few worldly possessions in the back of my car and drove six states south to be an unpaid journalism intern for the summer. I’d saved up my pay working as a resident assistant during the school year, stocked up on Costco-sized jars of peanut butter and shelled out about $1,500 for two months of rent in Atlanta. I was ready to live a spartan existence for the opportunity to work for a prominent news organization.

A month before I started, an article questioning the legality of unpaid internships pushed the conversation into the zeitgeist. On the first day, as all the interns were gathered in a conference room, an important-looking executive told us all that we would be the first-ever class of paid interns. Change could happen fast, it seemed.   

A full decade later, unpaid internships remain a common practice in many industries — so long as a few rules are followed, they’re legal — and we’re still discussing whether they truly benefit students and recent graduates. As we enter a recession, it’s likely we’ll see even more companies asking for free labor under the guise of an educational opportunity.

So, should you take an unpaid internship?

As with all personal finance-related questions, the answer is “it depends.” In some cases, it’s a requirement for your degree. Your university may set a rule against getting paid or it may be nearly impossible to find a paid position in your field — a situation common to student teachers.

Students and professionals who are considering an unpaid internship should research how much significant training the program provides for a future career. Reach out to former interns from the program and read reviews online to determine if you’re treated like an entry-level employee (within legal parameters) or merely doing errands and grunt work without any opportunity to hone the skills you’ve learned in college.

That’s not to say all internships should be absent of grunt work — someone has to get the coffee and make the copies. But are you receiving real opportunities to grow in your field in addition to doing some menial labor?  

Internships shouldn’t only be about applying learned skills in a “real-world environment” but also about learning new ones — particularly those you may not easily experience inside a classroom. For example, accepting and applying critical feedback, communicating effectively, advocating for yourself, prioritizing and multi-tasking in high pressure conditions are the “soft skills” that students often struggle to develop in college. This kind of training can make internships a valuable experience, as can the connections and relationships you form during the program.

Of course, the hope is that no student has to go into further debt to finance an internship. Real-world experience is certainly important, but without a nearly iron-clad guarantee that an unpaid internship would convert into a well-paying job, it’s a hefty financial gamble for many students.

And that inherent classism is the fatal flaw with unpaid internships.

It starts with potential double taxation. It’s not uncommon for colleges to require internships in order to graduate. One of my majors required undergraduates to work 400 internship hours, only 100 of which could be on-campus, for credit. Students are generally required to pay for college credits, which means if you’re working an unpaid internship for “credit,” then you may be paying your college to work that internship.

Sure, while you’re not directly paying the employer to be an intern, there are usually additional costs incurred to complete the internship — costs like housing, food, transportation and perhaps even an appropriate wardrobe for the job. All of this makes unpaid internships unrealistic for students who need to earn money during their summer to subsidize the high price of higher education or who already work a job during the school year.

As I mentioned, classism.

Part of the reason I could uproot my own life and move to a new state to work an unpaid internship for the summer was because my parents were willing and able to help subsidize some of the housing cost. Without that support, I would have likely ended up in debt to pay for the added experience on my resume. Perhaps the work-from-home world in our current pandemic reality will enable more internships to be offered remotely to reduce the exclusionary cost of many internships. 

Unpaid internships are often compared to apprenticeships, which, after all, were unpaid too. However, it was common practice for apprentices to be provided a room and food while they learned a skill from a master craftsman. Apprenticeships also more closely mirrored a vocational training route as opposed to a traditional four-year college experience. Perhaps certain collegiate degrees would do well to transition to vocational offerings, but that’s an entirely separate discussion. 

Yes, internships can be foundational experiences and potentially translate into real world employment. But they can also be a waste of time and money, and it’s hard to know which version you’re going to get until you’re already working. If we truly want to create more equal opportunities for students and young professionals to build their careers, the era of the modern unpaid intern needs to end.

The onus isn’t entirely on the workplace to eliminate unpaid internships. University programs requiring significant internship hours in order to graduate can both eliminate the price tag of the “credit” and offer a stipend to students who may need to take an unpaid internship or be unable to afford the startup cost (e.g. travel) to accept an offer.

Such a change may allow for that mythical “American Dream” to actually be more readily available to students of all socioeconomic backgrounds.  

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Erin Lowry is the author of “Broke Millennial,” “Broke Millennial Takes On Investing” and the forthcoming “Broke Millennial Talks Money: Stories, Scripts and Advice to Navigate Awkward Financial Conversations.”

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