Adam Smith (Institute) weighs in on unfair internships

April 29, 2010

Liam Ward-Proud at the Adam Smith Institute (“The Adam Smith Institute is the UK’s leading innovator [NDLR: I believe this is self-assessed] of free-market economic and social policies.”) has a very engaging and articulated post (rare thing) about one of the premises behind this blog’s position, namely that interns should be paid because employers benefit from their work.

“The basic principle alluded to is completely false.”

You may be surprised to learn that I almost agree with him. Here’s my comment, in case my readership is not already reading Liam regularly.

Thank you for taking the time to review the basic principles behind worker’s wages that puts forward. You’ve certainly refined my own thinking, as the owner of the blog, on the nature of the wages and the morality of unfair internships. What you haven’t done though is to change my view that unfair internships are unfair.

You win: “A wage is a price at which a worker is prepared to sell her/his labour, this price is defined as the equilibrium between what the employer is prepared to pay and the labourer is prepared to sell at.” Of course, you acknowledge that the expected productivity is part of the calculus, so “completely false” was a bit exaggerated. My description was incomplete.

You actually bring in an interesting principle though: the power relationship between the employee and the employer. I dare say that as long as there is unemployment out there, supply exceeds demand and this relationship is in favour of the employer. Actually, regardless of the mechanism, it is plain to see, through the spread of unfair internships, that interns are losing the race to the bottom, accepting to work without pay. This is why there are mechanisms that level the playing field by setting minimum standards and collective bargaining mechanisms. The interns are rarely, if ever, part of a collective bargaining system and, while they should, it seems that they are not yet protected by standards that protect the rest of the labour force.

Which leads us to the idea “workers should be free to value their own labour”. This is true to an extent, the limit being once the individual choices are detrimental to the group. I am not saying anywhere on my blog that unfair internships are not beneficial to the individual interns. They are as beneficial as making a personal sacrifice gives a leg up to the individual. But it also forces everyone else to make that same sacrifice to level the playing field. This competition is all good, but there are minimum standards that offset the lower bargaining power of the interns and they should be enforced for them as for the rest of the labour force.

So your argument is not in favour of unfair internships, it is one against minimum standards and bargaining power. I have no doubt that this blog believes that such standards are detrimental, but it is a debate that your side is not winning in the real world at the moment.

The idea that internships opportunities would disappear if internships had to be fair is actually a good thing. Speed would increase if speed limits were removed, robbery would increase if it wasn’t punished, etc. The idea that the mere existence of something makes it desirable rests on weak moral ground.

Once again, an honest thank you for your coverage and analysis. It was a bit snarky, but I deserve it and it’s all in good fun.

What do you think?

The Evolution of Interns

February 16, 2010

Forbes had an interesting article about the Evolution of Interns back in April. It starts with a fundamental question:

Almost everyone seems to agree that an internship is a valuable part of career development. But if you were in college before the 1980s, chances are you never did anything called interning. So where did the experience come from, and how did it become such a seeming necessity for today’s future job-seekers?

This is an answer to all those who claim that internships are necessary to gain experience before entering the job market formally. If it were the case, unfair internships wouldn’t be a recent invention. First experience on the job market is earned with a first job, which comes with a salary. And the gain of experience never stops from then on.

“Are you serious?”

October 18, 2009

I haven’t fully made up my mind about companies that charge to find internships. But it should raise a red flag when one of your clients says this:

‘Are you serious? They’ll show up for five days a week and work for free?’

Too good to be true, innit? Indeed. That’s why it’s illegal.

Unpaid Work, but They Pay for Privilege

August 9, 2009

The New York Times has an article about the increase in demand for internships during the crisis and those who take advantage of young graduates who are even more vulnerable than usual to charge them for unpaid internships that are actually unpaid jobs.

With paying jobs so hard to get in this weak market, a lot of college graduates would gladly settle for a nonpaying internship. But even then, they are competing with laid-off employees with far more experience.

To quote a quoted professor of education at Standford University: “This is just ratcheting it up another notch, which is quite frightening.”

And if you wonder why a mainstream media had the guts to cover unfair internships, for a rare time, the explanation is in the byline: “Gerry Shih is a summer intern at The Times. He is paid.” This being said, there is no mention of the legality of it all, even though unfair internships are an illegal practice hidden in plain sight.

10 Rules for Hiring Unpaid Interns

September 1, 2008

Again and again, people who know what they are talking about repeat that internships are not free labor. Now, Workforce Management has spoken with a lawyer who provides a checklist. Let’s quote only one line.

Interns can’t be used to replace paid employees.

Who still doesn’t know this? Too many, apparently.

Off-campus interns shouldn’t have to pay on-campus fees

August 30, 2008

This opinion piece in the Montana Kaimin misses the main point that people shouldn’t have to pay to work, even young people. Still, it points at yet another problem with credits-for-internships: the fees that interns pay to a uniersity often cover on-campus services that interns do not receive will working on-site.

Why You Should Pay Your Intern

May 3, 2008

Please bookmark this one: accountants explain to the world why interns should be paid. I’m not offended that they argue from the perspective of the employer, quite the opposite. The rule that providing better wages gets you better staff is pretty much accepted everywhere – everywhere that does not offer and unfair internship, that is.

Some good stats:

In a recent survey by the National Association of Colleges and Employers, nearly all responding organizations who use their internship programs as part of their college recruiting effort pay their interns.

And why not mention that interns themselves get more out it:

NACE’s study of the students from the Class of 2007 found that students who reported dissatisfaction with their internships tended to be in unpaid programs.

And what do they mean by “paid”? A stipend to buy a muffin, a coffee and a bus ticket (one-way) maybe? Not so:

Overall, employers reported offering their undergraduate interns an average of $16.33 per hour — and nearly $25 per hour for interns at the master’s degree level.

The data is aligned with the law which is aligned with ethics which are aligned with progress. Now that’s an opportunity your business won’t want to miss.