Why Unpaid Internships Are Unethical

The prospect of future opportunities is not a substitute for a fair wage now.

Posted Aug 16, 2019

“Unpaid internships aren't morally defensible.” – Derek Thompson.

As a faculty member in a business school, I often get requests from hiring managers or business owners to refer students for internships. Here’s one I received recently (individual’s name and organization withheld):

“…we are going to implement a digital marketing strategy soon.  I would like to get an intern to help us with the effort.  Should I be contacting the career center, or is there another way to post the opening.  This will be an unpaid position for about 10-15 hours per week at first, then we will re-evaluate our needs for next year.”

Essentially, the individual wanted a graduate business student, someone well-versed with digital marketing strategy, to work for their organization for hundreds of hours for an indefinite period without remuneration. Does this seem like a fair proposition to you in today’s world, where students are burdened by enormous loans, and there are huge and growing income and wealth gaps between groups? 

Unpaid Internships are Widespread

The practice of hiring interns and not paying them a wage is standard all over the world. According to Ross Perlin, millions of individuals, typically college students and new immigrants, work as unpaid interns every year in the US alone. Unpaid internships are widespread in competitive and glamorous industries like politics, entertainment, and fashion where there are far more entry-level candidates than jobs available. Fueled by conventional wisdom, many eager job seekers see unpaid internships as a means to get the foot in a difficult-to-open door on the way to meaningful and lucrative future careers.

Student Working/ Thought Catalog/ Unsplash
Source: Student Working/ Thought Catalog/ Unsplash

The stringency of laws about what constitutes an acceptable unpaid internship has waxed and waned. Broadly speaking, however, unpaid internships are legal. The logic is that the intern is learning marketable skills on the job, and an unpaid internship substitutes for formal higher education. And in cases where students receive academic course credit in exchange for a rigorous, supervised internship, this is true.

In this blog post, I argue that despite being legal, popular, and entrenched as a hiring practice, the practice of offering unpaid internships as entry-level jobs is unethical. When they hire unpaid interns in a way that is not part of a formal academic program for credit, both the hiring manager and the company are behaving unethically. Let’s consider why.

The Ethical Principle of Pay for Work

A fundamental ethical principle that drives economic intercourse in our world today is the concept of fair exchange. When an individual provides labor with their time and effort (mental or physical), the recipient should pay them fairly in exchange for the work they’ve done. It doesn’t matter what we call this labor, a job, a gig, or an internship. If a person performs work, they should get paid. Neither the potential to learn on the job (without academic credit) nor the fact that future opportunities may arise from providing the labor is a substitute for fair wages now. 

Imagine if your employer told you, “We are going to skip this week’s paycheck because you learned new skills at work this week. We feel certain this will help your career tremendously in a few years.” Would you find this acceptable? Would this help you put food on your table? If it’s not acceptable to behave this way with a full-time employee or a gig worker, why is it fair to treat an intern this way?

All good jobs, regardless of whether they are full-time or part-time, temporary or open-ended, offer two things. They provide a wage, and they provide opportunities for learning and growth. A wage is not a substitute for learning and growth opportunities.

What About the Willingness of People to Work for Free?

Not surprisingly, many people have argued in favor of unpaid internships. (These arguments are often made by those who benefit from the free labor). Some people have argued that unpaid internships are simply a manifestation of capitalism in action. When supply (of labor) is high, its costs go down. When it’s high enough, they go down to zero. These people argue that there is no exploitation involved because there are plenty of individuals willing to work for free.

Meeting/ Tim Gouw/ Unsplash
Source: Meeting/ Tim Gouw/ Unsplash

This argument ignores the massive power and information differential that exists between the employer and the intern. The employer has all the power and information, the intern none. The employer offers a glimmer of hope, vague and often misleading, but it is enough for the anxious, inexperienced, and uninformed young person or new immigrant to sign on.

In a significant number of cases, the intern may come from a privileged background and be supported financially by parents, in which case, the pay is a non-factor.  But is this fair for equally (or even more) capable would-be interns who cannot afford to work for free, who must earn a wage to keep life and limb together? An Australian study found evidence of long-term harm to those who couldn’t afford to take unpaid internships. What’s more, the implied promise of a beefed-up resume or a paid job often does not materialize at the end of an unpaid internship.

Another argument in favor of unpaid internships is that they are appropriate when the worker has no experience or skills as a way to gain these things. The problem is that most unpaid internships are offered to, and taken by, highly skilled and low-power individuals. The employer who sent me the email request was looking for an experienced marketing graduate student to work on their digital marketing strategy. An unpaid intern without marketing skills or experience would not be able to do this work.

If a manager and their organization hire unpaid interns outside the bounds of formal academics (e.g., as part of an apprenticeship program that gives academic credit to the student), they are behaving unethically. When you make skilled workers like graduate students work for you without pay under the guise of an internship, isn’t this wage theft? How can this practice be justified or interpreted as anything other than exploitation from an ethical standpoint?