Do Unpaid Internships Make You Worse Off?

This morning, I read a LinkedIn article on unpaid internships, where I saw the following,

First off, it is worth noting that getting a paid internship in college is a very smart idea. The National Association of Colleges and Employers recently did a survey of people who graduated in 2013 with a bachelor’s degree and found that a graduate who did a paid internship while in college made an average starting salary of $51,930 – compared to a $37,087 average salary for workers who didn’t do an internship.

But here’s a shocking statistic from that same survey: 2013 graduates who did an unpaid internship while in college actually made less than students who got no internship at all – $35,721 a year, on average, compared to the aforementioned $37,087. Pretty bad deal – work for free and then make $1,366 a year less when it’s time to work for money.

There’s something wrong with that interpretation.

Let’s consider a single representative of a recent graduate. She has three options available to her, ordered from best to worst:

  1. Take a paid internship and later land a $51,930 salary
  2. Skip the internship and go straight for a full-time job with a $37,087 salary
  3. Take an unpaid internship and later take a job with a $35,721 salary

What determines which option she’ll take? Obviously, all recent graduates will want (1), but not all recent graduates will get that opportunity. Only the best will. Let’s say our graduate isn’t in that tier. She can opt for (2), but after we eliminate all those who achieved (1) we still have to choose the best of what remains to fill the limited number of full-time jobs available. That’s a second tier of candidates. Let’s say our representative doesn’t fit that category either. So, without options (1) and (2), the only thing she can do is (3).

What the author of this article wants to do is eliminate option (3), so that the only thing our candidate can do is be unemployed and hope that some time soon she’ll be able to fit into (1) or (2).

In any case, notice his wording. He’s saying that taking an unpaid internship leaves you worse off than choosing to work without that internship experience. That’s misleading, because to a lot of people who choose option (3), option (2) was never really a choice they weren’t sufficiently qualified. Option (3) leaves you better off, however, than not having a job at all!

A much more direct, if a bit more crass, way of putting my point is, those differences in incomes might represent differences in the skills different candidates have to offer. If someone takes an unpaid internship and over the long-run ends up making an average salary of $35,721, maybe it’s because they couldn’t compete against those other candidates who ended up getting jobs directly out of college or a paid internship.

So, it’s not that they’re getting bamboozled by employers. It’s that the unpaid internship was really their best choice, because (1) and (2) were really never on the table for them.

One thought on “Do Unpaid Internships Make You Worse Off?

  1. Mitchell

    Hi Jonathan,

    The author of the article also gets his statistics from a source which does not make any attempt to adjust for different degrees. Maybe the large majority of those getting paid internships graduated with engineering, economics, or other high value degrees. Maybe those with unpaid internships graduated with degrees in education, sociology or other low value degrees.

    Reply

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