3 Reasons Unpaid Interns are Bad for the Economy
By Nathan Parcells
SAN FRANCISCO (TheStreet) -- The power of a great internship can go a long way. From providing employment opportunities to beefing up resumes, internships can be the key young professionals need to stand out from the crowd. Can they also contribute to the economy?
A recent NBC News article asked the question. While many paid interns clearly contribute to the success of an organization, the case is different for unpaid interns, who aren't seen as contributors because organizations dole them out menial tasks. In fact, with lawsuit after lawsuit over unpaid interns popping up, the significance and need for internship programs has been questioned.
The main problem, besides the fact students and recent grads aren't getting paid for their work, is that they can hinder the growth of an organization.
Here are some reasons unpaid internships can be damaging:
No competitive compensation
When interns aren't paid, they lose the chance to be financially independent. Currently, 65% of students rely on financial help from their parents during their internship. Sixty percent of the 20 million Americans who attend college each year already borrow money to help cover the cost, and studies show debt is increasing for four-year graduates.
When pay is not competitive -- or when there is no pay -- interns are less likely to stay fresh and ambitious. Marketplace value also diminishes the second they enter the job market since they can't negotiate better compensation. This is not only bad for the economy, it hampers healthy competition for them as future professionals.
Instead: Try to pay your interns at least federal minimum wage. Other forms of compensation can include stipends, professional development opportunities and skills training.