Ethics of Unpaid Internships

When is a voluntary transaction between consenting adults not permitted? Well, there are a few cases, but one interesting one is where one of the consenting adults is an unpaid intern at a for-profit company.

Now, the usual presumption is that people only consent to something if they see it as being in their interests, broadly construed, to do so. So why does the law frown on these voluntary unpaid internships?

For a bit of context, see this story (from last week) by Steven Greenhouse, from the New York Times:

Growth of Unpaid Internships May Be Illegal, Officials Say

With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.

Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers….

So the central ethical issue is this: how can the law prevent me from accepting an unpaid internship if I see it as being in my interest to do so?

Well, there are two potential reasons. One is that the law is effectively preventing companies from taking advantage of people with few other options. If you really need to get your foot in the door of your chosen industry, you might be willing to undergo significant hardship — including unpaid labour — in order to do that. And a company preying on that desperation might be seen as exploitative. But then, “exploitation” is a lot easier to say than it is to explain. Someone who is being paid in opportunities and connections, rather than in cash, is still being paid.

The other potential reason is that we have minimum wage laws — which generally preclude a wage of “zero” — not to protect the person whose wage is at issue, but in order to protect others from having the price of labour driven downward. That is, the law forbidding me from working for $2/hr (in Canada or the U.S., for example) isn’t merely to protect me. That law is really there to protect you — it’s to make sure that I don’t accept (for whatever reasons) such a brutally low wage, and thereby bring about the expectation that you, too, should work for that little.

Still, it’s interesting to note that non-profit organizations are (mostly) exempt from such laws. You’re allowed to donate your time to them. But what’s the difference, really? As Henry Hansmann points out in The Ownership of Enterprise, the essential difference between for-profit firms and charities lies in the separation of buyer and beneficiary that typifies charitable organizations. When a customer gives money to a store, he or she receives some benefit in return; but when he or she gives money to a charity, it is so that someone else can receive some benefit. It’s not clear how that difference justifies a categorical difference in labour standards.

14 comments so far

  1. Sally on

    I think this article has missed the point. When internships are unpaid, for full-time work, the only people who are able to participate are those who have enough wealth to support themselves while they complete an internship (sometimes many months). Thus, the opportunities and connections which are gained from an unpaid internship are only available to a certain section of society and this is a problem.

  2. Chris MacDonald on

    Sally:

    Thanks for your comment, but I didn’t miss that point…I just said it differently. The effect you’re talking about is discussed explicitly in the NYT story, and it is a specific example of the more general principle I discuss above, which is that free labour depresses the price of labour to a point where not everyone can “afford” to take the job.

    Chris.

  3. Rob Farrow on

    This issue doesn’t just concern the private and voluntary sectors: in academia, postdoctoral positions are increasingly offered on a non-stipendary basis. I agree with Sally in that the major moral issue here is the way in which those with sufficient capital can continue to take advantage of such opportunities (thereby reaping rewards later). It’s effectively a barrier to entering particular labour markets that undermines parity of opportunity.

  4. Francesca Rheannon on

    I was so glad to see Greenhouse’s article and now your post on this issue. I think this is part of a larger trend of employers getting something for nothing or, at best, very little: not just unpaid interns, but media outlets getting content from professional writers and journalists for free or practically free (15 cents a word, down from $1 – $2 a word just a few years ago); universities hiring adjunct professors (very low pay, no benefits, no job security) instead of full-time tenure track profs — adjuncts filled 48% of high ed teaching positions in 2006 and the trend is relentlessly upward — not to speak of the ongoing outsourcing of skilled jobs to lower wage countries. All this, while executive pay continues to soar.

    I personally have experienced most of these tricks: I left teaching on the university level because, as a hardworking adjunct prof, I found myself slaving for something south of minimum wage; as a journalist, I’ve seen the erosion of freelance remuneration. As a radio host (Writers Voice with Francesca Rheannon and Sea Change Radio), I find that stations are happy to take my content — as long as it’s free.

    This hurts not only individuals, but society, as well, by discouraging people from exercising their skills, from learning news skills, and by continually lowering the bar of what is acceptable employment practice.

  5. Chris MacDonald on

    Francesca:

    Of course, it’s hard to blame companies for wanting things cheap, or free. We all prefer things cheap or free, don’t we? And if someone is willing to give us stuff for free, we generally take it.

    That’s not to deny the problematic outcomes that you point to. It’s just not clear to me that any particular company is out of line to want to keep costs down.

    Chris.

  6. Rob Farrow on

    Chris –

    Isn’t the point that there is something wrong with companies who value short-term profits over the longer term sustainability of their business model?

    Much seems to hang on the reference to ‘willingness’ in your last post. Just because someone is ‘willing’ to do something, it does not follow that the action is justified. (This is the reason why you cannot consent to rape, for example.) Conversely, I may be willing but unable to take an unpaid internship because I cannot support myself independently. I can will something when I shouldn’t: what moral value does such consent have, in your opinion? My view is that you need (possibly many) more conditions before you can say that consent implies justified consent.

    Furthermore, there’s an issue about transparency here. People may be willing to take on an internship because they see it as a necessary step to their goals. But from an employer’s point of view, they might just be looking for a quick fix to a labour shortfall over two years.

    The culture of unpaid/lower paid work that has grown up over recent years is linked to an ideology which devalues every skill except management. As Francesca notes, the changes that are happening seem to benefit this group most.

    Incidentally, people don’t always prefer things cheap or free. I don’t want to wear cheaper shoes if I know that they have been produced through child labour under dubious conditions. Indeed, one way of defining ethical consumption is in terms of valuing considerations other than the financial bottom line. Companies should take a more progressive attitude.

  7. Chris MacDonald on

    Rob:

    Thanks for your comment.

    Sustainability is a fine thing, but I doubt it captures the issue, here. A repeated pattern of unpaid internships might be entirely sustainable. In some industries, it’s gone on for decades. That’s an empirical question. But it could be sustainable and still wrong.

    You’re right of course about the limits of consent. It only amounts to a weak prima facie justification. But it’s a good starting point, I think, precisely because it defaults to respecting people’s choices. But mostly I remind people of the consent part of this to explain why this issue is a bit more complicated than it might look on the surface.

    As for free stuff: again, I agree. But I want to defuse the idea that companies are doing something wrong just by wanting to keep costs down. The wrongness is in the mechanism, not in the desire.

    Chris.

  8. Kai Tabacek on

    I wish to comment on the culture of unpaid internships in for-profit organisations:

    I have been trying to build a career as a journalist in the UK for almost 2 years. Among people in my position there is a universal expectation that we will have to work for free – often for very long periods – in order to gain employment.

    Of course, we do this because we expect to be paid in “opportunities and connections” as you suggest. There is nothing wrong with this, as long as the employer recognises the terms of the exchange. Unfortunately it is very common for employees to use interns as free labour and not to pay them back in terms of training, relevant opportunities or counsel after the internship has ended.

    There is also a real tendency for the length of the internship to be kept deliberately vague, to keep the intern hanging on in the hope of future opportunities. If internships are a form of money-free exchange then they should be treated in the same spirit as a monetary exchange. This means being unambiguous about the benefits both parties can expect to receieve, and the time period.

  9. Svetlana on

    Hello Chris,

    Thank you for interesting blog and I was really amazed by the content.
    Actually I would like to ask you for advise about my situation, which is a paid internship.
    Here is a link to my story
    http://pazukha.blogspot.com/2010/05/ethical-issues-internship.html
    Please tell me what I can do in this situation and how can I protect myself and stay ethical.
    Thnk you!
    Svetlana

  10. kellyeam99 on

    I am reading with interest this article in reference to unpaid internships and internships in general. I am doing a minor thesis in this area. All of these comments relate back to 2010. In my study I notice that all the major publications that write on the subject of CSR do not specifically refer to internships. Labour law or employment rights, terms and conditions, child labour and forced labour are all there and more. However, it could be argued that an intern is cheap or free labour and this is such a world wide growth area so my question is why is it not covered in these academic journals?
    Thanks for any comments in advance.
    Mary Kelly

    • Chris MacDonald on

      You might want to look under “ethics,” not “CSR.” Many people conflate the 2 topics, and for many purposes they consider similar issues. But myself, for example, I take the “S” in “CSR” seriously. “S” is for “Social”, and it’s not clear whether this is a *social* issue (as opposed to a plain question of ethical obligations to the interns themselves).

      • kellyeam99 on

        Dear Chris,

        Thank you for your reply. Yes I agree there is a lack of clarity in this area. Internships are quite broad but here in Ireland there is an intern programme entitled JobBridge which is on a statutory footing and clearly identifies that there is no contract between the intern and the ‘Host Organisation’ (employer). It was set up in 2011 as a short term solution to assist primarily graduates gain experience in their field or speciality and the unemployed. JobBridge has since expanded into all areas of employment, both private and public sectors.
        The scheme certainly helps companies ‘to keep costs down’ as it is financed by the state/taxpayer.

        Mary


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