Prohibiting unpaid internships is an effective way to withhold economic opportunity from young and ambitious men and women, particularly those from modest backgrounds.

That, of course, is not the stated goal of those who seek to require that all interns collect a paycheck. Nor is it their goal to further concentrate opportunities in the hands of the powerful and connected. But for better or worse, these would be the likely consequences of such a policy.

Our economy has a credential fetish. Virtually all white-collar jobs require a bachelor’s degree – and increasingly, master’s degrees – even when such credentials have at most tangential relevance to a job. In economists’ jargon, much of the economic value of post-secondary education is about “signaling,” or conveying information that can otherwise be hard to attain. And the signaling value of higher education is a major reason that Americans now have around $1 trillion dollars in outstanding student loans.

Internships are also a form of signaling. Successfully completing an internship signals to future employers that you can show up for work, follow instructions and get along with your colleagues – the “soft skills” of the workplace. And unlike college, you don’t leave an internship potentially tens of thousands of dollars in debt.

Critics of unpaid internships usually argue that interns are just free labor for the organizations that sponsor them, but this ignores that most interns are actually quite costly to their sponsoring organizations. No matter how bright and well educated an intern may be, supervising him or her takes time and effort, and by nature of their lack of experience and their short-term stints, interns typically cannot produce much of value. Mentorship, instruction and education are all expensive investments relative to the value most interns provide.

It’s also hard to tell whether an internship primarily benefits the intern or the employing organization. This is a decision best made by interns and their sponsoring organizations, not by Department of Labor bureaucrats. If an intern feels her experience will add to her employability later on, who are we to prohibit her from taking an unpaid internship?

Eliminating unpaid internships won’t cause employers to just start paying their interns. Some no doubt will, but many more internships will likely be lost altogether. Those that remain will become still more competitive and more likely to go to the sons and daughters of the wealthy and connected. That is, internships will become more and not less elitist.

Shut out of the internship marketplace, many potential interns will simply take on more debt to get more and better credentials to make them look attractive to future employers. And in a credentialed society, what choice do they have?

At a minimum, internships should be treated the same across the board – that means that internships with for-profit firms, non-profits and government should be treated equally with respect to pay requirements. Currently, different pay rules apply to for-profit and non-profit interns. But if we are ostensibly trying to protect interns, surely the same rules should apply to all internships, regardless of the internship sponsor.

If we ban all unpaid internships, we must also prohibit volunteering on political campaigns as well, since this is the usual means of beginning a career in political staffing and could even be considered an unrecorded campaign donation.

Internships are an important rung on the ladder of opportunity for many, and we should be looking for more options to create economic opportunity. Shutting the door on unpaid internships would have many unintended consequences that would further restrict opportunity, not further social justice.

Featured Publications