In Defense of Unpaid Internships
On the morning after a World Series win, writing a column for the Boston Globe on anything but the Red Sox seems like an exercise in futility, but nonetheless, I decided to defend unpaid internships. Threatened by lawsuits for minimum wage violations, Conde Nast closed its program last week.
There has been a disturbing tendency to demonize employers who offer popular internship programs, just as there is a tendency to demonize companies, such as Wal-Mart, that employ the less skilled. Given the thirteen percent unemployment rate for 20-24 year olds, we shouldn’t be shutting down opportunities for the young.
The enemies of unpaid internships argue that they unfairly bypass minimum wage laws and that they benefit only rich kids, who can afford to go without wages. As long as internships really do provide training, as the Department of Labor requires, then higher wages in the future will compensate for lower wages today. My column also suggests that some of the benefits of these internships could become more widespread if we allow student loan programs to also aid recent graduates who are working in unpaid internships that are certified as being skill-enhancing. I’m wary of expanding any Federal program, but if that’s the price of keeping learning opportunities alive, it seems worth paying.
The larger problem is that the Great Recession could create a lost generation, with too many recent graduates becoming couch potatoes rather than productive, well-paid workers. Every unemployed person represents a failure of entrepreneurial imagination. We only ensure that those failures multiply if we insist on demonizing the employers of lower-skilled, less well paid, younger workers.
In the months ahead, I’m going to return to Economics 21, specifically focusing on policy changes that have a chance of reducing America’s under-employment problem. But a good place to start is to recognize that skills are produced on the job—more than in schools—and that eliminating unpaid internships is a step backwards, not forwards.