Unpaid Internships for Graduates Now the New Norm?

Many college students spend summers interning at various places, hoping to gain some hands-on experience, a few recommendations and some sense of what they would like to do after graduation. However, the unpaid internship is now creeping into life after graduation.
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Internships have long been a part of building a career trajectory and most students have resigned themselves to the fact that internships will be unpaid. Many college students spend summers interning at various places, hoping to gain some hands-on experience, a few recommendations and some sense of what they would like to do after graduation. However, the unpaid internship is now creeping into life after graduation.

In May of last year the New York Times reported:

No one keeps statistics on the number of college graduates taking unpaid internships, but there is widespread agreement that the number has significantly increased, not least because the jobless rate for college graduates age 24 and under has risen to 9.4 percent, the highest level since the government began keeping records in 1985.

The unemployment rate for college graduates ages 20-24 this August was 10.8 percent. For those with a Bachelor's degree, the number was 10.6 percent while those with a Master's degree faced a 17.2 percent unemployment rate, according to data from the Bureau of Labor Statistics.

"You can look as much as you want while in grad school but the competition was tough," says Maura Donovan, 26, who graduated with a Master's in International Affairs from Columbia University in 2012. After searching for a paid opportunity and "applying like crazy," Donovan moved back in with her parents during the summer after graduation to work a summer job and save money.

Donovan, who was looking for work in conflict resolution and development with a focus on the Middle East, needed to get field experience abroad and realized that she wouldn't be able to do so unless she took on an unpaid internship. Continued networking landed her an internship with Search for Common Ground (SFCG), a non-profit based in DC focused on increasing cross-cultural understanding. Donovan was based in SFCG's Tunisia office for six months. "The amount of responsibility that I was given because I went abroad was amazing -- I was running things as an intern," she said. Her experience abroad added to her portfolio and made her a more viable candidate for jobs in the U.S. But it didn't lead to a full-time opportunity.

Donovan moved back to DC and began a collage of jobs, internships and consultancies. She continued working with Search for Common Ground as an intern and a consultant, and got other jobs as a swim coach and sales associate at Loft, all while keeping the job hunt active. There was a time when she was working two jobs in one day and pulling shifts on weekends to ensure that she had enough income to meet her expenses. "There was a good month in there when I thought I wasn't going to make it," she said. It took Donovan two months of juggling before she landed a full-time position with Chemonics International, where she is currently working in the contracts department.

Donovan's story is not unusual, especially for the up-and-comers in DC. An article in the Washingtonian that looks at the cycle of graduates going from one internship to another points out that "Washington's job pyramid, at least in many industries, often doesn't start at entry-level; it starts at internship."

Experts agree that the unpaid serial internships do not classify every young person's job prospects. "It's clearly a minority who are in that position," said Ross Eisenbrey, vice president of the Economic Policy Institute, a non-partisan think tank based in Washington, DC. "It's not like it characterizes the young person's employment market. But unemployment is very high and when it's a choice of being unemployed or doing something that you think might advance your career, there's a lot of pressure."

Suzanna Anderson, who asked not to use her real name, felt similarly during her job search. A 2011 graduate of the University of Delaware with a double major in history and political science, Anderson, 24, began a one-year service project in Detroit with the Jesuit Volunteer Corps after graduating. She spent a year as a volunteer at the United Community Housing Coalition, helping clients with landlord/tenant legal issues.

Upon completion of her year in Detroit, she returned to Delaware to begin a job hunt within the legal field, to continue preparing herself for law school. "I didn't understand that people in their late 30's and early 40's were also applying for [the positions I was applying for] and had the years to back it up," Anderson said.

Anderson spent another year looking for a job. "In the end, companies want the years and they want the experience," she added. "It was really hard telling lawyers and hiring managers to please take a chance on me," she said. During her job search, she found work as a temp and volunteered in various organizations in Delaware, from a nursing home to a historical museum. In that year, she supported herself using her savings and with help from her parents.

Anderson says that she's glad that she kept the search going instead of taking a sales position or something similar, "[which] wouldn't add anything to my resume." She landed a job as a research associate at a law firm in Philadelphia last month.

"It's not unusual for young people to have higher unemployment rates than the general population," notes Catherine Ruetschlin, a policy analyst at Demos, a public policy organization based in New York. "What is unusual," she added, "is how long the job market is taking to recover."

Ruetschlin added that the high unemployment that young people are experiencing right now is cyclical; however, that combined with the length of the recession has impacted the nature of jobs available. "The nature of the employment relationship has changed." She noted that a generation ago, firms expected to hire young people and provide them full-time jobs with training, and the focus was on long-term investment in the employee. That has now shifted to part-time, temporary work, which includes internships.

Eisenbrey agrees. "Businesses know that they are in a new position of power and their own expectations have changed. I think it's a fact that a lot of these businesses expect to hire people and not have to pay them."

Recent lawsuits against large corporations are putting employers on alert. After interns came out victorious against Fox Searchlight Pictures for their work in the production of Black Swan, complaints against Condé Nast, Warner Music and Gawker Media were brought. And they are only a few in the growing number of complaints against employers. ProPublica is maintaining a database that currently lists 15 cases in progress, including the three mentioned. There is also a Fair Pay Campaign urging the White House to pay its interns and Sheryl Sandberg's Lean In Foundation has now implemented a paid internship program after being criticized for soliciting an unpaid intern.

The Department of Labor's regulations are one reason why Alex Hochman, assistant director of career services at University of San Francisco, says that unpaid internships after graduation are becoming less and less available. "I've been the internship coordinator for eight years now, and it's something I saw far more of back in 2005-2007." It is here where lack of data becomes an issue. There isn't anyone keeping statistics on graduates, and even colleges don't have numbers that identify if their graduates are interning.

Hochman concedes that there are certain fields in which it is still tough to get paid positions. He notes journalism as one, and adds that nursing graduates at USF have now come to expect that they'll have to move at least 50 miles to get a paid position.

Hochman's otherwise optimistic outlook may have something to do with the fact that the Bay Area is faring much better than the nation economically. In July 2013, the most recent data available for local areas, the nation's unemployment rate stood at 7.7 percent; California's was 9.3 percent, while the San Francisco metropolitan area had a 5.7 percent unemployment rate. That is compared to a 7.7 percent unemployment rate of the neighboring Oakland metropolitan area.

Barry Thompson, executive director of career services for undergraduates at Tulane University in Louisiana, expressed a cautious optimism. "What we're seeing this year is that participation by employers is growing," he said, referring to attendance at career fairs and on-campus interviews. "That's not to say that it's not difficult," he added. "It has been a greater challenge, and certainly there are college graduates that are leaving and aren't getting the jobs they want."

It's not the short-term consequences or individual satisfaction that worries Ruetschlin, but the long-term impact of today's job market. "Young people now are just barely getting by or getting into debt, which is going to have a lifetime impact," she said. Ruetschlin noted the phenomenon of labor market scarring -- the fact that young people are starting at lower wages or at unemployment so even if the market improved dramatically, the earnings and employability of the young people affected by the recession will decrease over their lifetime and have a long-term impact.

Furthermore, though everyone agrees that even without pay, an internship can provide valuable experience and networking opportunities, it is not a luxury in which every young person can indulge. "[Internships have] significant benefits," noted Ruetschlin, "but they are distributed disproportionately to people who are already at a benefit in the labor market."

That is no more apparent than for graduates who cannot afford to take unpaid internships due to student loan debt, or simply because they need to support themselves financially. If taking an unpaid internship is not an option, these populations fall farther from their goal of building substantial work experience in their 20s to be able to advance in their careers later on.

Eisenbrey noted that hiring people with the expectation of not paying them was not the norm 20-30 years ago but that it is becoming one. "If we get to the point where we think that college graduates and people with skills and experience can be hired without being paid, then people with less education, fewer skills and less experience will be in worse situations," he added. That would have repercussions across all levels of the economy collectively, not just for individuals taking on unpaid work.

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