Salary sacrifice: Are unpaid internships worth it?

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By Alicia Adamczyk, Daily Staff Reporter
Published January 24, 2014

Long before Engineering sophomore Christopher Reynolds crossed the Diag on his first day of class last fall, the Pennsylvania native knew he would need to save money from his high school lifeguarding job in order to pay for his college expenses. Initially, he thought he could spend his earnings on a new computer. But as it turned out, he needed the money to subsidize a different job experience.

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Reynolds, a first-generation college student, pays for his own tuition and other costs. So when he looked for an internship after his freshman year, he knew he wouldn’t be able to take anything that wasn’t paid. While he did manage to secure a paid internship with General Electric Aviation in Ohio, Reynolds said had he not successfully balanced paying his out-of-state tuition while saving up spare cash throughout the year and from the previous summer, he wouldn’t have been able to afford to take the job.

Reynolds isn’t alone. With the internship quickly becoming a staple of the collegiate experience, many students are left pondering the costs and benefits of committing to a full-time position without the standard full-time pay.

“I felt really pressured to do something in the summer, but worrying about if I could afford it,” Reynolds said. “That pressure really beat me down the first semester, and I can’t tell you how happy I was that the internship offer was paid.”

Many students, some in as tight of financial situations as Reynolds, aren’t fortunate enough to receive a paid gig. Instead, they are left to take an unpaid position to break into a career field. While many students at the University are able to afford such experiences with help from parents or savings from other jobs, others — like Reynolds — can’t rely on outside help.

Without help or savings, the internship experience can be hard to navigate.

In an article published earlier this month in The Boston Globe, Ross Perlin, the author of the 2011 book “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,” estimated that more than a million students across the United States intern each year, and about one-third to one-half of them receive no pay.

Some interns have fought back against their unpaid labor.

In June of last year, two interns working at Condé Nast publications — W Magazine and The New Yorker — filed suit against the publishing company, claiming they were paid less than $1 an hour for their work, which they said violated federal labor laws. Soon after, Condé Nast discontinued its internship program.

Since the Condé Nast incident, several other lawsuits have been filed against companies alleging that unpaid internships violate federal law, most recently including a $450,000 settlement between Elite Model Management and a former intern who brought a class-action lawsuit against the company. With the obvious drawback of receiving no pay for work, the lawsuits further complicate the validity of unpaid internships for college students.

Still, while some interns may have a legitimate case, not every unpaid internship is illegal.

The U.S. Labor Department has noted that work performed by interns in governmental agencies and nonprofits does not have to be paid. The Fair Labor Standards Act lays out six points that must be met to constitute an unpaid internship, among which include mutual agreement of no payment, and supply of an “educational environment” for interns.

The language of the law, however, is ambiguous in places, leaving legal interpretation up to employers and, increasingly, the judiciary.

With some unpaid interns taking the case to the courts and others, like Reynolds, not able to afford to work for free, it begs the question: Is the unpaid internship worth it?

Benefits of an internship

Genevieve Harclerode, assistant director of experiential learning and employer development in the University’s Career Center, said internship experience has become a normal expectation for most employers looking to hire students after graduation.

“While not every employer in every field is expecting that you’ve done four internships in a field before you embark on an entry-level job search, certainly we are seeing that employers have a baseline expectation that you should be able to articulate why you might be interested in a certain industry,” Harclerode said.

She explained that any kind of exposure to a professional setting is beneficial not only for employers to take students seriously, but for the students themselves to decide whether or not a certain field is the right fit.

Additionally, internships provide the opportunity for personal growth.

Amy Sumerton, program director of 826michigan, an Ann Arbor-based nonprofit organization that helps elementary and high school-aged students with their writing skills, wrote in an e-mail interview that the fact that the internships offered at the nonprofit are unpaid has never posed a serious issue.

Sumerton said 826michigan has had interns from all socioeconomic backgrounds, who are always enthusiastic to volunteer their time. To help facilitate those interns who are less privileged, however, she said the program offers a lot of flexibility in hours and work management.

“I think most of our interns understand that they are getting a valuable experience for their time, and doing something positive in their community,” Sumerton wrote. “They may not get a paycheck for their work, but interns typically gain a bevy of marketable skills, a better resumé and a great letter of recommendation.”

Ford School of Public Policy junior Abigail Orrick said she enjoyed her unpaid internship with the Department of Education over the summer because it allowed her to communicate directly with the high school students she hopes to one day work with.

While she applied to both paid and unpaid positions last summer, she said the Department of Education was her number one choice, despite being unpaid.

“The best thing about an internship is you’re not just studying the material out of a textbook or you’re not just listening to somebody else who’s had that experience, you’re doing it yourself,” Orrick said.

Still, had she not received a scholarship through the Public Service Internship Program, a program within the University that provides resources and support to students interested in pursuing public service-related internships in Washington, D.C. over the summer, Orrick said she wouldn’t have been able to take her dream internship.

Like others on the program, Orrick said she set a strict budget during her ten weeks in D.C., and tried to make the remaining funds of her scholarship last.

“I did coupon over the summer,” she said, laughing.

LSA senior Rachel Rowlands, who interned with Glamour Magazine over summer 2013 — before Condé Nast, the magazine’s publishing company, halted its internship program — said living and working in New York City was a great way for her to break into the publishing field, despite not receiving pay for her work.

Like Orrick, Rowlands said the hands-on experience working with editors at a real magazine was worth taking the financial hit.

“I had a great time, I met some amazing people,” Rowlands said. “You can’t really get better first-hand experience than working with editors who do that every day.”

Internship hierarchy

For many fields, including government, media, entertainment, fashion and nonprofit work, an unpaid internship is standard practice. While this doesn’t pose an issue for some students at the University, Harclerode, from the Career Center, said there are many students she works with who need to take creative approaches to financing their summers.

Others, however, completely forego taking the internship because they simply can’t afford to work for free. Harclerode said it’s a sad situation for students who really want the experience, especially as employers come to expect it.

“What’s really difficult from where I sit is anytime you see a student who needs to make that kind of decision,” Harclerode said of students who may give up an internship because of cost issues. “I know that there are numerous opportunities out there, but if this is something a student is really, really excited for and you just can’t make the two ends meet, I really empathize with that student.”

But just because a student can’t afford to take an unpaid internship, that doesn’t mean she or he won’t be successful in future job searches. Sumerton, from 826michigan, emphasized the importance of enthusiasm and a demonstrated interest in the mission of the organization as key qualities in a potential intern or employee.

“We look for applicants who are motivated and eager to learn things,” Sumerton said. “That, in my mind, is more important than just about any kind of experience.”

Harclerode too said most employers expect to see that students have a demonstrated interest in their field. While the experience isn’t limited to just internships — and could include, for example, volunteer work or participation in a student organization — she said it’s still typical for most LSA students to have internship experience in particular. Typically, employers won’t know the difference between a paid or unpaid internship when they look at a resumé.

While Harclerode thinks most employers do prefer to pay interns, it isn’t feasible for every company, especially smaller businesses and nonprofits. She noted that some companies, such as NBCUniversal, have moved to a paid internship program in recent years, perhaps in light of the lawsuits and attention now devoted to the Fair Labor Standards Act.

“I think that’s a positive trend,” she said. “Any move towards compensating college students is a good thing.”

Pressure to succeed

While many of his freshman friends were enjoying their first year at the University, Reynolds, the General Electric intern, said he felt immense pressure not only to find an internship, but to also support himself at the same time.

As someone from a blue-collar background, he said transitioning to working at GE and witnessing the lifestyle of the other interns he worked with was a difficult experience. While other interns used their first paychecks to buy new watches or televisions for their apartments, Reynolds, who cannot rely on financial support from his parents, was worrying about paying for gas to travel to and from work.

“I haven’t met too many other people in a financial situation as tight as I am, so I haven’t really been able to relate to anyone,” he said.

Orrick, too, said there was a definite divide between students from different socioeconomic classes in D.C., where most of the internship positions are unpaid. Although Orrick and many others in PSIP budgeted consciously and had help from scholarships, she said it was obvious that many other students didn’t have the same worries.

The financial constraints that some students have is something employers should take into consideration when developing their internship programs, she said. As the income gap between students in universities across the country increases, the same disparity can be seen in internships.

“I think there is a bit of an issue with it being limited to middle and upper class students doing internships because they’re the ones who can afford them,” Orrick said. “It’s cutting those students out who would bring a lot to the internship and to their employer but yet can’t financially do it.”

Rowlands, the Glamour intern, also said if she had not budgeted and obtained help from her parents, it was unlikely she would have been able to take the job.

“I can see the side where some kids can’t afford to do it,” Rowlands said. “And, it’s not their fault and it’s not fair how it has to be for them. I wish there was a way to meet in the middle, I know it would help a lot.”

A creative approach

Like others, LSA senior Laura Goslin, who interned in Congressman Dan Kildee’s (D — Mich.) office, had to think outside of the box when it came to financing her summer in D.C. In Goslin’s case, this meant graduating a year early so she could use the money she saved from paying tuition to afford to live in one of the nation’s most expensive cities and work full-time for free.

“I made a deal with my parents that they would pay for housing,” Goslin said. “I was just really fortunate. I know if I didn’t have that set up I wouldn’t be able to go.”

Orrick, the Department of Education intern, and Rowlands both said had they not received aid from their parents, and had Orrick not received a scholarship which covered her housing costs, neither would have been able to take their internships.

While the unpaid internship isn’t going away any time soon, there are many resources across campus that can help students take a creative approach to funding their ideal internship experience.

LSA Internship Coordinator Elizabeth Pariano said she has witnessed the number of internships growing over the past few years as more students and employers recognize the benefits of the experience. While this means an increase in the amount of unpaid opportunities, she said it will also translate into more paid positions in the future.

The University has also recognized the increased importance of the internship, as well as the increased financial need of its students, according to Pariano, and is taking steps to address the issue.

For those who find themselves struggling to pay for their summer experiences, Pariano said there are many resources for students to take advantage of. For example, LSA students with demonstrated financial need can apply for the LSA Internship Scholarship, which can grant up to $5,000 to subsidize internship costs. Individual departments, academic programs and other colleges also grant scholarships depending on the student’s major.

“You need to be ready to ask one place and go to another,” Pariano said. “It’s on the minds of many of the people I talk with in these departments. I don’t think a student should ever hesitate to ask or inquire about it.”

Additionally, Pariano is helping to develop the LSA Internship Network, which will connect LSA students with employers — including LSA alumni — looking for interns. The database will require employers to indicate whether the position is paid or unpaid, which is also a requirement for jobs posted on the Career Center’s website currently. Pariano said many students are able to “piece together” an appropriate amount of support through multiple channels to afford to take an internship.

Hopefully, all of these resources will help students secure not only their ideal internship, but one that is paid for those who can’t afford to do it any other way. She said the University’s goal is to engage as many students as possible in the process if they’re interested in the experience.

“We’d like to be able to support as many students as we can,” she said. “I think it’s important to give them the options and facilitate the options to open as many doors as we can.”

Pariano emphasized the importance of the individual student figuring out his or her needs and taking the appropriate steps to accomplish their own goals and ambitions. She encouraged students to seriously consider what value they will get out of an internship — paid or unpaid — before they take it.

In some cases, this may involve students creating their own opportunities or taking a path less traveled.

“That’s a good thing, that there are so many paths,” she said. “There are opportunities to take other kinds of work.”

Harclerode also stressed that there are many options for students who feel that they can’t afford unpaid internships. She suggested talking to employers about shortening the length of the internship, looking for scholarships or sponsors in the city of employment, considering less expensive cities to work in that offer similar opportunities and supplementing the internship with a paid job.

In other words, she said there’s always a way to make the internship a possibility if the student gets started thinking about his or her options early enough.

While it isn’t the ideal situation, she encouraged students in financial straights to take advantage of the resources provided on campus.

“Ultimately, I think anytime you have the opportunity to be able to gain more exposure and clarify career interests it’s a positive thing, but like I said, there’s some resources out there that would hopefully help support a student,” Harclerode said. “I do think there are some students who need to make difficult choices.”

Reynolds seconded Harclerode, saying his internship experience took a lot of planning and budgeting. Still, he said all of the effort paid off because of the experience he received.

“Even with all that planning ahead, it was still was kind of hard to get started,” he said. “In all, it really definitely is worth it.”