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Economy & Business

A proposal to take the sting out of the unpaid internship

This article first appeared in the St. Louis Beacon, March 24, 2010 - It’s the time of the year when students -– and in this economy even recent graduates -– are searching for summer internships. Employers expect to see these experiences listed on college students’ resumes, and these foot-in-the-door positions can lead to full-time work.

According to a new report, the majority of internships at nonprofits and in government are unpaid. That's annoying -- but often accepted -- if you have the means to take a temporary financial hit, but it's a potential deal breaker if you don’t.

“It puts students without an internship at a disadvantage in an already horrendous job market,” Nancy K. Cauthen, director of the economic opportunity program at Demos, a nonpartisan public policy research and advocacy group, said Wednesday during a panel discussion in Washington.

The event coincided with the release of a report from her organization and the Economic Policy Institute on how to help low- and middle-income students, already saddled with loans, afford unpaid internships. The issue is particularly relevant for the throngs of young people who work for free every summer in D.C., one of the most expensive cities in the country. (The report notes that a three-month internship there can cost a student roughly $4,000, excluding travel.)

Here are the basics of this proposal:

  • Federal financial aid should help fund these public service internships for low- and middle-income students.
  • As a way of keeping administrative costs down, the funding would be distributed to colleges through the existing Federal Work-Study Program; colleges would have allocate funds to eligible students.
  • Students would receive a $3,500 grant for a three-month, full-time internship and $7,000 for six-month, full-time positions.
  • Funding would be available to 100,000 low- and middle-income students at a first-year cost of $500 million. (Eligibility is defined as familes earning up to 300 percent of the 2009 federal poverty line, or $66,150 for a family of four.) The costs would be offset, according to the report, by consolidating higher education tax credits and limiting contributions to college savings accounts.

The panel also discussed ways to help students get resume-worthy work experience without traveling to Washington or other pricey cities. One idea floated by Shirley Sagawa, a visiting fellow at the Center for American Progress, is for organizations to list in an online database their research needs so that students looking for a research topic for a class assignment ccould help the organization and get research experience without leaving campus. 
There was little talk about the likelihood of more employers simply offering stipends or modest paychecks to their summer interns.

As Kathryn Edwards, a researcher at the Economic Policy Institute and a report co-author, put it: “With the way the economy is, more and more people are willing to work for free -– even those with greater experience.” 

From an employers' perspective, the justification is often simple: Students earn academic credit for their work, which offsets tuition, so there’s no need to pay them. But that’s not always the case; colleges can decide that a work experience doesn’t translate.

Some college provide grants for unpaid summer work, but the report notes that this practice is overwhelmingly concentrated at private institutions with greater resources, and it tends to benefit higher-income students who already have had greater access to internships.

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