Keshav Ramesh | It's time to end unpaid internships

The Biden-Harris administration recently committed to paying White House interns for the first time in history, beginning in Fall 2022. This is a fantastic new policy that merits a closer look into whether unpaid internships are worth students’ time, especially at schools like Penn, where internship culture is woven into its signature blend of preprofessionalism and a liberal arts education.

Many unpaid internships are valuable learning opportunities, with companies often choosing to market them as a way to earn “experience” in preparation for future careers. Experience is by no means insignificant, but it’s worth considering that young adults are surrounded by a cost of living crisis that has been further exacerbated by the United States’ ongoing inflation surge. Interns should be compensated for their work, especially as experience in the short-term won’t pay for rent and bills, groceries, and travel to work.

Unpaid internships also reinforce socioeconomic inequality for low-income students, who may not be able to afford housing and transportation costs required for participation in these opportunities. Rising College sophomore Sabirah Mahmud echoed this sentiment, stating that, “This causes really prestigious internships to be closed off for certain socioeconomic brackets.”

Mahmud, who is planning on studying international relations, has taken an ongoing unpaid internship to explore opportunities in refugee resettlement and migrant empowerment. Many students studying international relations intern through institutions like the United Nations or NGOs, the former of which infamously refuses to pay its interns. “Even many college graduates have to move across the country to work for the UN, and they don’t get paid,” she said. “Students who don’t have the financial security to pay or have their parents pay for housing or food creates financial barriers.” It then begs the question, why should the ability to help make a positive difference be limited to a select group of people?

For an organization committed to protecting human rights, the hypocrisy of the UN comes to light when one considers that its use of unpaid labor violates Article 23 of its own Universal Declaration of Human Rights, which maintains that, “Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.” If organizations refuse to pay for work, then are those unpaid internships really worth students’ time?

In addition to the creation of unfair barriers for low-income students, it’s worth asking whether companies with vast financial resources that offer unpaid internships are considering the ethics behind refusing to pay students. While uncertainties around funding and fundraising can often justify the existence of unpaid internships across legislatures, electoral campaigns, and other political organizations across the country, this justification doesn’t always apply to other industries.

“In politics, there isn’t as much disposable funding available to provide for interns,” said a rising College sophomore who preferred to remain anonymous and is completing an unpaid internship for an elected official this summer. “As someone studying political science, I knew what I was getting myself into, but there is a lot of money involved in sectors like finance and consulting, so unpaid internships for those fields specifically serve far less of a purpose than they do in politics. Those companies actually have the means to provide for their interns, whereas in politics, it’s not as much.”

This line of reasoning makes sense, given that congressional offices, state governments, and bureaucratic agencies, among others, won’t always bring in enough money. It’s disappointing that not everyone who engages in public service is compensated well (if at all) for their work, but given the White House’s recent commitment to pay its interns, change in the rest of the federal and state governments could be in the near future. However, private sector industries should be treated differently in the here and now. One provision of the Fair Labor Standards Act (FLSA) maintains that any company recording at least $500,000 in revenue annually or engaging in interstate commerce must pay all employees. Since 1947, however, employers have exploited a loophole created by Walling v. Portland Terminal Co., a Supreme Court case holding that workers hired to learn new skills from other employees and apply them toward actual work were classified as “trainees” who do not enjoy rights afforded by the FLSA.

This court decision created a federally sanctioned litmus test for classifying internships as unpaid based on factors such as whether the internship fits in with the student’s academic calendar, or whether the intern’s work merely adds to another paid employee’s responsibilities without replacing that employee. Called the “primary beneficiary test,” this process is described as “flexible” and dependent on “the unique circumstances of each case.” It creates an uncontrolled gray area for companies to decide, with little to no oversight, whether an internship should be paid, further fueling the exploitative nature of unpaid internships in particular.

Unpaid internships are part of a broken, decades-long system that has reinforced socioeconomic inequality while allowing financially capable companies to take advantage of countless high school, undergraduate, and graduate students across all income levels. It’s time to work toward an end to unpaid internships, so that students can be compensated for the time and effort they contribute to their employers.

KESHAV RAMESH is a Wharton and College sophomore studying finance, statistics, and international studies in the Huntsman Program from South Windsor, CT. His email address is keshmesh@wharton.upenn.edu.