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The Ethical Dilemma of Unpaid Internships

Unpaid internships are a contentious topic that ignite fiery debates among students, parents, educators, and employers alike. Some argue that they're a rite of passage, a necessary step towards gaining valuable work experience.

Indeed, a Chegg Internship study shows that 80% of all Big Four accounting firms hire employees with internship experience. This trend also extends to tech companies like Google, Apple and Facebook.

Internships in and of themselves are not wrong or useless. They are extremely important in the lives of young professionals and present opportunities for growth in skills and knowledge.

However, the topic of unpaid internships is what presents a moral problem, and what this article will generally focus on.

Unpaid internships can often mislead and exploit young talent, carry legal and ethical implications, and harm both interns and businesses.

Moreover, they perpetuate racial and economic disparities, because only higher-class students can afford to work without pay. In fact, unpaid internships may come with costs the intern is forced to cover, including application fees, travel costs, and expensive accommodation.

Unpaid internships deepen the generational wealth gap and obstruct the path of equal opportunity for aspiring professionals from marginalised communities.

In this blog post, we're going to dive deeply into the world of unpaid internships and explore the various aspects of this ethical dilemma. We'll examine why unpaid internships are problematic, explore their negative impacts on businesses, and present a more optimistic alternative.

Unpaid Internships can be misleading

At first glance, unpaid internships may appear to be a golden ticket for students and recent graduates to gain hands-on experience and put theory into practice. However, reality often falls far short of these expectations. They can be extremely misleading.

Firstly, unpaid internships promise valuable experience but offer little in return. Interns may find themselves relegated to performing menial tasks like fetching coffee, filing paperwork, or making photocopies, all of which do little to advance their professional development.

Second, the promise of a future job or the elusive foot-in-the-door often turns out to be nothing more than empty words.

Paid internships are 32% more likely to lead to a full-time position than unpaid internships. Further, graduating students in 2021 with paid internships received an average of 1.12 job offers while those with unpaid internships received 0.85 offers. Those with no internships at all only received an average of 0.64 job offers.

Third, unpaid internships impose a financial burden on students and recent graduates. If you are from a lower-income background, it is near impossible to take on an unpaid internship while trying to keep afloat.

With higher living costs, it seems only wealthier students are able to pull this off. Thus, workplaces are less diverse and equitable. In 2021, 3 out of 4 unpaid interns were white.

Unpaid Internships - A bad Business Practice?

Unpaid internships, at their core, may exploit young talent without fair compensation. While organisations benefit from the free or low-cost labour, it raises questions about the ethics and legality of such practices.

In Australia, unpaid internships are legal according to the government’s Fair Work Ombudsman. The Fair Work Act 2009, however, specified the guidelines of what constitutes a legitimate unpaid internship, which excludes performing “productive” tasks and the role benefitting the employer more than the intern. Further, the intern must receive meaningful learning experiences, training, or the development of skills.

We already commented upon the fact that many unpaid interns are relegated to menial tasks despite what the position advertised. All of this, then, puts companies on legal shaky ground.

Moreover, studies have shown that unpaid internships have a detrimental impact on intern morale and overall productivity. One study showed that unpaid interns generally feel exploited and undervalued, while another study detailed how financial hardships caused by unpaid internships directly caused mental-stress and a decrease in mental well-being.

Unpaid internships can also tarnish the reputation of organisations that rely on them. While public perception is everything these days, being known for exploiting young talent is not the kind of image most organisations want to cultivate.

A more optimistic solution

With all this dismal information on the state of unpaid internship, what might be a better solution?

You all guessed it: Getting paid.

When interns are compensated fairly for their work, they are more motivated, productive, and engaged. 

A big recent trend that organisations have embraced is the concept of micro-internships, paid internships that last a few months. These internships are generally financially achievable for a company's budget and greatly benefit the intern.

The length of an internship is something to seriously consider. If an unpaid internship lasts longer than a few months, that’s a reg flag. In the same vein, paid internships should typically last between 10-12 weeks, although some extend up to 16 weeks.

Of course, the length of an internship is determined by the nature of the work and what requirements a company holds. Micro-internships, for instance, are generally known to strike a good balance between the length, quality, and potential an internship can provide.

One such company that successfully implemented this concept is Smith+Nephew, a multinational medical equipment manufacturing company. Alison Keefe, the company’s global director for emerging talent, partnered with Parker Dewey and tried something different than traditional recruitment methods. She embraced micro-internships as a way to tap into more diverse and previously overlooked young talent.

Explaining the process, she states that “the value in Micro-Internships is that they really support both candidates and employers.”

Many success stories exist of companies that have made this transition. They've found that investing in their interns leads to a more motivated and loyal workforce.

The return on investment, both in terms of the quality of work produced and the company's reputation, is substantial.

Encouraging Change and Taking Action

Despite the many success stories that already exist of organisations making the transition from unpaid to paid internships, more change needs to happen.

Organisations looking to shift from unpaid to paid internships must first recognise the ethical and practical advantages of making this change. It may require adjustments to budgets and policies, but in the long run, it's a sound investment.

Further, you out there, reading this blog, can also take action by supporting organisations that prioritise fair compensation for interns. Indeed, by doing thorough research, individuals can drive change from within and outside the system.

Government regulations and labour laws also play a crucial role in addressing unpaid internships. There is currently a global push to change policy and illegalise unpaid work, and Gen Z is leading the way.

Finally, interns themselves can evaluate potential internships to ensure they are fair and valuable. This might involve asking about compensation, seeking out testimonials from past interns, or researching the organisation's reputation for fair treatment.

Final Thoughts

Unpaid internships is a complex issue that affects both young talent and businesses. The misleading nature of these positions, the negative impact on intern well-being, and the legal and ethical questions they raise make a compelling case for change.

By advocating for change and encouraging the shift toward paid internships, individuals, organisations and politicians alike can secure the true value of internships and the benefits they hold.

Internships are not bad, but just like other jobs, they need to be fair and ethical.

It's time to make unpaid internships a relic of the past and pave the way for a more equitable and prosperous future for all.

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