Why unpaid internships mean inequality of opportunity - Macleans.ca

Why unpaid internships mean inequality of opportunity

Not so good for economic growth if richer but less talented kids get the gig, says Mike Moffatt


This article appeared first on Canadian Business.
A dispute between Bell Mobility and two of its former interns has re-ignited the debate over unpaid internships.  It’s a discussion the country needs to have, from both a legal and economic point of view.  As an economist what I know about unpaid internships worries me; what I don’t know worries me doubly so.

The concerns include the exploitation of interns and firms calling work positions “internships” as a way of circumventing minimum wage laws.  The effect these positions have on inequality of opportunity cannot be overlooked.  Children from wealthier families can afford to take unpaid positions thanks to generous grants from ‘The Royal Bank of Mom and Dad’ while children from poorer families are effectively shut out.  If working as an intern is résumé enhancing, then lower income kids are disadvantaged in the labour market (even more than they already are).  This has macroeconomic effects beyond income inequality, since talented low-income people are shut out of jobs given to lower talent children from higher income families, thus slowing economic growth as jobs and candidates are mismatched.

One counter-argument to this concern is that unpaid internships are no more financially unequal than higher education (and perhaps less so).  Matthew Yglesias makes the best version of this argument I have seen in his post “Would Banning Unpaid Internships Increase Career Opportunities for Low-Income Kids?“:

My worry would be that we’ll replace zero-salary work/training positions with what amount to negative-salary training in the form of graduate school. Both the unpaid summer internship and the master’s degree in journalism are based on the idea that eight semesters worth of college leaves most people ill-qualified for a paying journalism job without some further seasoning. And while requiring people to spend months working for free does put a substantial barrier in the way of someone who can’t get financial assistance from his parents, requiring someone to spend a year or two paying many thousands of dollars to a school creates a much larger barrier.

Replacing internships with graduate school may or may not be an improvement as far as a learning experience.  The big difference, from an inequality perspective, is that educational institutions, albeit imperfectly, work to ensure equal access to low-income students through grants and loans.  This financial levelling of the playing field typically does not exist with unpaid internships.

Perhaps the most worrying aspect of unpaid internships is just how little we know.  The number of unpaid internships is a primary concern, as the potential economic damage is likely proportional to the number of positions.  Andrew Langille estimates that up to 300,000 Canadians are working in unpaid internships.  Given that there are less than 5 million Canadians between ages 20-29, that estimate seems high to me.  But the answer is we currently simply have no way of knowing the number of unpaid interns and Mr. Langille’s estimates are the best we have; I am grateful that he has estimated the extent of the practice.  Ideally, Statistics Canada should be collecting this data, broken down by age, gender and parental income of unpaid interns.

Canada needs to do much more to learn the effects unpaid internships have on the youth labour market. Collecting the necessary data is the place to start.

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Why unpaid internships mean inequality of opportunity

  1. Getting young people to work for free…..another cheapskate American idea we’ve imported.

    Why are we always putting barriers in the way while claiming we want a qualified educated workforce?

    Universal education and then pay people to work….doesn’t have to be lavish starting out….but ‘a workman is worthy of his wages.’

    • True. Unpaid internships are dumb unless you need training to be of any use to your employer, which isn’t usually the case. As a student, I would take minimum wage for a while if it lead to more promising career opportunities.

  2. Yeah, that’s a job winning entry on a resume – “unpaid intern”.

  3. Does Macleans have a policy on deleting comments that I can read? I am curious to know why my comments get deleted when I don’t use naughty language.

    Does Moffatt have such a fragile ego he needs protection from people who think it is idiotic to have a white male Western professor write about inequality issues? This article is embarrassing, or at least it should be, because Moffatt tells us what he ‘knows’ about inequality of opportunity even tho he has no stats, info or facts of any kind.

    I would also like to learn why Canadian journos are such keen censors of opinion that diverges from Liberal orthodoxy. Canadian msm has to be least diverse profession in Canada – white faces abound – why is it acceptable to our white journos to have msm and an ethnic media? We don’t have mainstream accountants, doctors and lawyers and ethnic accountants, doctors and lawyers, so I wonder why does our msm practice such segregation?

    • ” We don’t have mainstream accountants, doctors and lawyers and ethnic accountants, doctors and lawyers”

      Yeah we do. There are plenty of professionals where I live who primarily – even exclusively – service their ethnic community. And as for the MSM and ethnic media, the ethnic media often service their communities in their own language and focus on issues of greater interest to them than to society as a whole. It’s called niche marketing.

  4. Duh… have a sense of humor. It will get you very far in internships, jobs, relationships and life. That’s it.

  5. The generation that is in their early 20’s right through age 35 has been one of the most economically disadvantaged, perhaps since the great depression, in terms of employment. Employers (all too often with union cooperation) have established two tier wage structures in which the young, who need the income the most to form families, get paid less for the same work. But, the greed just grows. Why pay a little when you can pay NOTHING?

    We are pretty shortsighted. This generation will not be having the children Canada needs to carry the future burdens, and to grow our nation economically or any other way.

    The article points out that wealthier young adults can survive this, by help from their parents. But, that is no substitute for the achievement of making one’s own way in the world. It takes that pride in oneself to be ambitious and take future risks.

  6. Who are you to tell me I can not work for free to gain experience and training? Do not ever force me to do it but do not stop me if I want to! This is a discussion about freedom!

    • That’s the problem, however. Many of these professional designations require some amount of work from unpaid interns in order to achieve your credential. If you want to be a lawyer or doctor, for example you *are* forced to do it.

      • In general you are quite right, esp. in glamour positions like th arts. But the specific example of law is incorrect – yes you are forced to do a certain amount of work before you are qualified, but it is paid.

  7. I’m currently an unpaid UNHCR Intern, I’m paying my way with savings from previous professional paid work, and my contract stipulates that I’m not eligible to apply for a paid UN position for 6 months following the internship (to offset the risk of a rich-nations recruitment bias). Maybe it’ll look good on my resume (though given the job title, maybe not), but its primarily intended as a charitable donation. That said, unpaid internships with for-profit organisations are ridiculous, and should be investigated by the education and/or labour ministries.