Unpaid internships

[bigbadwolf]

An Irish blogger explaining the realities of unpaid internships here. I think he's describing the Irish scene but it probably holds with equal force in the US of A.

 

[IlyaKEightSix]

May be true in a great deal of cases. Here's a guy who was an unpaid intern at the same firm I was before I got my MS degree:

http://www.linkedin.com/pub/jon-pistis/13/281/545

He's doing really well for himself. But the COO and founder is one of the most happy-go-lucky-good-nature-straight-up-swell guys I've ever met.

So this may very well hold true.

However...if people see an unpaid internship as a guaranteed 3-month interview...

It's just that you better be getting training and good work experience and accomplishing crap rather than filling out databases.

 

[Tsotne]

The attitude of the author towards such practices is correct I think when he says:

You are working, in a job, and are entitled to and deserve AT LEAST the minimum wage.

The rationale behind the minimum age is that every work done for an employer must be rewarded at least by the minimum compensation recognized as the level above which you are not discriminated. But the reality repaints the picture from the side of the employee himself/herself when he/she is willing to work for nothing just in order to gain experience.

 

[Anthony DeAngelis]

This guy is crying sour grapes. I interned for free for a number of months and it lead to a FT offer. Regardless of the offer, the internship made my resume relevant, gave me tangible experience and I made friends in the industry and got solid references.

With an attitude like this guy has he can be assured that his salary will be zero. I will never understand someone complaining about not getting minimum wage when a sizable salary is your potential reward. Even at 75%, more finance salaries are still higher than others.

 

[ValueSeeker]

Agree 100% with Anthony on all levels. Unpaid internships demonstrate increasing aptitude and passion for the industry and commitment for developing a career. An unpaid legal internship involving investment management and financial analysis skills is certainly more valuable than earning minimum wage at a lower end job that is not directly related to your desired career. This article could not have been anymore wrong.

 

[didje]

Agree 100% with Anthony on all levels. Unpaid internships demonstrate increasing aptitude and passion for the industry and commitment for developing a career.

All kind of internship does. Not only unpaid internship. I don't think that you mention in your resume "did an unpaid internship at XXX" to show your commitment/passion. Plus, even though you work less or on smaller projects during your internship, it is still a work you should be paid for.

 

[ValueSeeker]

I don't think that you mention in your resume "did an unpaid internship at XXX" to show your commitment/passion. Plus, even though you work less or on smaller projects during your internship, it is still a work you should be paid for.

I think you have misjudged what I recently posted. You need to understand that an unpaid internship is an investment which at times (and I know for a fact) is better to do than take a paid internship. I know of people who have done unpaid internships and worked on serious tactical asset allocation models (and have amazing networks) whereas a few people I know did paid internships with projects that were worthless. Just because you can choose to get cash now with a paid internship, it is not always the best investment. To understand this, you need to understand basic DCF modeling.

 

[Tsotne]

Anthony you are absolutely right, that's trivial. You don't need to be paid while being in an intern since you can make a big step forward in future. But this is from the employee's point, as for employers, they could better play fairly while offering minimum wage even just for the sake of rational formality.

 

[Ohad]

This guy is crying sour grapes. I interned for free for a number of months and it lead to a FT offer. Regardless of the offer, the internship made my resume relevant, gave me tangible experience and I made friends in the industry and got solid references.

With an attitude like this guy has he can be assured that his salary will be zero. I will never understand someone complaining about not getting minimum wage when a sizable salary is your potential reward. Even at 75%, more finance salaries are still higher than others.

Although I basically agree with you I don't see why companies shouldn't pay at least minimum wage (or more) for interns, it's not like that wage will be any sort of liability for them but it will make the intern feel more appreciated and he will be more productive since he won't have to worry running out of money while working for free.

 

[Anthony DeAngelis]

Ok, as someone who has done 3 unpaid finance internships, let me clear things up.

1) Big firms don't have unpaid internships. Technically, they are in violation of employment/labor laws.
2) The firms that are willing to have unpaid intern don't usually have a structured program and don't really NEED an intern. They typically are cool with it as long as it costs them minimally.
3) Unpaid internships are your opportunity to prove yourself. Complaining because you aren't making $7 bucks an hour is myopic. If I ran a small shop I would be cool with someone hungry looking to learn. I absolutely would not hire someone if I HAD to pay them. This isn't manual labor. This is a chance to get a high paying job, meet people in the business, get your foot in. People PAY for this chance, forget getting paid for it.

Let's be blunt. If you are a rock star, you will get a formal internship with GS, MS, Blackstone, whatever. They have a full HR department and pay all their interns. Some people don't get those opportunities. I didn't.

You also need to remember that unpaid internships also tend to be more flexible. I did my internships during the school year. This wasn't a FT summer internship.

The LAST thing we need is to be forcing people to pay for interns. It will absolutely kill off the small shop internship and kill any chance people have at breaking in. And for what? $7.00 an hour? Foolish.

Anyone complaining about minimum wage to get a job in investment banking has zero business in this line of work. Next thing you know they will be crying because they don't get overtime. It's like crying because you got a cut while in the Marines.

 

[Anthony DeAngelis]

This is not directed at anyone in particular, just in general. I have read a bunch of articles recently and the general theme is that companies should be fined and forced to pay. I wouldn't have a FT offer if this had been the case. As a grown man, a free citizen and an educated individual, I resent being told I cannot work for free if I want. Once again, I have two parents, last thing I need is uncle sam watching out for me.

Focus on the people who really need help. Not college students working for free. God, I worked FT throughout my entire education and kids are complaining because they have to work 10-20 hours a week in air conditioning without pay. So much for boot straps and hard work.

 

[Anthony DeAngelis]

Although I basically agree with you I don't see why companies shouldn't pay at least minimum wage (or more) for interns, it's not like that wage will be any sort of liability for them but it will make the intern feel more appreciated and he will be more productive since he won't have to worry running out of money while working for free.

I feel you, but what will happen is a lot of firms just won't do unpaid internships. These unpaid internships suck for poor kids, but that is kinda how life is right. I mean rich families have connections, have money to do whatever, etc. Poor kids need to hustle, the need gumption, etc. That is how low income (class) kids broke in. Just like entrepreneurs need to hustle.

Sucks, but you take that option away and the only way people can get relevant internships is if they make it into formal programs. Those are even more biased against poor kids since they recruit from top schools and with top GPA's.

I graduated with a 3.3 GPA. I worked 40+ hours a week and commuted 2 hours round trip during my UG. That hurt me more than an unpaid internship would have.

 

[IlyaKEightSix]

Ok, as someone who has done 3 unpaid finance internships, let me clear things up.

1) Big firms don't have unpaid internships. Technically, they are in violation of employment/labor laws.
2) The firms that are willing to have unpaid intern don't usually have a structured program and don't really NEED an intern. They typically are cool with it as long as it costs them minimally.
3) Unpaid internships are your opportunity to prove yourself. Complaining because you aren't making $7 bucks an hour is myopic. If I ran a small shop I would be cool with someone hungry looking to learn. I absolutely would not hire someone if I HAD to pay them. This isn't manual labor. This is a chance to get a high paying job, meet people in the business, get your foot in. People PAY for this chance, forget getting paid for it.

Let's be blunt. If you are a rock star, you will get a formal internship with GS, MS, Blackstone, whatever. They have a full HR department and pay all their interns. Some people don't get those opportunities. I didn't.

You also need to remember that unpaid internships also tend to be more flexible. I did my internships during the school year. This wasn't a FT summer internship.

The LAST thing we need is to be forcing people to pay for interns. It will absolutely kill off the small shop internship and kill any chance people have at breaking in. And for what? $7.00 an hour? Foolish.

Anyone complaining about minimum wage to get a job in investment banking has zero business in this line of work. Next thing you know they will be crying because they don't get overtime. It's like crying because you got a cut while in the Marines.

See, my issue is this:

Not everyone has two loving parents. In my case, my father is a freaking jackass who's trying to make life as miserable for my mom as possible to get out of child support arrears he piled up over ten years. He's an absolute sack of crap, gave me trash genetics, and has no redeeming qualities whatsoever, and in fact, my life would be better if he simply disappeared.

It's as George Carlin said when debunking the ten commandments:

"Respect thy mother and father--respect--another word for control. Respect shouldn't be given, it should be earned based on parents' performance. Parents' performance! Some parents deserve that respect, most of them don't. Period."

See, this is what I don't understand--you have entrepreneurs worth millions of dollars, with millions of dollars in operating capital, and they can't even cover room and board for someone so they can work for them? In a place like NYC or Chicago, a full month's work at minimum wage might cover one month's rent. Might.

Are you honestly saying that interns don't add more value than $7.15 an hour?

 

[Ohad]

I feel you, but what will happen is a lot of firms just won't do unpaid internships. These unpaid internships suck for poor kids, but that is kinda how life is right. I mean rich families have connections, have money to do whatever, etc. Poor kids need to hustle, the need gumption, etc. That is how low income (class) kids broke in. Just like entrepreneurs need to hustle.

Sucks, but you take that option away and the only way people can get relevant internships is if they make it into formal programs. Those are even more biased against poor kids since they recruit from top schools and with top GPA's.

I graduated with a 3.3 GPA. I worked 40+ hours a week and commuted 2 hours round trip during my UG. That hurt me more than an unpaid internship would have.

That's my point, if the internship was paying something maybe you wouldn't need to work 40+ hours in something completely unrelated to your field. Don't get me wrong, I would love to do something similar to what you mentioned in your previous post.

Doing an internship leisurely while maintain my current job until I get enough experience to do the switch is perfect for me but I can see how shitty it can be for UG and I don't see how paying what....7$*10-20 hours * 4 weeks ~ 600$ per month , if your company can't afford to pay 600$ a month for an extra hand (even though its an inefficient hand) than you should close it now.

 

[DominiConnor]

I find myself hostile to unpaid internships, and I believe his experience is quite reasonably focused on finance. I know of interns who got paid more than their fathers who had 'real' jobs.

The media industries of course are worst. Some firms would literally cease to function if unpaid interns weren't there, and the chances of getting a job after is small. One of my godchildren is up for an internship in NY to do photography in a big name firm, the rough equivalent of (say) DE Shaw Apparently they expect him to live and work in NY for a year for nothing, and this is quite standard. My family can stump up for that now, if that had been me at 25 they'd have just laughed and asked if I also needed a Jet Fighter for my school project, it would have been that absurd.
Unpaid internships are thus a barrier to social mobility and mean that rich dumb kids get better opportunities than poor smart ones. That's bad for the economy, even before one chooses an ethical position.

There's also a 'respect' term.
The most honest respect anyone can give you is to pay for your work. Free labour will be squandered, basic economics tells us that "free" resources are rarely used efficiently.

As a headhunter with a high profile I see part of my job as advising people not to make the same dumb mistakes i've made over the years, and although in some biological measures I was smarter at 23 than now at 49.8, I could outsmart that kid wholesale.

Anthony made a good choice, not everyone does, I turned down a paid job at DE Shaw because they seemed like some tinpot little outfit, they kept bugging me for a while than gave up. This was not my best decision (or my worst). Imagine having to do multiple unpaid internships, most young people and/or parents would run out of cash forcing them to take some shit job.

Anthony (probably correctly) sees himself as big enough to take care of himself, good, and I entirely agree that when a relationship is vaguely amongst free adults the state has little useful role except for dishonesty and coercion.

Although Anthony may be correct that the job he got was that way, but I have to ask whether this is the case of changing which person got hired, not whether someone got hired. The difference is important.

As the plague of unpaid internships spreads, more firms will see free labour for doing grunt work, and it may become the norm, going back to media for a moment the trend there is to pay for internships. Yes you read that right, if people are prepared to work for free for the carrot of a possibility of a good job it follows that some will actually pay (or their parents will).

If it becomes the norm, jobs will increasingly be allocated on the basis of parental wealth.

Anthony talks of the marines, but they are paid, and boot camp recruits are paid more than officers are in some other armies.

The UK used to choose its officers on the basis of parental wealth as recently as the 1960s.
Britain used to have an empire bigger than the next two or three put together.
It doesn't any more.

For various (not very good) reasons I find that these days I am speaking to the media quite often about why we as an industry aren't quite as evil as they think. One shining point is that compared to most lines of work it is a meritocracy. Not completely of course, but better than most.

So should you be allowed to work for free ?
That's a genuinely hard question, my first response is "yes, but no one should be allowed to hire you".

 

[Baller]

Who cares how much you think your work is worth. If it really is worth $x then you should be able to find someone who will pay you $x, but that fact is- someone else is willing to do the same work for free -> your work is not worth $x.

 

[atreides]

Everyone's situation is different. People have their reasons for doing these unpaid internships. It could be to break-in , connections, etc.

 

[atreides]

The media industries of course are worst. Some firms would literally cease to function if unpaid interns weren't there, and the chances of getting a job after is small. One of my godchildren is up for an internship in NY to do photography in a big name firm, the rough equivalent of (say) DE Shaw Apparently they expect him to live and work in NY for a year for nothing, and this is quite standard. My family can stump up for that now, if that had been me at 25 they'd have just laughed and asked if I also needed a Jet Fighter for my school project, it would have been that absurd.
Unpaid internships are thus a barrier to social mobility and mean that rich dumb kids get better opportunities than poor smart ones. That's bad for the economy, even before one chooses an ethical position.

Living in NY for a entire year would probably cost you at least $20k in living+feeding expenses. Should this even be legal??

 

[Ohad]

Who cares how much you think your work is worth. If it really is worth $x then you should be able to find someone who will pay you $x, but that fact is- someone else is willing to do the same work for free -> your work is not worth $x.

Incorrect, following this line than all companies will follow the same line and reduce pay, basically a cartel ...illegal for obvious reasons.

 

[Baller]

I disagree Ohad.
No they wouldn't - for the same reasons that doesn't happen with any firm hiring people. Presumably, the people getting paid are the better candidates. If every firm starts paying nothing (like you argue), then one firm will decide to pay and will receive better workers and hence have a better company and a competitive edge over others.
I don't see how you conclude that every firm will follow the "same line"- what line? that they will pay people how much their worth - your absolutely right - that is the way our world runs..(for the most part)
If you ask me, this is simply the free market at its best.