Now that it is the new year, it is high time to start thinking about summer interns. That means that if you are a startup founder, you are probably making plans to hire one or a few interns to help out on various busywork. And if you are the typical startup, you will “hire” those interns and pay them nothing. No wage, no benefits, no stipend, no paid lunch or commuter costs. Nothing.
I generally do not like beating a topic to death, as I have written about the exploitation of interns before. However, an article I read in The Wall Street Journal simply enraged me this morning. Let me be as clear as I can on this subject, unpaid internships are wrong and border on evil. At best you could call it a mild case of exploitation. At worst, it is another form of slavery, in this case corporate slavery.
You might think I am being sensationalistic using the term slavery. We live in a free society where people have the freedom to work in any field and any part of the country. No one is forced to take unpaid internships and they are free to go when they want. And there are certainly no systemic beatings, mental abuses, or other violence visited upon interns.
The problem is that we have setup an implicit class system. Those that can afford to work for free readily accept unpaid internships that advance their future career because they have the financial backing to pursue such opportunities. Those that cannot work for free (and most likely accruing significant college loan debt) take whatever job pays. As the number of high quality and relevant paid internships is few, the result is they work in jobs that do little to advance their prospects. It is a two-tier system that locks people into tracks not of their own making and chipping away at our meritocracy.
Even worse is the fact that we are creating an implicit expectation that working for free is okay and an acceptable business practice. We couch this in talking about the valuable “experience” gained and that this is some “rite of passage”. Interns should feel “privileged” for the opportunity to work for these great companies for nothing. The undercurrent however is that we are essentially devaluing people, their talent, and their work. We are devaluing individuals over institutions.
You might say that I am exaggerating things. Well, let’s look at the rise in household incomes over the past few decades:
Did I say rise? Well, not so much of a rise over the past decade. And it is important to note that is the median number. In actuality, income for the top 1% of earners has skyrocketed. While that has occurred, companies have been raking it in:
As you can see, corporations are not doing too shabby in the growth department. Are employees enjoying the fruits of that corporate largess? Not so much. And not only are companies rolling in the dough, they have a massive hoard of cash overseas to the tune of $1.6 trillion that’s not coming home anytime soon. What we have here folks is a sickness of corporate greed and a breakdown of leadership.
So how does that relate to the topic of internships? Simple, companies are fully capable of paying for interns. They have done little to help boost salaries of actual employees and now want to set up a system where they can get free labor and further boost productivity. This cycle has to stop now before we eviscerate our middle class and the consumer economy.
While I believe that systematic changes are required to reverse this trend and get companies to once again invest in their workforces, there are things we can all do now. The first step is paying interns for their work by giving them a living stipend. You may need to think outside the box to identify ways that interns can earn money if your cash reserves are tight. If you cannot afford even a nominal stipend, then maybe you are not ready to take on interns. There needs to be an expectation set within startups that interns are valued members of the team and are worthy of getting paid. Your mantra as a startup founder should be to encourage this culture of valuing employees and culture over pure lust for money. If more and more startups took on the mantra to “Pay Your Interns”, then maybe we can start to move the needle on the types of reforms that are needed to keep our labor market healthy.