Debate: Internship Reform Only Hurts Students

(June 21) -- Have you heard about the college student who took an unpaid internship at a children's film company hoping to learn the ropes of animation, only to get assigned to wiping down door handles each day to prevent the spread of swine flu?

Horror stories abound about students being exploited by employers to do menial, noneducational work for free in the guise of an "internship." That's why the Obama administration's plan to regulate unpaid internships more heavily seemed like a great idea. On the surface, at least.

But the consequences of the crackdown haven't been well thought out and will most hurt those whom the tighter regulations were intended to protect.

In April, the Labor Department issued new guidelines for determining when employers could use interns without paying them. The criteria, based on the 1938 Fair Labor Standards Act, prohibit for-profit businesses from substituting interns for paid workers or offering internships with no training or educational value. The guidelines note that unpaid internships "where a college ... provides educational credit" are "more likely" to be in compliance.

Those who break the law face fines from the Labor Department, which is stepping up its enforcement efforts. Many state governments, which have their own labor laws, plan to follow suit.

Proponents lauded the more stringent regulation, saying it would force more employers to pay interns and level the playing field for those who could afford to work unpaid internships and those who couldn't.

But that's not what's happening.

In the face of these actions, many employers simply aren't offering internships. Or they're requiring interns to receive college credit, which creates an additional financial burden for students who have to pay summer school tuition fees for internship credits on top of working for free.

"Now, it's not enough that students are willing to work without pay -- we're expected to pay to work," said American University journalism student Alyssa Wolice. "I've turned down three internships in particular that I would have loved to accept solely because they required credit."

This is a case where increased government oversight does more harm than good. The internship market already regulates itself. Businesses that pay interns, or at least provide an enriching pre-professional experience, attract better students.

"Internship sponsors get what they pay for," said Jim Case, director of the Center for Research on Employment and the Workforce at California State University, Fullerton.

Such internships serve as a pipeline for new employees, saving companies recruiting and training costs. A 2009 survey by the National Association of Colleges and Employers found that employers extended job offers to 68 percent of their interns, of which 84 percent accepted jobs. Former interns who were hired also had a much higher retention rate than employees who didn't participate in the internship program.

Conversely, companies whose internships don't provide any value will pay a price in the long run, developing bad reputations among prospective interns and consumers, who will avoid those businesses.

"Students talk honestly and openly when they come back from a work experience and even put their comments on Facebook," said Richard White, career services director at Rutgers University in New Brunswick, N.J. "The system protects itself by exposing employers who bring interns in, don't pay them and use them for the wrong reasons."

Fortunately, most unpaid internships are good experiences, he said. Students gain access to a work environment, observe their future profession up close, get much-needed experience and make valuable contacts. If students don't like what they're doing, they can leave and do something else.

Unpaid internships certainly aren't ideal. But the Obama administration's crackdown won't make it any better.

Mark Grabowski is a lawyer and Adelphi University professor. He's also creator of CubReporters.org, a journalism career website that lists jobs and internships.

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