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Small business

Should interns be paid?

May 2, 2014
Why won't you pay me?

Why won't you pay me?

Supply and demand. That fundamental concept seems to be at the core of why there’s a rising number of interns working without pay for organisations making enough of a profit to pay them.

The theory of supply and demand is simply that the price of a good or service (in this case, young labour) will rise or fall depending on how much it’s wanted and how much of it there is to go around. On that latter point, the answer is a lot.

Over the past year, youth unemployment has jumped by a third and, since 2008, the long-term jobless rate among those aged under 24 has tripled. That’s a lot of young people – more than 250,000 according to the Australian Bureau of Statistics – without work.

With such a significant oversupply of young labour, competition among them for work is fierce. And that, of course, includes unpaid work. 

The issue of supply and demand was also emphasised in a report released last year by the University of South Australia on behalf of the Fair Work Ombudsman. The researchers concluded that “an oversupply of qualified graduates” was a contributing factor to the proliferation of unpaid internships. Armed with a degree in a dwindling industry, such as media and the arts, new graduates are taking whatever they can to get a foot in the door.

That’s why it was interesting to read an unorthodox opinion piece written by a professor in this week’s Sydney Morning Herald. His view was that university places should be limited to the top five per cent of the population, thereby making them more exclusive. At the moment, he writes, there are students obtaining even post-grad qualifications who still need to settle for an internship. 

A common argument put forward by employers is that unpaid interns are there essentially for a trial period, at the conclusion of which they’re offered paid employment should their performance meet a certain standard. 

But that’s somewhat of a hollow argument because the so-called trial is why a probationary period exists. Probation (an inherently ugly term) is an opportunity for new workers to demonstrate their suitability for a role, knowing they might be let go in six months’ time.

The other argument made by business groups is that money isn’t the only currency with which people can be paid. Surely there’s also value in being remunerated via non-monetary currencies, such as highly sought-after work experience with a popular employer. Well, that argument has a little more merit.

A few years ago, a study published in the Academy of Management journal revealed the determinants of job satisfaction among interns. Surprisingly, whether they’re paid or unpaid has little impact on their level of satisfaction. Other factors are far more influential. These include the opportunity to:

  • Work on important tasks that make a difference.
  • Receive formal and informal feedback regularly from a supervisor.
  • Connect meaningfully with colleagues throughout the organisation.
  • Learn new skills that haven’t been taught in the classroom.

The researchers found a major reason those four satisfaction drivers are rarely implemented is that interns are often given less attention than their paid colleagues because employers view them merely as temporary workers. The bosses are disinclined, therefore, to invest time and effort mentoring and training their young recruits.

So, should interns be paid or should they remain unpaid? The answer really depends on what else the employer offers in relation to meaningful work, considerable feedback, professional connections and new skills.

Whenever those four factors are lacking, interns deserve to at least receive the minimum wage. Because it’s pretty clear they're getting little else from the experience.

What do you think? Is it fair that interns work without being paid?

twitter Follow James Adonis on Twitter  @jamesadonis

27 comments so far

  • I try to take on one intern per year, I would love to take on more as it's a great opportunity to create and train a future staff member with the skills we require, not what a uni lecturer told them would be the skills req'd.

    We do pay our interns, not much, although 100% understand why this is a substantial burden on employers, we might pay a few hundred a week to employ them, but the true cost is the substantial loss of productive hours I lose managing them, sitting with them running through what they are doing, and for every hour I spend with them I gain back probably 15mins of productive work.

    If interns are producing substantially valuable work then yes they deserve to be paid, but realistically they shouldn't be, they should be there to learn, a good intern will never look back, in a few months they can learn as much as they did in the 4-6years prior at uni. If they come with the right attitude it will result in a good job and future. If a company is abusing this getting them to do tasks that teach nothing, the intern has every right to walk back out the door.

    Business's and managers are slaves to interns, not the other way round, the managers are the ones working for free when they could be making money, taking time to train them on the hope they may turn into a valuable employee.

    Commenter
    really
    Location
    Date and time
    May 05, 2014, 11:07AM
    • "Business's and managers are slaves to interns"

      If that's the case, you should get one who can check your punctuation.

      Commenter
      SKB
      Location
      Date and time
      May 05, 2014, 4:35PM
    • "... managers are the ones working for free..." are you serious? It's like saying that if somebody gets shot, it's the shooter who is in pain and bleeding. Managers need staff or they're not managers at all. You need to see to their training or your business won't function at all. You won't get staff suddenly appearing out of nowhere fully trained and not needing any instructions. Even experienced staff members need some adjustment. Interns usually just need a little more help.
      Anyway, there should be some regulation or unscrupulous employers can just keep exploiting them.

      Commenter
      Knee Jerk
      Location
      Sydney
      Date and time
      May 05, 2014, 5:50PM
    • You sir, nailed it.

      Commenter
      Archie
      Location
      China
      Date and time
      May 05, 2014, 9:19PM
    • Of course businesses shouldn't pay interns. There's no way the business could ever make additional profits from them. They must be a complete waste and should be eternally grateful to whatever is provided to them. It's great you are doing all this charity work.

      Commenter
      Born Yesterday
      Location
      Date and time
      May 05, 2014, 10:41PM
    • When you first entered employment were you paid or working for free ?. When I first started employment my employer paid me while training me for the current and future positions. It was a belief that investment in my training would ultimately benefit the business as a whole. I remained loyal for over 25 years so they really got their moneys worth.To expect the young to work for free while covering their living costs and travel costs is obscene and nothing short of greed by corporations expecting something for nothing. failure to pay a person a wage while working for you is nothing less than theft. Theft of a persons time and effort. I know of many who are not paid under the pretext of being trained who are then sacked once the free time finishes and they move on to another sucker. business these days want experienced workers immediately and expect someone else to pay for the training of young employees, the greed rather than future vision never ceases to amaze me.

      Commenter
      Shane in QLD
      Location
      Date and time
      May 06, 2014, 5:59AM
    • Plenty of passion there,

      Can any one put a figure how much an intern is worth. The value of the product or service they deliver ?
      The value of the product of service they may, or may not deliver in future ? (keeping in mind when they start delivering they will want to get paid for it then as well and quite possibly fro an entirely different business)

      Not everything has a dollar value, look at what you intend to gain out of the internship and at what cost it is costing the business. Say an intern is doing $600 worth of work a week somewhere around minimum wage doing less than exciting tasks that yes someone would have to be paid to do.
      Then say a managers time is worth $300/hour, if they are spending an hour a day sitting with an intern training them, or checking their work, that intern is getting great value for money, because fair chance their not doing $1500 worth of work.

      I hope none of these interns that feel they're slaves ever intend to set up a business one day, then they will understand what it is to work for free on the hope you might gain something at the end.

      Commenter
      Really
      Location
      Date and time
      May 06, 2014, 11:37AM
    • And yes Shane started out for free, wasn't ideal, but no regrets at all. I did a deal with one of my lecturers to work where I could for his business in return for access to their computers etc, which very quickly made studying so much easier. Then washed dishes at night and went home to work for the family in my holidays.

      Not for a day would I see my lecturer or his business as a greedy corporation using me, I forever grateful for what they taught me, I regularly call him to update him on where I've been doing since and still to ask for advice on certain matters.

      Commenter
      Really
      Location
      Date and time
      May 06, 2014, 12:11PM
  • The most important argument here is about equity - many people simply can't afford to work for free! If unpaid internships become a common pathway into certain occupations, then many will be excluded from that pathway because they simply can't afford it! Thus no 'fair go' is provided.

    As for being paid in a currency other than money, will the local supermarket accept payment in anything other than money? The landlord?

    Commenter
    David
    Location
    Surry Hills
    Date and time
    May 05, 2014, 12:02PM
  • Brings a "new" meaning to slave labour.

    Commenter
    Andrew of Mt. Eliza
    Location
    Date and time
    May 05, 2014, 12:58PM

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