Small Business


Should interns be paid?

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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?

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