Unpaid Internships: Yes or No?

Eddie Braverman's picture
Rank: The Pro | 21,215

Today I want to discuss a growing trend in the industry (and across all industries) and get your take on it. I'm talking about unpaid internships. These internships are being sold to college students and even lateraling professionals as a way to build experience and a resume talking point. But it strikes me as something akin to slavery, or at least sharecropping.

Apparently I'm not the only one who views it that way. Former Wall Street training manager Eric Glatt is suing Hollywood on behalf of unpaid interns everywhere. He learned the realities of unpaid internships the hard way when he left the street to become a film editor. Now he believes unpaid internships are so damaging to the economy that they're actually a root cause of the continued economic malaise.

People who defend unpaid internships are defending a notion of what they think unpaid internships should be, rather than what they are. A picture of how they have corrupted the labor market for film and television production, the field I was in, should clarify how damaging this practice has become. It is also holding back the emergence of a more vibrant and sustainable labor market that contributes to the much delayed economic recovery.

I came face to face with this reality when I was working on my last startup. I was unwilling to hire a French developer because of ridiculous French labor laws, and the startup accelerator I was joining wouldn't take me without one. So they proposed an unpaid internship to me.

I knew whomever came to work was going to be coding his ass off, so I asked if I needed to offer equity in exchange. The answer was, "No, but you should probably buy them lunch once in awhile." There's not a lot in this world that I find morally objectionable, but slave labor is one of those things.

So I'm wondering how you guys feel about it. I know it's being pitched to you as a great experience builder, and I know that I've even advocated working for free on this site from time to time. Perhaps now is a good time to clarify what I meant. I didn't mean for free for free, I meant no salary. As in, just get paid based on your production, which was the norm back when I started.

But maybe I'm wrong, and maybe unpaid internships are great for both employers and prospective employees. I don't think so, but maybe.

Have any of you done unpaid internships and had them lead to something better? Or was it just the slave labor that it looks like on the surface? Is there an intellectually honest and morally defensible argument in favor of unpaid internships on the part of huge corporations?

Mod Note (Andy): Best of Eddie, this was originally posted on 9/19/13. To see all of our top content from the past, click here.

Comments (196)

Sep 19, 2013

In my experience, huge corporations do not do unpaid internships. I'm sure this is not a hard and fast rule, but HR does not allow it at any of the larger businesses that I've dealt with. It does frequently occur, however, in smaller businesses in which you are given the opportunity to work for meaningful experience on your resume and if you do well, access to your boss's network for future jobs. I've often seen this is industries like AM or marketing where the company wants to get a sense of your "passion for the industry" as well as test your ability before making an actual financial investment.

Sep 19, 2013

I had an unpaid internship in a bank for 4 month, i was scannig and archiving papers nonstop, gained 0 experience, but once went to IB department to talk with people and spent 2 hours looking how they work and what they do, that was the most interesting part out of 4 month. Still, i've got a job right after university and that internship played a huge role, people who didn't had any were not able to land a job at a bank.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

Sep 19, 2013

I worked a paid internship in Spain, however, the monthly stipend, which came out to mid-500 euros after taxes didn't go very far. Considering I worked 60-80hrs a week, i was making no more than about 2euros an hour...

my issue with the concept is that its supposed to help you land that coveted job afterwards because of the experience gained, but that is often not the case. As an example, why would an investment bank now want to hire me because I spent 3-6 months doing the work nobody else wanted to do? Many times you don't get alot of the useful experience anyway, so in the end all you have is a name on your resume. I'd be 100% willing to come in and work as an analyst (exactly like the paid guys) for a few months because I know in the end they will hire me or I can take those skills elsewhere. Moral of the story: Unpaid internships should be all about learning and the experience, rather than using you as free labor to get menial tasks done. If you want to make me do that shit, pay me

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Sep 19, 2013

I think it comes down to the discretion of the intern. You have to seriously consider whether an unpaid internship makes you a more competitive candidate or not. In my case, last summer I interned for only a few hundred/week stipend (not too bad) in NYC and subsequently had to commute from Hartford CT each day. It sucked donkey dick, but in the end helped me get my current position.

I think that in today's environment, many people are urged to "intern" for experience, without any consideration as to what the experience is. You end up screwing yourself over by working for something of no marketable value to you. There is also the stigma (at least in finance I believe), that if you work for an unpaid internship, it can be construed as your inability to obtain a paid internship.

Regardless, I think it comes down to a case by case basis. Ironic note though, the stipend I received was tax free and come April of following year, I owed a shit ton back-taxes. Still a little bitter with those fuckers, as I also had to pay for their corporate taxes on the stipend.

Sep 19, 2013
Anihilist:

There is also the stigma (at least in finance I believe), that if you work for an unpaid internship, it can be construed as your inability to obtain a paid internship.

I wondered about this as well. But then you don't have to disclose the unpaid nature of the internship on your resume. Of course you have to cop to it if they ask, and it'll come up on a background check. So yeah, just what are you signalling to employers with an unpaid internship?

May 21, 2016
Anihilist:

I think it comes down to the discretion of the intern. You have to seriously consider whether an unpaid internship makes you a more competitive candidate or not.

Exactly what I was going to say. I had two unpaid internships in college, one at a non-profit the other in the Federal government. Both were great ways to explore some interests I had and subsequently led me away from those fields into a paid F500 internship the summer before Senior year where I went fulltime with. Did it suck not getting paid? Yes, but I made damn sure my responsibilities were worthwhile and I had my resume straight. It also helped me craft my story in recruiting being able to say I tried out both those industries (directly related to my major) and found my calling in my current role.

Sep 19, 2013

^ what he said. It's easy to forget that at the end of the day, the good companies WILL pay their interns: everyone from the BBs to the Blackstones to the M/B/Bs to the Fidelitys to the F500s.

Sep 19, 2013

The bottom-line test is: "If the company would have hired a worker if the intern hadn't been present, then the intern is considered an employee" (which the employer is required to meet minimum wage laws).

Quite a few unpaid internships are completely illegal. an unpaid internship must meet ALL of the following criteria:

from the following link: http://www.dol.gov/whd/regs/compliance/whdfs71.htm

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

What this means: If your internship consists of getting coffee and making copies then it MUST be paid.

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Sep 19, 2013
smpat04:

The bottom-line test is: "If the company would have hired a worker if the intern hadn't been present, then the intern is considered an employee" (which the employer is required to meet minimum wage laws).

Could not agree more with this statement.

I also think another important distinction to make is the differences between a shadowing experience and an actual internship. A shadowing experience is when you learn more about a business by experiencing an industry in the office. An internship is when you're expected to add value to the business.

A few years back I took a month-long "unpaid internship" in Brazil knowing fully well that it was a shadowing experience. I knew and my boss knew that I was not going to add any value to the company, but it was a chance for me to see what working at an asset management firm was like. Sure I had to file papers, do coffee runs, etc. but that initial shadowing experience solidified my interest in working in finance and to this day I appreciate that opportunity.

As far as calling unpaid internships a form of slavery, that is a little excessive. Nobody is forcing you to take the position. Yes, an unpaid internship is illegal if it fails the bottom-line test above, but I am all for someone accepting an unpaid internship to learn more about that industry.

In the end if you are taking an unpaid finance internship during your last two years of college, you better quickly realize that firms do not expect you to add value.

I guess we'll leave the debut about whether minimum wage laws help or hurt the economy for another time.

Sep 19, 2013

I did an unpaid PWM internship for a BB during a semester and did not learn a damn thing. I only did administrative shit such as filing, making copies, and basic data entry. No meaningful knowledge was gained. That being said, the name brand did help me get an interview for my summer analyst gig, which eventually led to my full time gig.

Sep 19, 2013

I don't think unpaid internships are as much of a problem in finance as they are in other industries. As others have pointed out, an unpaid internship in finance is often a negative signal on your resume as it implies you couldn't get a paid role.

However, for other industries such as fashion / publications, the best internships are unpaid. My ex-girlfriend interned for a year at an haute couture brand (think Dior, Chanel, etc) working full-time three days a week. And sure some of the stuff she was doing was menial, but a lot of it was critical to their everyday operations. She worked in PR and on a regular basis she was in communication with editors and responsible for sending samples to magazines for photoshoots. The fact that she was working almost 30 hours a week, while in school, and not getting paid is criminal.

What is absolutely hilarious about her situation is that once she graduated, and they could no longer not pay her, they offered her a temporary job doing exactly what she did as an intern paying her $20 an hour. While she isn't sore about it, I think her case is definitely grounds for a lawsuit.

Sep 19, 2013

I recommended my younger brother do an unpaid internship while in high school. He worked in REPE. It was a small shop and he gained modeling experience. I would say if it's a last resort, do it once. Otherwise you are just selling yourself short. Past two summers he hasn't worked (then again the kid is still 19).

It's not even an 'entitlement' thing. Almost like saying, What makes the employer feel that they are entitled to free labor? Once you build some skills/have some experience I feel your sophomore/junior year summers you should be paid.

While I might be biased, since every internship I had was paid (F500), if you have consecutive unpaid internships and are not under financial support, and don't get a decent job out of college ... then I honestly feel bad for you.

tl;dr - maybe one unpaid internship is ok if it's a boutique. Otherwise you are being taken advantage of. Truth hurts.

Sep 19, 2013

I think the effect of the unpaid internship (at least in the eyes of Mr. Glatt) is significantly overstated. Being able to accept to an unpaid internship is not a sacrifice as it is portrayed to be in the media, but rather a privelage in my opinion. At least in my experience, the only people who were willing to take an unpaid internship were the people who had significant funding sources elsewhere (i.e. parents who would pay for rent, school, everything). For people without this, it is simply not an option imo.

Sep 19, 2013

In my country unpaid internships hardly exist. Some companies don't pay a lot (say, 350 euros a month after taxes) but the average is closer to 500 and the best internships pay about 1000 a month after taxes. Still, considering that you have to work 80 hours a week at the best internships, you make shitty money per hour obviously.

Sep 19, 2013

I'm familiar with an experience where a firm was really vehement that the intern was to receive school credit. I assume this protects the firm legally. His transportation costs were also covered, which isn't bad for someone commuting from Long Island.

The downside was that this guy had to pay the school for the credits he received. Now that's bullsh!t.

Sep 19, 2013
mb666:

I'm familiar with an experience where a firm was really vehement that the intern was to receive school credit. I assume this protects the firm legally. His transportation costs were also covered, which isn't bad for someone commuting from Long Island.

The downside was that this guy had to pay the school for the credits he received. Now that's bullsh!t.

Happened to a friend of mine too. Worked for ten weeks and ended up with 1/4 of a class worth of credit.

Sep 19, 2013

What about paying the firm to work there and learn modelling?

I hope this is better than the last batch of shit you gave me. Produced more wood than Ron Jeremy. I don't want you to yell, "Reco!" anymore. Know what you should yell? "Timber!" Yeah, Mr. Fuckin' wood.

Sep 19, 2013
TheodoreBonkers:

What about paying the firm to work there and learn modelling?

This is probably the next step. Corporate America's wet dream.

Sep 19, 2013

Unpaid internships are discriminatory in some ways. The employer is basically assuming the candidate has access to

1) student loans

or

2) daddy's wallet

What if the person in question comes from a poor family? Do they tend bar at night so McCafe is still an option come morning?

Sep 19, 2013

I've recently had a change of heart on this issue. I used to believe that the willingness to work for free indicated some sort of passion for the field or position. Essentially, the ability for one to forego short term profit for future income. However, the other side of the argument is that the employer/company must provide consideration for that income loss. I would venture to say that most companies placement rates after unpaid internships are not measurably better than paid ones. For the unpaid system to work, it would have to be significantly better at placing interns after the stint is over.

Part of the issue is our lingering American value of working our way from the bottom of the company to the top. While there is massive evidence to the contrary, I would venture to say there is a subtle honor in accomplishing this. Compounded with an urban legend of one or two interns doing extremely well after the unpaid internship this perpetuates a skewed view of the results. There is a movie about this exact subject in Hollywood called "Swimming with Sharks"

If given the opportunity, I would never allow unpaid internships. If the janitor gets paid, why shouldn't someone getting your coffee get paid?

PE is the new black.

Sep 19, 2013

It never felt right to me. First of all, the only reason I'd be doing it would be to circumvent French labor laws, which isn't exactly a noble motivation. Add to that the burden of monetizing someone's work (and I mean directly monetizing their work - a coder would have been the architect of my product) and then not paying them anything. In fact, because French labor laws are so ridiculous, it would have been illegal for me to pay them anything.

Maybe I'm going soft in my old age, but I just think you get better results from collaborative efforts. Imagine being the unpaid intern who built Instagram and didn't get dick for it while these other asshats walked away with a billion. How good does it look on the old resume now?

Sep 19, 2013

I got my first internship by literally proposing to undercut any competition and do it for free. This allowed the firm to look past my total lack of credentials, and it's unlikely I would have found a paid internship. Hey, who doesn't like free stuff? So, from this perspective, I don't want people making laws that rule out the possibility of people like me creating an opportunity for themselves.

Taking a one size fits all approach is misguided. There are numerous scenarios:

1. Small companies that can't really afford to pay salaries, benefits, etc... People should understand that if they're working at such a firm, they are trading in security for opportunity. Them's the rules. Arguably the worst hiring decision a partner of mine ever made was to bring on some snot nosed brats who after a few weeks on the job decided to demande full benefits....while we're not even turning a profit yet. Out you go.

2. People like myself who are jailbreaking their way into a career that isn't rolling out the red carpet. Don't destroy this option, you'll destroy the real off the wall cases that formal recruiting can't supply companies with. I didn't go from Havuhd -> GS TMT, but hey, didn't y'all watch "In Pursuit of Happyness"? The day that the [barely] trained chimps in HR take over all hiring is the day that corporate America's days become numbered. Workplace diversity isn't limited to skin color.

3. High value learning experience. If you have a GS ops internship and a free IBD internship....you'd better take the free internship. If you're there more than a summer, yeah, they're taking advantage of you. But after you do a few months, guess what: you can now leverage that into OCR FO recruiting next year. SUCK IT UP AND DO IT.

4. Companies blatantly taking advantage of people by denying full time hiring. My second internship did this to me and I dropped them like a hot potato and trashed their reputation when I landed a FT job. Come to think of it, I should probably take them off my resume. Scumbags. Look, grow up, America is the land of opportunity. It's also the land of skinflint jerkoffs who take advantage of others while selling some virtuous public image.

*** Al Capone, Andrew Jackson, DOW Chemical, the Koch brothers, million dollar nonprofit CEOs, Mitt fucking Romney, Don [the scumbag] King. ***

There. I threw out some inflamatory stuff to get your attention. Stop drinking the fucking Koolade, these people are scum and if they're gaming the system to avoid paying what's due, throw the damn book at them. If you're one of those people who argues for the high and mighty not having to play by the same rules as the rest of us, everyone hates you and I hate you, and I hope you die a horrifying death in a fire. Just kidding. Sort of.

5. Short programs. Some NGO's used to recruit first years at my college for three week winter internships. Pay was minimal at best, and most people didn't get paid. But they got to see if they liked the work, and it looked fantastic on a resume. Look, if you can't get paid for three weeks of your life, in your late teens, you need to reevaluate your value system.

*****

There's probably a lot more scenarios, but this post is too long and I think I made the point.

Sep 19, 2013

They are fairly common outside of the finance world... but typically will offer school credit for the students as an alternative. I think they are fine, and offer the opportunity for a lot of smaller places to have interns without having to actually afford it.

Sep 19, 2013

My unpaid internship going into senior year was great. I learned a lot of Excel, Access, and modelling things. Then again it was part-time and I had a full time paying job to actually pay my bills for the summer. It was really important to have that experience since I talked about it in my interview for my current job.

Sep 19, 2013

I wouldn't equate unpaid internships to slavery, servitude, or any other kind of morally objectionable variety of work. Admittedly, I have next to no knowledge of what actually goes on in the film industry, and have committed zero time trying to figure it out.

Based on my personal experiences, I think they're a great idea for some people, and probably not a great idea for others.

I come from a state school with next to no presence on the street. After working some nothing "internship" following my freshman year at said school, I started applying for unpaid internships at local PWM shops in the area to work part-time during my sophomore year. I'm supposed to be helping pay and paying the parents back for school, so when they heard I had taken an unpaid internship they basically cut off all of my funding.

Just now I realized this is a long story that nobody wants to read so I'll cut to the chase--coming from someone who spent a decent amount of time working an unpaid internship, it was absolutely worth it and helpful for me. Gave me a leg up over pretty much everyone at my school (having already had two internships before sophomore summer) and I was able to leverage to a boutique for that summer, BB for next summer, and then BB full time.

I didn't even get into the actual morality of the topic but I think the key is that you're volunteering to commit your time for some benefit. You can always quit, and should be actively seeking a paid lateral or upward move while working the unpaid internship.

Sep 19, 2013

BBC made an interesting documentary about this. It is on Youtube.

Basically, only people with wealthy families are able to do unpaid internships in expensive cities like London or NY.

Sep 19, 2013

It is always good to get paid while you are interning. However, smaller firms tend to pay less or do not pay at all for their interns. I've undergone internship that I got 1000/mo working 60 hours a week. I think it really depends on your expectation and paradigm. If the work is not interesting/rewarding, then you need a compensation to keep you moving. If not, then you might get discouraged. I think it really depends on how you like the job and whether this internship is helping you to achieve your career goal.

Sep 19, 2013

I had a crappy resume and was unable to get any sort of internship in banking. A family friend who ran a small boutique took me on as an unpaid intern. I worked about 70 hours a week and had to commute an hour each way. I doubt i met all the standards smpat04 outlined. Though i did not displace another potential worker, my boss certainly derived an immediate benefit from my work (at the end of the internship he actually ended up writing me a check even though it was understood it was an unpaid internship). I never would have got any of the interviews i did (nor my job for that matter) if it weren't for the internship. I got a lot of meaningful experience that i was able to bulk up my resume with. My compensation was experience, but more importantly a reference and a resume, and it was definitely worth it. It would be a shame if they took away opportunities like these from students. While i'm certain a lot of unpaid interns would end up getting paid, a lot would end up not having the opportunity for an internship.

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Sep 19, 2013

My unpaid internship was instrumental to my career success so far. Before I took the internship I made sure that I would be working on legitimate things and not just copying paper.

Based on the guidelines above my unpaid internship was probably illegal as I was treated like an analyst (and probably saved them from hiring another one). Looking back I have no regrets whatsoever about the experience. The things I learned were priceless.

Now...this all comes with a pretty big caveat. My (parents') financial situation allowed for me to take on this internship even while not getting paid. I know a lot of people who would not be able to take an internship like this because it did not pay enough to cover super cheap college living expenses.

I think unpaid internships where you grab coffee, copy documents, or do other administrative tasks without learning anything are unfair to the intern. But if you can learn a ton I believe that unpaid internships can be a fantastic opportunity where the intern is paid many times over through learning.

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Sep 19, 2013

It sounds like the unpaid internship program in Hollywood is significantly more destructive than that in finance. Hollywood in general is a factory that takes advantage of people anyway it can, I've heard absolute horror stories about the crap the producers often try to pull. I'm guessing that after 'making it' in such an environment, A list Hollywood types percieve all business to be as scummy as the entertainment industry, and thus feel compelled to take a hard line against business.

Banks at their worst tend to pale in comparison to the typical sleezy day to day of Hollywood.

Sep 19, 2013

At the end of the day, it is an agreement between employer and employee. Outside of those two people, it should be no one else's business.

I would agree with you, but then we'd both be wrong.

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Sep 19, 2013

So you don't believe in any employment law at all?

Sep 19, 2013

I think an unpaid internship is only worthwhile if it offers (1) valuable learning experience which increaes your chance of getting a full-time gig; (2) decent potential payoffs. I completely understand why plp in PR and filming industries condemn unpaid internship because most full-timers get paid peanuts anyway. But for those who eventually land BB full-time gigs, losing pay ofr a few months is NOTHING.

The Auto Show

Sep 19, 2013

I worked at an unpaid 'internship' at a small PE firm in NYC to gain some financial experience to make a career change. I would be lying if I said it didn't make a big difference in getting a full time job, even though the internship was completely worthless in terms of learning anything.

Never the less, unpaid internships are plaguing the economic recovery. It's a matter of supply and demand. Why would companies pay someone when they can get all their work done for free?! That will continue until job growth returns and few people are willing to work for free.

Sep 19, 2013

@rogersterling - on an individual basis, yes, totally. On an industry by industry basis, maybe. On a systemic basis....not so much. You can have one person or one industry take advantage of people, but when it spreads out into every other area people tend to say "fuck you".

In the case of Hollywood, I'm actually not in favor of legislation. If someone wants to go into showbusiness to get rich, let 'em, but it's not an essential industry at all. In the case of most other industry, remember that before the current laws came around there were unions, and before the unions people took to armed conflict....and before that, it was full blown war.

This is another industry where I think the only new legislation should be mandatory full disclosure. How many people are paid exactly what? Then people don't go into a situation blinded by all the sweet talk.

Sep 19, 2013

Most of the time the promised "valuable experience" is dubious. These companies build their business strategy on exploiting youngster eager to get a foothold in a competitive job market. It drives down wages for everyone else and also a lot of the time it excludes kids who aren't from fairly well of families. If someone needs to earn money over the summer he's pretty much screwed.

Sep 19, 2013

I'll chime in my personal experience:

I had hoooooooooorrible grades in undergrad, and didn't know I wanted to go into finance until middle of junior year, which as you know is too damn late to do anything meaningful...so I threw a Hail Mary and somehow got an unpaid wealth management internship in a BB for a quarter (credits only). Dashed out of there in 3 months and found a paid internship in private banking that I never would have gotten if I didn't do the unpaid internship, which then led to even more interviews (not finance related...but because the BB's name was recognizable everywhere) that somehow landed me a position at a boutique bank.

I'm a pretty big proponent of unpaid internships while you're in school because I benefited tremendously from it. YMMV but it really was a game changer for me. I realize I'm in the minority but with the competition nowadays how else are you going to stand out? :)

Sep 19, 2013

I'll throw in my 2 cents.

I did an unpaid internship over this past summer, and it was probably one of the best choices I could've made at the time.

I didn't really have many options - I was a freshman at a non-target and had horrible grades. I had a BO AM internship under my belt that really came down to filing and data entry, so I hit the networking trail hard in March, and by May I picked an unpaid ER internship at a MM IB over a paid internship at a consulting/insurance startup. It was an unpaid job, but I did get a stipend/bonus at the end of the summer which I was told would be figured based off how many hours I worked and the quality of my work/attitude/etc.

Experience wise, this place was a gold mine. I went in without knowing how to do anything really with no accounting classes taken, and came out at the end of the summer knowing how to throw together some models, valuation exposure, and I'm able to show interviewers entire sections in published reports that was entirely my work. My analyst didn't have any associates, so the firm hired myself and another intern to work for him, so I guess that's why we had such great exposure.

Since it was unpaid they gave us some latitude with our hours, but on average us interns did 730-530, and it was cool to show up around 10 or 11 if we partied the night before (unless there was something about to be published/deadlines).

However, the biggest disappointment was with my stipend. I assumed they'd do something where they guesstimated my total hours, multiplied by minimum wage and gave me like 1/2 or 1/3 of that.

They ended up paying me what equated to getting paid $0.20/hour, with a lunch getting paid for every once and a while.

I wouldn't go back there, but the experience was definitely the main thing to be gained over the summer. I started networking again in July, and already have some really good leads for a summer ER spot at a couple top MMs, a BB, and a couple buyside shops ($10-15B AUM).

I think that whether or not working unpaid is totally up to each person's discretion, but the hiring side should be up front with the fact that its unpaid right away. When the position I'd get was first mentioned by who I was networking with the second thing he even mentioned was that it was unpaid /w a bonus and if I'd be ok with that.

Sep 20, 2013

if the intern signs up for it willingly, knows exactly what will be expected from them, and they will gain valuable experience and perks (not cash) then I'm all for unpaid internships (I did 3 myself during ugrad). We have a great team of unpaid interns (none of which put in more than 10 hours per week on average), and we do our best to be upfront about what they can expect and we try to make it worth their while by offering free guides, job board access, letters of recs, etc etc etc. Have not had a complaint yet from an intern - key has been being very honest about their duties before they get started and making it a fair exchange of their time for the tangible/intangible benefits we offer.

WSO's COO (Chief Operating Orangutan) | My Linkedin

Sep 20, 2013

I used to think that it was at the discretion of the intern, but recently I've come to realize that a lot of kids don't really know any better and when you're stuck in an unpaid internship, you're kind of stuck. I say that because it's not like a paid internship where you can quit and get your money's worth if there's something you don't like. At an unpaid internship, if you can't finish you literally get no value out of it so people feel oblige to suck it through. This in turn means a lot of unpaid workers kind of have to take more abuse and BS they did not sign up for or else their work goes to waste.

Example, my buddy signed up for a magazine just because she thought it'd be fun to work a bit there. They made it clear to her the work she had to do and she was ok with that, but they then near the middle-end, they suddenly had her do sales work and claim that she'll learn from talking to people. I acknowledge that she'll learn yes and she acknowledges it as well, but I'm just of the opinion that she was misled. And when I was suggesting she quit, her response was that quitting just isn't much of an option here since the main value of an unpaid internship is the resume builder to get something else... quitting is the same as throwing all your other work away which is pretty hard to do.

I know paid jobs have managers who suddenly have you do something completely different as well. But, workers feel like they have more discretion since the monetary value has already been gained for whatever work they've done whereas unpaid is sort of an all-or-nothing experience which forces interns to a corner.

I'm actually ok with unpaid internships, but I just wish there were more stringent rules on what employers can make them do or the transparency on what employers plan to make them do.

73 good sir!

Sep 21, 2013

Interesting responses, I'll share my experience.

I was a recent Master's graduate in biochemistry but didn't enjoy academia/didn't see a future there.
Wanted to join a consulting firm, but was out of cycle/the few interviews I got didn't work out.
Found an unpaid internship at a boutique consulting firm.
Gained tons of experience working closely with the managing director.
This experience helped me get hired full time at another boutique.

For me it was a win, it helped me gain credibility (as in consulting IS what I want to do) and gave me some great real world experience.

I guess know what you are getting into and what you are looking to get out the experience.

Sep 21, 2013

I wonder if you could do something like create a one-time scholarship for an unpaid intern that they receive on completion of the program.

Sep 23, 2013

Have done two unpaid gigs. First AM role landed me a IB role, and hopefully this past summer enables me to get a solid gig.

I think this really comes down to human decency. My first boss treated me to lunch sometimes and even gave me $100 if he knew I was meeting a girl for drinks. He knew I was busting my ass for him, and was appreciative. This summer my firm also refused to pay for my subway ticket or even coffee, had me work a few weekends, and was a very unfriendly environment. Overall I sometimes even forget my first gig was unpaid because I actually knew what I was producing was appreciated, whereas this summer it was openly clear that the firm was too cheap to hire full-time analysts.

I think culture plays a larger role in the overall experience you have with these type of internships.

"Whenever you feel like criticizing any one, just remember that all the people in this world haven't had the advantages that you've had."
-F. Scott Fitzgerald

Sep 26, 2013

It depends really...though we shouldn't always have pay as the top priority, it is definitely something we should be wary of to make sure corporations aren't just exploiting new graduates for cheap labour

Sep 30, 2013

I did an unpaid internship this past summer abroad. I learned a lot and was given a great deal of responsibility. My advice: I would take the opportunity if you have it. If you know it will be great experience (in my case phenomenal), it can't hurt. Sure I had to pay for travel expenses (flight and daily commute), housing, and meals, but in the end the relationships and connections that I made and the experience that I gained was well worth it.

Traps

Oct 23, 2013

What's worse than an unpaid internship? I was required to provide the company a letter stating I'd receive credit for the internship - cost me $300 bucks... I don't need the credit, I have enough.

However, my current unpaid and my previous unpaid were both WELL WORTH IT. My paid internship beforehand, not at all. And they paid ~$20 an hour at this F50.

The bozos that complained about unpaid internships made it even worse for everyone with this class credit bullshit. Now we're paying for it!

Nov 3, 2013

OK, I think a lot of people aren't quite understanding the problem with unpaid internships. As a student they're nice because the company doesn't take risk. The problem is that the job that you are doing is taking a job from someone else, and because of that it hurts the economy in general. I'm not saying every intern should be $20/hr, but whatever minimum wage is now is important because it will force the company to pay for the value they receive. Does this increase costs? Yes. Is that bad? Well, for those of you who remember back to economics/monetary theory, increased costs that can be passed along to the customer are good for the economy and don't hurt the firm.

Just a few thoughts because I pass out again (yay flu!)

May 21, 2016

I completed 3 unpaid internships at 3 banks, 6 months in total. I converted my last internship into a FT offer, and I am still a sophomore student.

From my point of view, it is definitely worth it.

May 21, 2016

I don't understand the argument against unpaid internships when compared to a semester at university.

Colleges charge students thousands upon thousands of $$$ for the "opportunity" to get a job upon graduation and the alumni network access. With an unpaid internship, you get both of those things for free. 90% of what you learn in university will be irrelevant to the job anyways, at least you have the chance to pick up something moderately useful or meet important people on the job.

May 21, 2016

I also had a positive experience with an unpaid internship.

My resume wasn't competitive enough for more legitimate summer internships, so I ended up doing 3 months at a small AM shop in their ER department for free. Learned a ton and spun the experience into a FT sell side ER offer. I even used the fact that I worked for free during one of the interviews to emphasize dedication etc...

It really depends on the situation though. I was lucky enough to able to live from home during the internship which made the unpaid aspect possible.

May 21, 2016

My first internship was unpaid at a boutique alternative investment shop, while it was a pain in the assignment to work 20 hrs a week during school it was a great experience and resume builder

May 26, 2016

I see it more as a supply-demand setup than just a firm on the lookout for unpaid interns. For instance, international graduate students are not allowed to pursue paid opportunity till completion of a certain number of credits. With huge loans to pay and pressure of securing a job, they do apply and agree to work for free in huge numbers, just to build some 'US work experience.' Also, not applicable to big corporations but smaller firms, especially those struggling with funds (startups) might offer superior learning opportunities, especially regarding working closely with the senior members. As mentioned by ai215, quality of work is the dealbreaker in such cases.

Dec 20, 2016

There's already a thread about thus, but yeah this is insane. This won't make more companies pay interns, it will just make more companies not have interns. People are so ignorant. They don't hire interns because their business model will collapse without them. They hire them because they will provide a moderate, marginal benefit to the firm while "giving back". By forcing firms to pay interns and go through formal hiring processes they are just destroying opportunities. I had an unpaid internship at it was a 100% mutual relationship where I understood there weren't hiring. If you are an idiot that spends half a year fetching coffee and shocked that you don't end up with a FT offer then that's your own fault.

Dec 20, 2016
nytimes.com:

the judge forcefully called for following criteria that the Department of Labor has laid out for unpaid internships. Those rules say unpaid internships should not be to the immediate advantage of the employer, the work must be similar to vocational training given in an educational environment, the experience must be for the benefit of the intern and the intern's work must not displace that of regular employees.

Sounds perfectly fair to me. Any unpaid internship that displaces the work of a paid full-time employee is akin to slave labor. And these opportunities inherently benefit the wealthy.

    • 1
Dec 20, 2016
cakepie:

There's already a thread about thus, but yeah this is insane. This won't make more companies pay interns, it will just make more companies not have interns. People are so ignorant. They don't hire interns because their business model will collapse without them. They hire them because they will provide a moderate, marginal benefit to the firm while "giving back". By forcing firms to pay interns and go through formal hiring processes they are just destroying opportunities. I had an unpaid internship at it was a 100% mutual relationship where I understood there weren't hiring. If you are an idiot that spends half a year fetching coffee and shocked that you don't end up with a FT offer then that's your own fault.

spot on.

Dec 20, 2016

It's a ridiculous, unfortunate law. Two adults should be able to contract freely, provided the services in question are legal.

And it's easy to circumvent. 30 years from now, if one of my friends calls me and says, "Hey WCR, my son, fucksupalot, isn't having luck with OCR. Think he could work at your firm?" I'll bring him in and just keep it off the books. It's nearly impossible to enforce this law. Unless the government hires inspectors to go around checking for unpaid interns, there is no real way to enforce this.

As for only benefiting the wealthy, I know poor students who would work during the year to save up enough money to intern in the summer. Now the opportunities just won't exist, and paid internships will be mostly limited to OCR (which primarily takes place at target schools).

Dec 20, 2016

I imagine the loophole around this now will be to have "volunteers" instead of interns. I know the government has unpaid internship programs which they call "volunteer programs". Otherwise, they are called internship programs. My last unpaid internship at a non-profit had me register as a volunteer instead of an intern.

Dec 20, 2016

I get the impression from the article that they are referring specifically to internships granted by companies that use their interns for exclusively non-industry related tasks: "...thankless tasks with no educational value, like ordering lunch, answering phones and taking out the garbage."

I think that, given the generally well-structured nature of the finance industry's internships, banking internship opps won't be going away any time soon. As the article mentions, the illegalities are primarily present in creative fields (where I'd suppose doing "actual work" is more risky to allot to inexperienced aspiring artists, etc.).

Besides, similarly to what datphukinnewb said, U.S. senate office interns in NYC are still unpaid, so I'm sure the article isn't making the full story clear.

Dec 20, 2016

This shit is directed at production and media interns which are essentially slaves for a couple months. Personally, I hope they simply stop offering internships. Then all the whiny little girls who complained will have no way of breaking in to these industries and can enjoy the fruits of their labor.

No one is forced to do anything and the idea that interns add value is comical. Smaller places usually don't need interns nor can they afford them. Offering unpaid internships is a great way for people to get experience and have firms offer positions that they otherwise wouldn't. And when you do an unpaid internship you can usually get more flexibility in your schedule so you can do these during the year.

Dec 20, 2016
Chessboxer:

rI think that, given the generally well-structured nature of the finance industry's internships, banking internship opps won't be going away any time soon. As the article mentions, the illegalities are primarily present in creative fields (where I'd suppose doing "actual work" is more risky to allot to inexperienced aspiring artists, etc.).

I think you're overestimating just how many finance internships are well-structured.

Dec 20, 2016

perhaps I should have said "comparatively well-structured"... but I guess that's only a perception stemming from the fact that IBD involves a lot of mind-numbing gruntwork, so giving interns mind-numbing gruntwork is essentially giving them banking experience. It just looks worse for creative industries.

Dec 20, 2016

yeah these are the kind of articles that piss me off. If you don't want to intern, nobody is forcing you to do so. The experience is what matters the most. Its not slave labor, its volunteer labor.

Dec 20, 2016

You know what, I would be more than happy to do the work that FT people for free, because you will learn more from doing and the chances that you can score a FT offer when your done.

Dec 20, 2016

IMO, if the unpaid intern is doing "actual work" related to his education, it's totally worth it to do it unpaid because he will have something to talk about during a FT interview.
But if he is only "getting coffee", then the employer should pay him at least the minimum wage because the experience and future value he gains from the unpaid intern is very limited and is not worth it, thus it should be compensated in the form of cash.

Also, i'm not saying that unpaid internships are wrong, just to comment on the argument "you are not forced to do the unpaid internship, you choose to do it", students "choose" to do unpaid internships only because there is very limited better options offered by employers. Students "choosing" to do unpaid internships doesn't necessarily make it right for companies not to pay their interns.
Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

Dec 20, 2016

The big guys don't give a shit (goldman,etc). A lot of the small shops, whether it be a boutique bank,hedge fund,pe firm,whatever,hire a lot of unpaid interns during the year(part time). This won't hurt ivy leaguers, rather state schoolers who can't get the big name jobs.

Dec 20, 2016
fhurricane:

rather state schoolers who can't get the big name jobs.

Kindly STFU, fh. So sick of hearing stupid college kids play the fucking status game with their school. Why don't you spend 5 seconds looking at top firms and where the various people did their undergrad.

The main beneficiaries of unpaid internships are rich kids who don't have to give even one moment's thought to earning money over the summer. Unrich kids who need to make some cash are shit out of luck.

Dec 20, 2016

Yeah, I realize that ivy league candidates won't be affected to the degree as less-recruited schools, so the article title threw me off. But not all ivy league candidates will land a paid internship, so they should not be discounted entirely. And obviously the boutiques and localized shops will feel the pinch if it this ever amounts to anything.

Really what I am interested in is what do you think 1) the likelihood is that this could happen (it would affect all industries hiring unpaid interns), and 2) the result is of this happening?

Dec 20, 2016
tools.of.the.trade:

Yeah, I realize that ivy league candidates won't be affected to the degree as less-recruited schools, so the article title threw me off. But not all ivy league candidates will land a paid internship, so they should not be discounted entirely. And obviously the boutiques and localized shops will feel the pinch if it this ever amounts to anything.

Really what I am interested in is what do you think 1) the likelihood is that this could happen (it would affect all industries hiring unpaid interns), and 2) the result is of this happening?

I would argue the opposite. Many people who get these unpaid internships got a lot of help from aunts and uncles after partying through three years of school. Also, few middle-class kids (more likely to be going to non-target state schools) will be able to afford going a summer without earning money. Personally, I would have gone back to the clearing firm and taken $10/hour between my Junior/Senior summer over working at an NYC BB unpaid.

Bottom line, I think, is that this move by the federal government hurts everyone. But the damage is felt disproportionately by people:

-Who have the financial resources to earn $0 over the summer.
-Who have the friends and connections to land a job paying $0 that they wouldn't be qualified to take paying $7.35/hour.

My experience is that state schoolers have few if any connections. They usually get hired into most BBs purely on their academic and financial background- not relatives, friends, frat buddies, or even the name of their school. One can say the same thing of most target school students, too, but most of us recognize that there are a number of more marginal hires in every analyst class. (You can usually spot who they are because they are focused more on pedigree than doing a good job.)

My view is that this rule change hurts more marginal rich students the most, and there are usually proportionately fewer rich kids at state schools than target schools. It really doesn't matter to me because I have a job, and it doesn't matter to my brother because he got into an honors program that's more selective than most Ivies, but for a typical private school kid, this might be bad news.

Dec 20, 2016

well the govt is obviously doing this to try ro get extra tax from companies, so I would guess it's inevitable

A lot of the part time spots during the year at small shops would go away. (i have heard of only one company giving a full ime unpaid internship, who the fuck would want to do that. The expenses would kill you, especially in nyc)
I personally have had my experience bolstered by one of these internships, so I am vehemently opposed to this.

Dec 20, 2016

To me this is the realization that Obama will be unable to pay for all of his social programs without additional taxes, and he doesn't want to tax individuals directly. So what does he do? He tries to gather social support (from labor laws) to tax businesses if they want to keep their employees. Unpaid positions would likely become minimum wage positions (and I wouldn't put it past him to further increase minimum wage above the current increases).

Obama has attacked businesses recently as well. He effectively increased the poverty level by allowing individuals with incomes less than 133% of the current poverty level to qualify for gov't health insurance. Also, he redifined what it means to be wealthy and what it means to be a small business by imposing additional taxes (in the form of fees) on firms with combined annual payroll exceeding $250k that do not offer insurance to their employees. Small businesses traditionally have payrolls much higher.

Hidden tax revenue will be the name of the game to fund a big government.

Dec 20, 2016

Hope and Change!

Dec 20, 2016

Wow. The level of invective on this thread is ridiculous. Is there one of you, honestly, who thinks that the few millions in tax dollars this might create will even be enough to pay the enforcement costs, let alone make a noticeable dent in the cost of healthcare? I mean, please, think before you speak.

Unpaid internships have always been illegal, since the passage of the 13th amendment. They also clearly violate minimum wage law. When I did an unpaid internship under President Bush, HR was very explicit about my need to get credit for the internship, so they wouldn't be in violation of the law. The fact that you're outraged over the enforcement of a law with regards to something that is clearly illegal is just ridiculous. If you want to get an unpaid internship, it is very simple; get credit for it. This is a win-win-win - you stay clear of the law, you get school credit, and it's also a screening mechanism for employers - do you really think any decent employer's HR is going to knowingly violate federal law so they can hire some snot-nosed 19 year old, just because you go to an ivy? The only places that were breaking this law in the first place were places you wouldn't want to work.

The only people this might affect are those pursuing politics, as federal law prohibits granting school credit for internship on political campaigns, but I doubt that applies to many of you.

The Bloomberg piece you cited is ridiculously one-dimensional in its approach, and appears to have done minimal research on the subject. The reason unpaid internships are a problem is not because of exploited ivy leaguers; it is, as I posted in another thread on this topic, because unpaid internships tend to limit intergenerational mobility by constraining the ability of poorer students to effectively compete for employment. The NYT has some more nuanced writing on the subject, if you care to read it.

Dec 20, 2016

Drexel, they an help a lot,and not just for students. I know a guy thar graduated last May with no job. He cold emailed managers at small hedge funds. He got a spot interning,and eventually was hired by a different fund. Think about it. If you contact a manager saying you want an unpaid spot, and the guys brings you in for an iterview and likes you, hances are he will give you a spot because he has nothing to lose. Now if you contact him,he will first consider whether he can afford you or not, and he probably won't hireyou. You see,its a win win the way it is right now.

Dec 20, 2016

fhurricane:
how can a hedge fund manager not afford to pay someone minimum wage? lets be real here. its immoral to have unpaid interns.

Dec 20, 2016
PA:

fhurricane:
how can a hedge fund manager not afford to pay someone minimum wage? lets be real here. its immoral to have unpaid interns.

the point is,when faced with having o pay someone or not, they willchoose not to. It's not unethical because the intern knows it's unpaid going ib. It will open doors for them in the future.

Dec 20, 2016

How the fuck is it immoral? If someone needs work and is willing to do it for free in return for the potential for future gains, and a firm needs someone to do entry level tasks, it is a mutual agreement. They need each other equally (actually, the firm probably needs the labor less since it is easily replaceable), and both benefit, or else the arrangement wouldn't be made it the first place.

Dec 20, 2016

This is all total bullshit. Unpaid internships are a great way to get around HR altogether and actually meet people that matter. The pay is in connections, lunches, education, and golf rounds (at least it was for me). Drexel, I can smell the stench of your self-righteousness through the computer screen.

Dec 20, 2016

The NYT article really highlighted employers giving these kids unpaid internships under the pretext that they would learn industry skills and in reality just used them as slave labor.

I think a lot of people on this board are upset because it will essentially eliminate a great opportunity for people to get relevant experience.

Dec 20, 2016

BTW, being paid in experience is still being reimbursed for your time. Unpaid janitorial work is a violation, but if you are coming in and doing excel work, comps, whatever then you are being rewarded with work exp which will make you more desirable to other potential employers.

Dec 20, 2016

I am all for unpaid internships because the connections you will make (if you do superb job) are worth way more than the few grand you'll get as an SA/intern.
But at the same time, it's subconsciously giving special treatment to kids with well off Parents. You can accept unpaid internships when Daddy Warbucks is going to pay all your bills and rent. What does this mean for the blue collar families who were already struggling to get by before and have been beaten down by the recession? The chances of them being able to pay their kids'bills and rent. And the chances of some 20 something getting a personal loan these days.....not happening.

Dec 20, 2016

I'm gladly taking an unpaid over the summer.

Dec 20, 2016

Back in the day weren't most Wall Street Internships unpaid, especially the trading ones. "Pursuit of Happiness" had like a 6 months one that was unpaid.

Dec 20, 2016

First off this is probably an irrelevant argument for the purpose of this message board because the federal government probably isn't gonna waste the time to insure that every single firm is paying its interns, especially boutique finance firms.

That being said, unpaid internships aren't the problem, nor what the government is allegedly targeting. They are targeting the unpaid internships that do not provide industry knowledge or a transfer of skills. In finance this would be the small shops that hire unpaid interns to be office bitches and nothing more. However, anyone that knows how to bullshit can spin this into something meaningful to help you get a real gig. Not to mention, future employers aren't hiring you for what you learned in your low level internship but rather want to see that you are interested in the field with a track record to back up your claims.

While the class divide holds some merit, if someone truly needed the money they could be an unpaid intern by day and work another job, restaurant/bar/store, by night. Yea you might have to worker harder than your rich peers but it doesn't preclude you from obtaining the internship. Truthfully in the end those kids that work harder will probably be better off anyway.

According the the Fair Standards Labor Act the following provisions must be met to have an unpaid intern.

1. If the training, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in a vocational school;

2. If the training is for the benefit of the trainee;

3. If the trainees do not displace regular employees, but work under close observation;

4. If the employer that provides the training derives no immediate advantage from the activities of the trainees and, on occasion, the employer's operations are actually impeded;

5. If the trainees are not necessarily entitled to employment at the completion of the training period;

6. If the employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Dec 20, 2016
ke18sb:

While the class divide holds some merit, if someone truly needed the money they could be an unpaid intern by day and work another job, restaurant/bar/store, by night. Yea you might have to worker harder than your rich peers but it doesn't preclude you from obtaining the internship. Truthfully in the end those kids that work harder will probably be better off anyway.

Do youn even work in banking? I would love to see you getting out at 2 A.M. and getting to another job...

Although I don't disaprove unpaid internships, I believe there should be some sort of funding if only to pay for food and rent, that would level the playfield between rich kids and poor kids.l

Dec 20, 2016

Psh. Just signed with Bank of America Merrill Lynch as a WM SA....UNPAID. weak.

Dec 20, 2016

If a company can't even give you minimum wage, the work you are doing is clearly useless/pointless

*exception for training

Dec 20, 2016
spartahill:

If a company can't even give you minimum wage, the work you are doing is clearly useless/pointless

*exception for training

First of all, if you don't have personal experience on this topic, then how bout STFU. Seriously, how many people have to say that ITS NOT ABOUT THE BULLSHIT WORK! I worked on projects that the Ds and MDs wanted to do to make their job easier but didn't necessarily have time to do. Then I did the shit work that the Sales Assts. didn't want to do. For the umpteenth time, its about the connections and experience, not about the damn work!

And to fhurricane, yes, some of us do choose to do a FT summer internship for no pay. You of all kids should understand. I'm sure you're a spoiled brat who doesn't have to work, so why would it matter if you got paid anyway?

Dec 20, 2016

I am doing an unpaid internship.

I am working directly under a Partner and in charge of a fully operational model. Yes, the follow-up offer is shit (under $1MM), but I got to build a 1,200 line model. Suck on that all of you haters of unpaid, unstructured internships @ no-name boutiques.

Prestige whoring on WSO makes me sick. Some of you would rather suck dick as long as it's @ GS/MS.

Dec 20, 2016

I am actually looking for any internship in finance this summer, unpaid or not...Senior graduating from a top high school in New York, although not matriculating to a top or target university. Anyone know where I can find any finance/entrepreneurship related internships? PM me please. Thanks!

Dec 20, 2016

i doubt its about taxes. most people who take internships have very little income aside from that, which would result in them getting almost off the the money back in a tax return. i had a paid internship and pretty much all i ended up paying was social security since my income was not at a substantial level.

Dec 20, 2016
dew2229:

i doubt its about taxes. most people who take internships have very little income aside from that, which would result in them getting almost off the the money back in a tax return. i had a paid internship and pretty much all i ended up paying was social security since my income was not at a substantial level.

This argument neglects the fact that the employer also matches your taxes and will not be refunded. Additionally, if it is truly a small shop with a total annual payroll near but beneath $250k, the unpaid intern could save the firm a 2% tax on its total annual payroll amount for not offering health care under the new health care bill. And this goes for the other benchmark 2% increases of total annual payroll (if the firm does not provide health care for employees):

Annual Payroll under $250k ............................ Tax = 0% of payroll total
Annual Payroll between $250k and $300k ... Tax = 2% of payroll total
Annual Payroll between $300k and $350k ... Tax = 4% of payroll total
Annual Payroll between $350k and $400k ... Tax = 6% of payroll total
Annual Payroll over $400k ............................... Tax = 8% of payroll total

Just to put it in numbers: If A firm has a total annual payroll of $399k and does not offer health care to employees but could benefit an intern, the firm would like to not pay the intern. If the intern got $1k in income, the additional taxes to the firm would be taxes on the $1k plus a tax increase of [0.08400k - 0.06399k] = $8,060. It would cost the firm a total of $9,060 plus matched taxes on the $1k to pay an intern $1k. An unpaid intern would benefit the intern if he was willing to accept it and would benefit the firm by saving them over $9k.

Everything is about money, in some way or another. And this seems to be another way for the government to close loopholes in the health care funding - a bill that obviously is not profitable as it sits, and raising taxes directly hurts politicians.

Dec 20, 2016

It'll hurt more in areas like journalism, media, advertising, PR, politics, etc. They have a more unpaid intern culture and also some are just broke. Finance, Engineering, etc, will be fine.

Dec 20, 2016

I have been in banking for 4+ years; analyst and associate. All unpaid internships that I've heard of are part time during the day that work around your class schedule. I've never heard of someone cranking out true banking hours until 2am as part of an unpaid internship. In my experience, personal or hearsay, employers were very flexible with ones schedule because they were very conscious of the fact that kids were unpaid. Is it like this everywhere, who knows. So under the assumption that its part time and flexible yes you totally can do both; and yes you will probably be better for doing so. I'd guess I'll throw the question right back at you HF, do you work in banking, and have you ever seen an unpaid intern cranking out 80 hour weeks?

Dec 20, 2016

I think people are hearing unpaid and thinking it is for 3 months over the summer. The type of unpaid internships which a lot of people have which are unpaid are local. Yes, if you go to school far away from a financial center you are screwed, but I really don't think there are too many 3 month long unpaid internships going around. If there are local kids will scoop them up. Focus regionally and do the internships during school. Every city has a PWM office which will give you some experience and add a name to your resume.

Dec 20, 2016

it's kinda ironic how obama is trying to help small businesses, yet if this policy passes, the smaller firms are the ones that are going to be hurt.

Dec 20, 2016
j-phone:

I read this post about the guy who complained that his UNPAID intern was not doing what she was supposed to be doing. This is simple. It's a ridiculous comment and outrageous statement from an employer that relies on unpaid interns to run the business.

I have done an unpaid internship at a boutique when I couldn't get a gig at a tire 1 bank. I hated every minute of it. I was involved in so many deals and sourced a deal as well. I was actually the key contact for many clients. At the end of the internship, despite all my achievements/money that I brought to the firm, it was "thanks for your work, see you later." It is not a great honor to get involved in deals only to be told that you have done a good job, thanks for doing it for us. "We wish we could pay you, but we run a small boutique. We can't pay you." It is just not good enough!

The poster was from SA. I can't imagine firms like Carlyle or any other good PE firms hiring unpaid interns (or those without much experience).

In Wall Street, we are trained to think 24/7 how to make more money. How can we teach junior bankers to do that when you don't even pay them? We are taught in WS not to be emotional or melodramatic. So it makes me so angry that there are some analysts, associates and VPs (even at BB) who naively think that interns can be unpaid because they are there to learn. As we say in WS, it's not the learning that matters, it's not the hours that matter, it's the result that matters.

I think we should name firms that hire unpaid interns. The reputation of the firm is really important in WS. I strongly believe that it should be illegal. It's a humiliating experience to work as an unpaid intern.

I've always been torn between this but for a totally different reason. People know what they are doing when they take unpaid internships, especially in finance. The doors it opens are worth far more than $20/hr or whatever..... I think it's an unfair system to kids from lower middle class backgrounds though who cannot afford to take a job without pay. I see your point but I don't think it is a very strong one. The value of having that kind of experience on your resume is worth far more than the amount of money you would have made elsewhere.

Dec 20, 2016

BAN THINGS I DON'T LIKE. MY OPINION SHOULD BE YOUR LAW.

You can't kill the guys you trade with

Dec 20, 2016

Personally did several unpaid internships. Let's look at the economic value it added for me:

If I had not done them (very little relevant experience on my resume)=some 2nd rate job starting as a financial advisor somewhere-1st year salary ~$40k
Having done them (great experience on my resume)=accepted FT analyst position at a large MM on wall street-1st year salary: $70k +bonus

In reality, I would have paid them for the experience. At the end of the day, if you show how you will make the firm money, they will do what they need to for you to stay. If they don't, it likely means you didn't add as much value as you thought you did.

Dec 20, 2016

You are probably exaggerating your role and/or treatment by your superiors at your internship to us. If you were as actively involved in transactions and competent as you are suggesting, then the firm would have at least told you that they would consider you for future employment. In the most likely scenario, they would have given you an offer. You were at essentially at a summer long interview and from your perspective you were a superstar. Why would a company treat you like you said they did if you were that good? From my experience, unpaid internships can turn into paid ones if you add value and if your boss likes you.

I agree with you that unpaid internships that use you for financial gain without giving you any valuable experience should be made public, but I don't think most finance internships fall within that category. Most of the bad internships are within media companies and health care. For example, a local hospital in my city "hires" summer interns and advertises that they will be getting exposure to cutting edge medical procedures but all they end up doing is paperwork and office errands.

Couple questions for you..

If a company does not bring on interns(paid or unpaid), would an unpaid internship still be unfair if you convinced them to take you on?

What if the employer told you that there was a possibility of employment concluding the internship based on performance?

Dec 20, 2016
redrocksky:

You are probably exaggerating your role and/or treatment by your superiors at your internship to us. If you were as actively involved in transactions and competent as you are suggesting, then the firm would have at least told you that they would consider you for future employment. In the most likely scenario, they would have given you an offer. You were at essentially at a summer long interview and from your perspective you were a superstar. Why would a company treat you like you said they did if you were that good? From my experience, unpaid internships can turn into paid ones if you add value and if your boss likes you.

I agree with you that unpaid internships that use you for financial gain without giving you any valuable experience should be made public, but I don't think most finance internships fall within that category. Most of the bad internships are within media companies and health care. For example, a local hospital in my city "hires" summer interns and advertises that they will be getting exposure to cutting edge medical procedures but all they end up doing is paperwork and office errands.

Couple questions for you..

If a company does not bring on interns(paid or unpaid), would an unpaid internship still be unfair if you convinced them to take you on?

What if the employer told you that there was a possibility of employment concluding the internship based on performance?

On the last point, the hiring company will always tell you that there is a possibility to continue as full-time upon the successful completion of the internship. In 9 out of 10 cases, small boutiques are not lying, but they are saying that there is a possibility. This usually means following;

They don't know where they stand in a year (or even in 6 months). They are just hoping that they can close a few existing deals by the end of this year and make pretax profit (revenue/sales) of say USD 2 MN by the end of this year. This is nothing in Wall Street. To keep the lights on in NYC, it costs a lot more than most here think. With the pretax (so sales/revenue) of 2, you can't possibly pay analysts or associates. Just as a comparison, I hear that a partner at Evercore is expected to bring in USD 7 - 8 MN (per partner). A partner in a small boutique tends to bring in a lot less. So, in a small boutique, they share a tiny earning among 3 - 4 partners.

In a small boutique, when there are not many deals, they need to do everything they can to save cash on their book. This is why they offer 3 - 9 months internships to graduates (who can't get a job at a proper IBD shop). Their business model relies on a constant inflow of unpaid interns and occasional workers (who might be paid at some point, but not the traditional salary - commissions they call it).

What upsets me is that there are boutiques that can't function without unpaid interns. I can name 2 off the top of my head. I am friends with a partner at one of these firms.

Dec 20, 2016

I think the unpaid internship phenomenon (I have actually never heard of it in the part of Europe where I live) is a corollary of the more cynical attitude towards labor prevailing in the U.S. One could of course argue that it's beneficial from the point that, at least theoretically, more people are able to acquire work experience. However, that in itself could also be argued is a meaningless rat race. I therefore agree with OP overall; pay atleast a salary equivalent to what you would get at an unqualified job for the average-joe student.

Dec 20, 2016

I see the whole of an internship as to:
1. Get a FT offer (either from that firm or using that experience to work with another firm)
2. Learn as much as I can

I personally would gladly do an unpaid internship with a top tier firm if it meant getting the opportunity to land a FT trading position that I desperately want. I see internships as a continuation of the interview process. I don't know of any top tier firms that do unpaid internships though.

Dec 20, 2016
mastertrader89:

I see the whole of an internship as to:

1. Get a FT offer (either from that firm or using that experience to work with another firm)

2. Learn as much as I can

I personally would gladly do an unpaid internship with a top tier firm if it meant getting the opportunity to land a FT trading position that I desperately want. I see internships as a continuation of the interview process. I don't know of any top tier firms that do unpaid internships though.

On the last point, you are quite right, sir. No legitimate or established firms do because they can't afford the chance of damaging their reputation. I have heard that Oppeinheimer offered an unpaid summer internship position in exchange of $5,000.

Dec 20, 2016

Just to add - Carlyle does offer unpaid internships. But it's the only reputable firm that I know does this.

Dec 20, 2016

It's a free market. If you don't like it leave for a commie pinko country.

Dec 20, 2016
Christian Grey:

It's a free market. If you don't like it leave for a commie pinko country.

Amen to that bruh..........there sure are a lot of wimps on this thread!

Dec 20, 2016

There's also much more at play than just whether or not you're being paid. If you're in high school and doing a PWM internship for free before freshman year of college, get to learn basic Excel skills and read research reports, and the office is a block from your house, then it's not a bad idea.

On the flip side, if you're paying exorbitant amounts of money to travel to a different city thousands of miles away to do an unpaid internship where you'll perform duties the secretary wouldn't do as a junior, and chances of a FT offer are between slim and none, then you're an idiot.

Dec 20, 2016

Given how competitive finance internships are, and considering how financial institutions are pretty good at getting away with stuff, I don't think anything will change.

Dec 20, 2016

Unpaid internships should be illegal. Personally, I had a great time at my unpaid internship, but know many, many students who went through living hell at theirs. A company should not be allowed to profit off of someone and not reimburse them for their time. Unpaid internships are nothing but a modern form of slavery.

Now, I am sure someone will reply to my post with something like "then do not do them" or "the students chose to do them". That is a ridiculous argument. Of course the college students chose to do them. That does not change the immorality of unpaid internships. If a firm cannot pay someone minimum wage for work, the firm obviously does not value what the intern is doing.

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Dec 20, 2016

What about the argument that the interns are paid. Their payment merely comes in the form of knowledge and experience (both worth more than minimum wage in many cases)

I drink your milkshake...

Dec 20, 2016

My unpaid internships changed my life!!!

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Dec 20, 2016

WTF are you talking about? The value of an unpaid internship is in the experience and having something to talk about when it comes time to apply for FT or paid internships. Modern slavery? That's the dumbest thing I've ever heard. They aren't forced into it, they DO chose to do it. Slavery isn't a choice, way to diminish the shit that slaves went through.

And do you think unpaid interns are doing substantial work? For the most part they aren't. Companies aren't going to start creating paid internship positions. And now what you're going to have is a shitload of students who couldn't get paid internships applying for jobs with NO internship. Or they're going to put fucking Starbucks on their application. Your argument has no basis in reality.

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Dec 20, 2016

Firms can get around this rule by offering college credit, right? They still won't have to pay a dime. Either way, I don't think anything will change.

Dec 20, 2016

no one is forcing you to take an unpaid internship, if you don't want to work for free then don't take the unpaid internship. It is that simple, for those who are fortunate enough to be able to work for free then let them if they want.

i think the argument that it stops poor people who cant take the internship from getting good experience is bull crap, next they wont let you pay to go to private school because it secludes poor people from getting the same opportunity. i know this will turn into a ridiculous "equal opportunity" argument so before that happens i will say what is important is:

equal opportunity not equal outcome, this distinction basically says that no person shall be left out of an opportunity based on some innate arbitrary characteristic such as gender or race. this does not mean that everyone should get to pursue the same things regardless of financial status, it means that if one has the financial means they should be able to pursue any activity regardless of their innate arbitrary characteristics.

unpaid internships dont disclude people based on race or gender or age or sexual orientation, they give people an opportunity to work and get experience from a firm if that firm doesnt have the means or the desire to pay that person, one should only take an unpaid internship if they so chose

Dec 20, 2016

This was not a precedent-setting ruling. This has existed for a while.

It stems from employers taking on unpaid interns and having them do clerical work totally unrelated to their field of study or industry they're pursuing. I forgot how they define it, but basically, if you have responsibility for day-to-day activities, you have to be paid. If it's just a mentorship type deal, then you don't have to pay them.

Personally, I think that it's a silly law because nobody is coerced into taking on internships and are free to leave at any time if they decide that the experience they're gaining isn't worth the time.

Dec 20, 2016

Relevant discussion on reddit - http://www.reddit.com/r/politics/comments/1ge88r/j...

Clearly the views are a lot different than WSO

Dec 20, 2016

Further proves my point that every redditor is a massive pussy. One of my buddies in college worked on the Ellen Show and some Red Carpet network, working these so called hellish "13-14" hour days. He said it was one of his most enjoyable experiences, and nothing about the work was "labor intensive".

Dec 20, 2016
computerized:

Relevant discussion on reddit - http://www.reddit.com/r/politics/comments/1ge88r/j...

Clearly the views are a lot different than WSO

I care so much about the opinion of anyone on Reddit.

Dec 20, 2016

Fuck reddit

Dec 20, 2016

strong this.

If I didn't land my unpaid my freshman year of college cold calling from a NT I would not be in the position that I am in now.

Dec 20, 2016
KKS:

Unpaid internships should be illegal. Personally, I had a great time at my unpaid internship, but know many, many students who went through living hell at theirs.

Who forced them to stay? If it's not worth your time then just quit.

KKS:

A company should not be allowed to profit off of someone and not reimburse them for their time. Unpaid internships are nothing but a modern form of slavery.

So mutually beneficial and voluntary contractual relationships among adults are immoral because (a) you have decreed them as such and (b) you're unfamiliar with the definition of slavery.

KKS:

Now, I am sure someone will reply to my post with something like "then do not do them" or "the students chose to do them".

So if you know that your argument is dumb, why make it?

KKS:

That is a ridiculous argument. Of course the college students chose to do them. That does not change the immorality of unpaid internships. If a firm cannot pay someone minimum wage for work, the firm obviously does not value what the intern is doing.

Again with the 'it is immoral because I say it is immoral' argument. Some people (like me) need experience in order to progress professionally, and without such experience, aren't worth much to anyone--in fact, they may become liabilities to those firms (which would make hiring anyone without experience a more risky endeavor). The firms that offer this experience, along with their connections and technical know-how, are doing these people a great service. Who are you deny them this?

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Dec 20, 2016

Thanks for sharing. Interesting ruling but impossible to implement.

Dec 20, 2016

Comparing a voluntary, unpaid internship to slavery is comical. Many interns provide zero value to a firm. Smaller shops cannot afford to necessarily pay someone who provides little value so doing an unpaid internship is a way for you to 1) bolster your resume 2) let the firm try you out without cost and 3) gain valuable experience.

This ruling and law is more directed to other industries. I am completely against the government trying to tell grown adults what wage they have to work for. If I want to work for free then that is my choice.

Dec 20, 2016

Reading the Reddit page was interesting because not of how the opinions differed from those on WSO, but how different the experiences were. It seemed a lot of people were demanding regulation (banning) unpaid internships had worked in the film/media production industry and had gone through a lot of shit working long hours only to be dumped without any real network.

I think that experiences with unpaid internships really differ between media production and finance in that media production can afford to not pay interns. Yeah a lot of people want to work in finance, but in the grand scheme of things, it's not nearly as many compared to other industries and it would be very hard to get the type of finance-focused people to work in finance without offering some serious hefty compensation (spreading comps for free, get the fuck out of here...)

On the other hand, EVERYBODY wants to work in media production just because it's so sexy. Well, not everybody, but there are tons of kids with less than stellar backgrounds looking to be the next Ari Gold or whatever thinking that if they shell out 6 months post-grad working for free that they'll get the high-paying production assistant gig. It's only when they get on the job that there were plenty of other kids who had the same idea and are working a pyramid scheme in an industry known for not giving a fuck.

If students were to realize that there's more to life than working in media production and take their skills elsewhere, then media companies would have to pay people to retain talent. But it's very hard to convince some starry eyed college kid of following his dreams.

"Yes. Money has been a little bit tight lately, but at the end of my life, when I'm sitting on my yacht, am I gonna be thinking about how much money I have? No. I'm gonna be thinking about how many friends I have and my children and my comedy albums."

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Dec 20, 2016

We're spying on our own citizens, being hacked by china and have a worthless dollar and nearly $17T in debt yet this is the shit the government is worrying about. If I want to volunteer my time in exchange for experience that is my business.

Dec 20, 2016
TNA:

We're spying on our own citizens, being hacked by china and have a worthless dollar and nearly $17T in debt yet this is the shit the government is worrying about. If I want to volunteer my time in exchange for experience that is my business.

It's not really what the government's worried about... Obama hasn't even mentioned the case. It was an outstanding case from 3 years ago and the judge issued a ruling... if anything, the fact that it took so long to rule on shows what a low priority it is to the government/court system.

"Yes. Money has been a little bit tight lately, but at the end of my life, when I'm sitting on my yacht, am I gonna be thinking about how much money I have? No. I'm gonna be thinking about how many friends I have and my children and my comedy albums."

Dec 20, 2016

IMO, if the unpaid intern is doing "actual work" related to his education, it's totally worth it to do it unpaid because he will have something to talk about during a FT interview.
But if he is only "getting coffee", then the employer should pay him at least the minimum wage because the experience and future value he gains from the unpaid intern is very limited and is not worth it, thus it should be compensated in the form of cash.

Also, i'm not saying that unpaid internships are wrong, just to comment on the argument "you are not forced to do the unpaid internship, you choose to do it", students "choose" to do unpaid internships only because there is very limited better options offered by employers. Students "choosing" to do unpaid internships doesn't necessarily make it right for companies not to pay their interns.
Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

Dec 20, 2016

So, let me get this straight. I can't, of my own free will, choose to work for free and gain intangible benefits like (1) relevant work experience (2) a network (3) a strong recommendation and (4) a possible full time job offer. But, I can definitely work for free at a food bank, or any other charity in the country. In fact, I don't know about you guys, but I was required to volunteer 40 hours just to graduate high school.

Makes perfect sense.

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Dec 20, 2016

Also, in response to all the people complaining that unpaid interns do menial tasks for free because they have no other choice...

They have another choice. It's called a minimum wage job. Where you get paid minimum wage for doing menial tasks. Obviously, if the intern decided to take an unpaid internship over a minimum wage job, they saw some value in the experience, even if it was just the brand name of the company or the potential for networking. If that value isn't there, the intern can always quit & get a minimum wage job, where they will get paid for their efforts. It's the exact opposite of "slave labor," it's free will.

Dec 20, 2016
misscurious:

Also, in response to all the people complaining that unpaid interns do menial tasks for free because they have no other choice...

They have another choice. It's called a minimum wage job. Where you get paid minimum wage for doing menial tasks. Obviously, if the intern decided to take an unpaid internship over a minimum wage job, they saw some value in the experience, even if it was just the brand name of the company or the potential for networking. If that value isn't there, the intern can always quit & get a minimum wage job, where they will get paid for their efforts. It's the exact opposite of "slave labor," it's free will.

I didn't say no "other" choice, I said no "better" choice. For a student who wanna break in to IB, doing a part time job at CVS that pays $8/hour is not a better choice than doing an unpaid internship at a investment bank.
Yes, students choose unpaid internships because they see a value there, and there indeed is value there. But that doesn't mean it's fair for a company not to pay it's interns. Just the opposite, the company is taking advantage of the value so they can convince students to work for free. Of course, for some people, working for free in exchange of the brand name and everything is totally worth it. but for many others, they are just being made use of.
go back to my example, when everyone is paying $1 in Vietnam, you offer to pay $2, does it make it free will for Vietnamese workers to work for you?

Dec 20, 2016

Although I lean a bit to KKS and Arsene Wenger's Father (who both accidentally happens to be Europeans?) views, I think that a decent compromise could be that firms offering unpaid internships gave their intern(s) a symbolic payments for basic expenses. I.e. they could pay an intern like $300 per month or something (which of course is a ridiculous salary for anyone except an intern). That way, you would remove the risk of the intern ending the summer with no gain whatsoever.

Dec 20, 2016
Kejsaren:

Although I lean a bit to KKS and Arsene Wenger's Father (who both accidentally happens to be Europeans?) views, I think that a decent compromise could be that firms offering unpaid internships gave their intern(s) a symbolic payments for basic expenses. I.e. they could pay an intern like $300 per month or something (which of course is a ridiculous salary for anyone except an intern). That way, you would remove the risk of the intern ending the summer with no gain whatsoever.

Another European here.

I am currently doing an internship and I get $150/month (Around 40ct/hour). Honestly, I wouldn't care if I would get $0 or $150/month. I even started as an unpaid intern (I got the raise after they figured that I actually add value). It is ridiculous if you are outlawing unpaid internships. You are eliminating so many great opportunities and everybody is welcome to leave if you don't enjoy it, unless you signed a contract which you didn't read. After all, it all comes down to your preference. Just a side note, this changes things for international students dramatically. They would have to apply for OPT (or is it CPT?) for their internship which would reduce the time they are allowed to work after they graduate without an H1-B visa AND cost them an additional ~$400.

Dec 20, 2016
kinghongkong:

Another European here..

Hehe, I am admittedly European and our different views are most likely a reflection of our different cultures.

kinghongkong:

I am currently doing an internship and I get $150/month (Around 40ct/hour). Honestly, I wouldn't care if I would get $0 or $150/month. I even started as an unpaid intern (I got the raise after they figured that I actually add value). It is ridiculous if you are outlawing unpaid internships. You are eliminating so many great opportunities and everybody is welcome to leave if you don't enjoy it, unless you signed a contract which you didn't read. After all, it all comes down to your preference. Just a side note, this changes things for international students dramatically. They would have to apply for OPT (or is it CPT?) for their internship which would reduce the time they are allowed to work after they graduate without an H1-B visa AND cost them an additional ~$400.

Regarding the international students, any similar legislation would of course have to be adjusted according to the new standards. If there would be a substantial decline in the number of internships due to this new standard, as suggested, then that is of course a very valid argument against introducing a minimum pay for interns.

It's a tricky issue. My brain says go ahead, my gut says maybe.

Dec 20, 2016
Kejsaren:
kinghongkong:

Another European here..

Hehe, I am admittedly European and our different views are most likely a reflection of our different cultures.

kinghongkong:

I am currently doing an internship and I get $150/month (Around 40ct/hour). Honestly, I wouldn't care if I would get $0 or $150/month. I even started as an unpaid intern (I got the raise after they figured that I actually add value). It is ridiculous if you are outlawing unpaid internships. You are eliminating so many great opportunities and everybody is welcome to leave if you don't enjoy it, unless you signed a contract which you didn't read. After all, it all comes down to your preference. Just a side note, this changes things for international students dramatically. They would have to apply for OPT (or is it CPT?) for their internship which would reduce the time they are allowed to work after they graduate without an H1-B visa AND cost them an additional ~$400.

Regarding the international students, any similar legislation would of course have to be adjusted according to the new standards. If there would be a substantial decline in the number of internships due to this new standard, as suggested, then that is of course a very valid argument against introducing a minimum pay for interns.

It's a tricky issue. My brain says go ahead, my gut says maybe.

Agreed that it is a tricky issue. Only the implementation of the legislation can show what is going to happen in the medium/long run, but you will see a big drop in the students who can do an internship at least in the short run.

Off-topic (about the visa):
However, if you look at the track record of the US, you can assume that they are going to do little about changing the legislation (if they even). After all, international students just take away American jobs and they tend to be the money cows. After they fulfill their duty of paying full tuition, they are pretty much forced to go home. Why change the legislation to help international students if the US can't gain anything from it?

Disclaimer: I am pretty biased and frustrated about the college/visa/work scheme the US has going for international students.

Dec 20, 2016
Arsene Wenger's Father:

Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

You're kidding, right?

Dec 20, 2016
SirTradesaLot:
Arsene Wenger's Father:

Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

You're kidding, right?

If you do think so, tell me the funny part about it

Dec 20, 2016
kinghongkong:
Kejsaren:

Although I lean a bit to KKS and Arsene Wenger's Father (who both accidentally happens to be Europeans?) views, I think that a decent compromise could be that firms offering unpaid internships gave their intern(s) a symbolic payments for basic expenses. I.e. they could pay an intern like $300 per month or something (which of course is a ridiculous salary for anyone except an intern). That way, you would remove the risk of the intern ending the summer with no gain whatsoever.

Another European here.

I am currently doing an internship and I get $150/month (Around 40ct/hour). Honestly, I wouldn't care if I would get $0 or $150/month. I even started as an unpaid intern (I got the raise after they figured that I actually add value). It is ridiculous if you are outlawing unpaid internships. You are eliminating so many great opportunities and everybody is welcome to leave if you don't enjoy it, unless you signed a contract which you didn't read. After all, it all comes down to your preference. Just a side note, this changes things for international students dramatically. They would have to apply for OPT (or is it CPT?) for their internship which would reduce the time they are allowed to work after they graduate without an H1-B visa AND cost them an additional ~$400.

I totally understand your argument that unpaid interns choose to do it, it's their preference and it's free will. I totally can see where you're coming from. But my point is that they choose to do it because there's limited choice out there at the first place. Or to be more clear, there is limited better choice.

Regarding the visa issue, being an international student my self (not European though), I'm sure you have to apply for CPT when you are still in college, whether the internship is paid or not. I did a paid internship and I needed a CPT, my friend did an unpaid internship and he needed a CPT too. After graduation, again, whether paid or unpaid, an international student will need an OPT

Dec 20, 2016

@ArseneWenger'sFather: I don't think many people think the pay is immoral, more the fact that they employ border line children, work 10 hours a day with only one bathroom break and in the 90 degree heat with atrocious safety and health standards.

Dec 20, 2016
Anihilist:

@ArseneWenger'sFather: I don't think many people think the pay is immoral, more the fact that they employ border line children, work 10 hours a day with only one bathroom break and in the 90 degree heat with atrocious safety and health standards.

Maybe my example is not good. But all I'm trying to say is that students choose to do unpaid interns because they cannot find a better choice, and this doesn't make it "right" for companies not to pay their interns

Dec 20, 2016

I agree and what is/isn't acceptable is very ambiguous. Also, what Silvio said, the film/production business extorts and abuses their interns more than finance I think. I had a friend in school who was in that business and she worked quite a few hours for no pay or even stipend I believe.

Dec 20, 2016

Redditors crying about work and calling for more government control? Nothing new to see here. Boutique firms will be reluctant to take on interns if they have to pay them, all this would accomplish is limit opportunities for students to gain experience.

Dec 20, 2016
Arsene Wenger's Father:
SirTradesaLot:
Arsene Wenger's Father:

Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

You're kidding, right?

If you do think so, tell me the funny part about it

I barely know where to start. You think that someone who pays 5X wages of the next company is doing something immoral because it doesn't pay as much as in western Europe or the US? So, is the local company that pays 1/5 in your example equivalent to Stalin/Hitler? The employee in question would be ecstatic to take a job that paid 5X. Wouldn't you?

I think you run into trouble anytime you start defining a 'fair' wage. Is it fair that a guy gets paid millions of dollars to put a basketball in a hoop? People pay a lot of money to watch him play, so it's reasonable to me.

Dec 20, 2016
SilvioBerlusconi:

Reading the Reddit page was interesting because not of how the opinions differed from those on WSO, but how different the experiences were. It seemed a lot of people were demanding regulation (banning) unpaid internships had worked in the film/media production industry and had gone through a lot of shit working long hours only to be dumped without any real network.

I think that experiences with unpaid internships really differ between media production and finance in that media production can afford to not pay interns. Yeah a lot of people want to work in finance, but in the grand scheme of things, it's not nearly as many compared to other industries and it would be very hard to get the type of finance-focused people to work in finance without offering some serious hefty compensation (spreading comps for free, get the fuck out of here...)

On the other hand, EVERYBODY wants to work in media production just because it's so sexy. Well, not everybody, but there are tons of kids with less than stellar backgrounds looking to be the next Ari Gold or whatever thinking that if they shell out 6 months post-grad working for free that they'll get the high-paying production assistant gig. It's only when they get on the job that there were plenty of other kids who had the same idea and are working a pyramid scheme in an industry known for not giving a fuck.

If students were to realize that there's more to life than working in media production and take their skills elsewhere, then media companies would have to pay people to retain talent. But it's very hard to convince some starry eyed college kid of following his dreams.

this is very true. people here are interested in finance, and an unpaid internship can lead to a lot of good things in this industry. no one can deny that. but 90% of film/media/entertainment internships seem to be unpaid and you get nothing out of it. you are a coffee bitch but they rope you into the idea that you will make some connections. at the end, you've probably learned nothing, made little connections, and no one will remember your name no matter how quickly you brought the boss his decaf.

Dec 20, 2016

"At the end, you've probably learned nothing, made little connections, and no one will remember your name no matter how quickly you brought the boss his decaf."

Now, whose fault is that?

Dec 20, 2016
SirTradesaLot:
Arsene Wenger's Father:
SirTradesaLot:
Arsene Wenger's Father:

Just an example, American companies in Vietnam paying local worker there $1 an hour is generally considered immoral, regardless of the fact that local companies in Vietnam pay only $0.2 an hour. The workers are not "forced" to do the job paying only $1/hour, there's just no better options

You're kidding, right?

If you do think so, tell me the funny part about it

The employee in question would be ecstatic to take a job that paid 5X. Wouldn't you?

Exactly. Companies are taking advantage of this kind of mind to get cheap labor. Offer a seemingly "better" choice and make it looks like the workers "choose" to work for them. But the pay is still bad, although better than some. But the pot calls the kettle black

I do agree that the line between acceptable and unacceptable wage is very ambiguous. Different people have difference thoughts. That's why I'm not saying unpaid internship is wrong like clear cut

Dec 20, 2016
misscurious:

So, let me get this straight. I can't, of my own free will, choose to work for free and gain intangible benefits like (1) relevant work experience (2) a network (3) a strong recommendation and (4) a possible full time job offer. But, I can definitely work for free at a food bank, or any other charity in the country. In fact, I don't know about you guys, but I was required to volunteer 40 hours just to graduate high school.

Makes perfect sense.

TRUTH. Really this suit is just a reactionary action to some kids getting ticked because they expected A out of their unpaid internship and only got B. Although 40 hours of volunteer work for your entire four years in HS? That's bs dude I had to do at least 100 per year.

"Yes. Money has been a little bit tight lately, but at the end of my life, when I'm sitting on my yacht, am I gonna be thinking about how much money I have? No. I'm gonna be thinking about how many friends I have and my children and my comedy albums."

Dec 20, 2016
TNA:

Comparing a voluntary, unpaid internship to slavery is comical. Many interns provide zero value to a firm. Smaller shops cannot afford to necessarily pay someone who provides little value so doing an unpaid internship is a way for you to 1) bolster your resume 2) let the firm try you out without cost and 3) gain valuable experience.

This ruling and law is more directed to other industries. I am completely against the government trying to tell grown adults what wage they have to work for. If I want to work for free then that is my choice.

I agree with this. Yikes, I guess there's a first time for everything.

Dec 20, 2016

I am currently on an unpaid internship and would not risk a future job offer or a great recommendation for a few weeks pay of minimum wage. It is just not worth it.

Dec 20, 2016

Unfortunately it won't change anything. Finance companies will get away with whatever they want.

Dec 20, 2016

I find this interesting after working in the legal sector as a paralegal. I am looking at this from two different perspectives. I can see where the judge rules that unpaid internships is unlawful as internships is where you learn to gain hands-on-experience. In essence, the interns are "working" by providing a helpful hand or basically considered human capital within a company. Also that the interns are putting in hours to help the company. You could also compare this to an employee because the process a student goes through which also can lead to a comparison of being hired to "work" for the company. Essentially that is what interns are doing, they are working for the company to gain knowledge that they can use after the graduate.

On the other hand, I can see where others argue that paying them is NOT unlawful. Some argue that it has been the "tradition" or how interns are perceived. Another reason could be that gaining experience should not have a price tag as the value of it surpasses what money can offer for it. I most certainly agree that it is not slavery considering slavery is where people are being sold for a price and be forced to work against their own will along with them not having the right to leave. Also those who apply for internships should understand that internships are for the experience not the money. Interns are there to gain experience so that when they do graduate, they can use that experience on their resume and gain a head start among the rest. However, if the interns do sign on for one and is accepted, then signs a legal contract stating that the company will not pay or reimbuse, then it is legal. The intern signed a document, full knowledge of understanding that they will not be paid. Once that is signed, its signed. It is important to read the fine print before signing anything.

Quite interesting how this could be played out in similar cases.

When life hands you lemons, make lemonade

Dec 20, 2016

Europeans went from ruling the world with an iron fist to being effeminate, limp wristed, pot smoking, soccer playing homosexuals. It's embarrassing to be genetically European. Proud that my family came to America in 1638, but also displeased that the United States is slowly becoming Europe--immoral, lazy, and bankrupt.

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Dec 20, 2016

How ironic is it that most people would do an unpaid internship that involves real work and responsibilities, but doing menial brainless tasks for no wage is unacceptable. I guess we look at the skills as kind of a wage. The skills you would learn at a well structured IB internship is worth X amount of dollars while coffee-getting skills are worth Y dollars, and X>Y

"Better to remain silent and be thought a fool than to speak out and remove all doubt." --Abraham Lincoln

Dec 20, 2016

I should have gotten paid in the classroom as well, still doing work and someone is making money from it.

In a competitive marketplace firms will try their best to attract talent. This is why major banks, corporations, etc pay their interns (and usually above minimum wage). They still want to attract the best talent. Those that don't pay are likely local shops and boutiques. They can offer great experience but see no reason to pay out money to someone who likely isn't pulling their own weight yet. By forcing them to pay you are cutting off a major source of experience for college students, and contrary to what Reddit believes this will hury the middle class far more than anyone else.

Dec 20, 2016

This is actually a very interesting topic and one that is very relevant to Wall Street Oasis since we have several internship programs that are critical to our day to day. Across all of these programs, however, we try to give the interns a valuable experience and reward them through non-cash incentives (free job board access, free interview guides, letters of recommendation for the best, among other perks, etc).

Personally, we've had countless interns come back to WSO and say how much the internship helped them secure a FT offer. One of our unpaid writers was even able to land a paid position as a financial journalist after he quit his PE stint.

The point is, we've invested a TON of time and resources to try and make the prograns as valuable to the interns as possible since we know they are giving us their time. If it eventually becomes illegal to have "unpaid interns", I have to say we wouldnt start paying our interns because

#1 there is no way we could afford it and/or
#2 the amount we ask each to do individually is low, that the $s we would pay them would be a joke.

I think this ruling is relevant to companies that just take advantage and don't try to give back at all. They try to sell them something that is not true (you will "make connections", "you have a chance at getting hired FT"), and then dump them on thier ass...

In those cases, I can see how a judge would rule against the company, but in the majority of the cases, there is a lot of give and take, or both sides wouldn't even bother.

My 2 cents,
Patrick

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Dec 20, 2016

This is probably a good ruling since companies since the financial crisis have been abusing the internship system. Ten years ago when I was in college, unpaid internships at financial firms were almost unheard of and now they are ubiquitous.

A mentee of mine recently asked me if she should take an "offer" for an unpaid internship with a (unnamed) multi-billion hedge fund. I said no way. If they can't even pay you minimum wage, what makes you think they will ever hire you or value your work. She ended up finding a company that gave her a real offer for the summer.

For the arguments that the interns are paid with knowledge, what can I say. In the long run perhaps making copies could help, but in the short term you need to pay for your living expenses.

Just know that the current system is not the way it has to be. It certainly wasn't like this just a decade ago and firms are pushing the limits on getting some labor for nothing.

Dec 20, 2016

Interestingly enough, I've seen job postings which require the unpaid intern receive credits for his gig.

When you're at the point where you need to pay to work, it's gotten ridiculous. And this is only due to these sort of cases.

Dec 20, 2016

My bank did an unpaid internship (granted, it was for course credit, but the guy already had enough credits to graduate). He helped his boss out administratively in a very important way this last spring. In turn, his boss taught him all about our industry, taught him how to read bond charts, let him sit in during meetings, and gave him a great recommendation. Now he works at the Federal Reserve and has a great job and a great career path.

The question is, was this young man taken advantage of by not being paid or was the learning experience, the recommendation, and the resume build worth his investment? I never heard him complain once. Maybe it's the people who don't complain and who show up on time and do their work who know how to use the experience to their advantage. It's the people who are pennywise and pound foolish who end up nowhere.

Dec 20, 2016
DCDepository:

My bank did an unpaid internship (granted, it was for course credit, but the guy already had enough credits to graduate). He helped his boss out administratively in a very important way this last spring. In turn, his boss taught him all about our industry, taught him how to read bond charts, let him sit in during meetings, and gave him a great recommendation. Now he works at the Federal Reserve and has a great job and a great career path.

The question is, was this young man taken advantage of by not being paid or was the learning experience, the recommendation, and the resume build worth his investment? I never heard him complain once. Maybe it's the people who don't complain and who show up on time and do their work who know how to use the experience to their advantage. It's the people who are pennywise and pound foolish who end up nowhere.

Fair enough. Nevertheless, I think your bank's experience is probably the exception. If you students in college are alright with working for free for financial firms that could easily pay you, but won't, then so be it. I think it is a bit exploitative. An investment bank is not Save the Children type non profit.

I did volunteer work in college, but it was to help nonprofits helping to combat illiteracy, not a for profit corporation. This may be the way internships have progressed since the mid 2000s, but exploitative if you ask me.

Dec 20, 2016
ecuaman:
DCDepository:

My bank did an unpaid internship (granted, it was for course credit, but the guy already had enough credits to graduate). He helped his boss out administratively in a very important way this last spring. In turn, his boss taught him all about our industry, taught him how to read bond charts, let him sit in during meetings, and gave him a great recommendation. Now he works at the Federal Reserve and has a great job and a great career path.

The question is, was this young man taken advantage of by not being paid or was the learning experience, the recommendation, and the resume build worth his investment? I never heard him complain once. Maybe it's the people who don't complain and who show up on time and do their work who know how to use the experience to their advantage. It's the people who are pennywise and pound foolish who end up nowhere.

Fair enough. Nevertheless, I think your bank's experience is probably the exception. If you students in college are alright with working for free for financial firms that could easily pay you, but won't, then so be it. I think it is a bit exploitative. An investment bank is not Save the Children type non profit.

I did volunteer work in college, but it was to help nonprofits helping to combat illiteracy, not a for profit corporation. This may be the way internships have progressed since the mid 2000s, but exploitative if you ask me.

When my business partner--the intern's boss--suggested the unpaid internship I objected passionately. Personally, I would pay interns for working for me (even now after observing this program), but I also give x% of my income to charity, too. I see both as a personal choice. I walked away after 3 months of observing this internship impressed by the experience and believing that the intern's time there was mutually beneficial, even though I still would have paid him (maybe seeing his tax withholdings would teach him something, too).

To me if the market will bear unpaid internships then it's "buyer beware".

Dec 20, 2016

Get rid of unpaid internships. All this bullshit "experience inflation" is garbage anyway and a result of internship mania. Fuck that

Dec 20, 2016

I am pretty sure having the opportunity to put "Investment Banking Summer Analyst" on your resume has much higher NPV than anything they could pay you. It could be the difference between getting a FT interview or not, which in turn could be the difference between an analyst stint in IB vs PWM, which in turn could mean PE vs more PWM in a couple of years etc etc. (we all know the difference in pay between PE and PWM).

Of course, I am not saying you can't get IB without an internship (or lateral from AM/PWM) but is significantly harder (trust me, I know from personal experience :) )

Interesting article nevertheless.

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Dec 20, 2016
JMu:

I am pretty sure having the opportunity to put "Investment Banking Summer Analyst" on your resume has much higher NPV than anything they could pay you. It could be the difference between getting a FT interview or not, which in turn could be the difference between an analyst stint in IB vs PWM, which in turn could mean PE vs more PWM in a couple of years etc etc. (we all know the difference in pay between PE and PWM).

Of course, I am not saying you can't get IB without an internship (or lateral from AM/PWM) but is significantly harder (trust me, I know from personal experience :) )

Interesting article nevertheless.

Except that the places that matter pay their interns anyway, and the places that don't matter (because the cost of paying an intern at least a minimum wage apparently outweighs the cost of what they could lose in an employment lawsuit) aren't going to have the kind of reputation that makes you hirable based on the association with them

More is good, all is better

Dec 20, 2016

too bad most interns produce a net benefit of 0 and possibly even use up resources.

Dec 20, 2016

^Not true at all, interns do the formatting, presentations, and data analysis that the execs are not going to do.

Dec 20, 2016
wikileaks:

^Not true at all, interns do the formatting, presentations, and data analysis that the execs are not going to do.

True, assuming they spend absolutely no time training you.
It is often the case, that the amount of time they spend getting you up to speed outweighs the benefit you provide to them.

Dec 20, 2016

I work at a boutique, unpaid, and know how bad it can get. I make photocopies, cold call, fetch coffee, set calendar appointments. I'm a glorified assistant and sure I might have "investment banking intern" on my resume, but the subsequent points won't be of any value since it's pretty clear these guys are just using me.

It's pretty strenuous working 60 hours a week, paying for gas/parking/subway to get to work, just to learn nothing. Yes, I know, I'm going to get answers telling me to stfu because I'm an intern who doesn't know anything. But it doesn't seem like I'm going to learn anything either.

Dec 20, 2016
Semitarget:

I work at a boutique, unpaid, and know how bad it can get. I make photocopies, cold call, fetch coffee, set calendar appointments. I'm a glorified assistant and sure I might have "investment banking intern" on my resume, but the subsequent points won't be of any value since it's pretty clear these guys are just using me.

It's pretty strenuous working 60 hours a week, paying for gas/parking/subway to get to work, just to learn nothing. Yes, I know, I'm going to get answers telling me to stfu because I'm an intern who doesn't know anything. But it doesn't seem like I'm going to learn anything either.

Haha this is more or less what I'm doing, except it's just basically been coldcall type work so far. They're paying me a nominal salary though so fortunately I'll break-even when transportation is factored in.

How do we spin this kind of stuff on a resume?

Dec 20, 2016

The way I see it is that it is better to find internships that pay because then employers have a reason to put you to work and maybe train you to do some added value work. If employers don't pay you, there's absolutely no reason for them to respect you or your time.

Dec 20, 2016

I do not think there are any set rules on 'unpaid/paid' being better than eachother. I've seen guys work at MM unpaid and get awesome experience. I've seen guys work at boutique IB (paid) and get awesome experienece. It really depends on the team, the environment, and actual deal flow.

Since unpaid usually refer to boutique, most of the time, if you are working in a pure investment bank, you'll get good experience. In boutiques, there is no training program, so most of the time, the boutique gets to hire someone for $0 or minimum wage, and in re-turn get's a Dean's List, Motivated, student who is willing to do 'assistant' work. Remember investment banking is not hard per say, the intern who is spreading comps, fixing presentations, etc.., is adding value, since the VP/MDs time/$hr is far more than the bitch work.

Dec 20, 2016

the point of the article isn't "unpaid experience is always crap". It's more of a "make sure that the unpaid internship is something that benefits you instead of just exploiting you"

More is good, all is better

Dec 20, 2016
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