Internships are a critical part of career development, offering students hands-on experience and valuable industry connections.
Many universities encourage students to take internships, sometimes even granting academic credit for them.
However, a significant issue arises when these internships are unpaid.
While some argue that unpaid internships provide students with invaluable opportunities, others believe they exploit students, forcing them to work without compensation in exchange for “exposure.”
Additionally, educational institutions may be unintentionally enabling this practice by offering academic credit while failing to ensure fair treatment for interns.
So, are unpaid internships ethical? And are universities helping or harming students by supporting them?
How Internships Benefit Students
There’s no doubt that internships can provide real advantages, such as:
- Skill Development – Interns gain hands-on experience in their field.
- Networking Opportunities – Meeting professionals can lead to job offers.
- Resume Boost – Having an internship listed makes graduates more competitive.
In large corporations (Fortune 100 or 500 companies), internships are well-structured, typically paid, and treated as seasonal employment.
These companies recognize the legal requirement to pay interns if they are doing the work of an employee.
However, many smaller businesses, startups, and even some nonprofits offer unpaid internships, justifying it by saying the intern is receiving “valuable experience” in return. But is that really fair?
The Legal and Ethical Issues with Unpaid Internships
According to the Fair Labor Standards Act (FLSA), interns should be paid at least minimum wage if they perform work that an employee would otherwise do. Additionally, employers should withhold payroll taxes, such as Social Security and Medicare, from wages.
But some companies avoid paying interns by offering academic credit instead, assuming this makes the internship legal.
However, academic credit does not replace the requirement to pay interns, and some universities do not properly enforce labor laws when partnering with businesses for internship programs.
Two Sides of the Debate
- Internships Are Ethical Because Students Benefit
- Students gain skills, networking, and career advancement opportunities.
- The experience is worth more than the wages they would have earned.
- Employers invest time in training interns, which is valuable in itself.
- Internships Are Unethical Because They Exploit Students
- Interns perform real work but don’t get paid.
- Many students can’t afford to work unpaid, creating an unfair advantage for wealthier students.
- Companies could pay interns but choose not to, even though they benefit from the intern’s labor.
This creates an economic barrier where only students who can afford to work unpaid gain access to valuable career opportunities, leaving lower-income students at a disadvantage.
Are Universities Part of the Problem?
Many universities grant academic credit for internships, which legitimizes unpaid work and allows companies to avoid paying interns. While some universities educate employers on labor laws, others fail to ensure companies follow ethical hiring practices.
Ways Universities Can Make Internships Fairer:
- Ensure companies pay interns unless the internship is strictly observational.
- Offer stipends or scholarships to students who must take unpaid internships.
- Limit academic credit for unpaid internships and encourage businesses to provide compensation.
Final Thoughts: Should Unpaid Internships Exist?
Internships can be a great learning experience, but they should not be a way for businesses to get free labor. If a company benefits from an intern’s work, it should pay them fairly.
Universities also need to do their part by ensuring that internship programs follow legal and ethical guidelines. Otherwise, they risk perpetuating a system that disadvantages students while benefiting businesses.
What do you think? Should unpaid internships be allowed, or should all interns be paid for their work? Join the discussion at TheBusinessProfessor.com!