Pros and Cons of Unpaid Internships

College internships are becoming increasingly important for US job seekers. Yet, only 60% of internships in the United States offer compensation. That means four in ten interns work without pay.

Internships haven't always been unpaid. The loophole in the Fair Labor Standards Act allowing for unpaid internships didn't come about until the 1940s. Unpaid internships didn't become commonplace until the 1970s.

With so many college graduates, employers have the leverage to demand unpaid work. At the same time, internships are absolutely critical to landing a job after graduation, especially if you want to work in a competitive field.

So, should you take an unpaid internship? Or are you better off holding out for a paid opportunity? Keep reading this guide to the pros and cons of unpaid internships to find out.

What Is an Unpaid Internship?

Internships are professional experiences offering training to college students and recent college graduates. There are internships available for graduate students, too.

There are two types of internships. Paid internships compensate interns for their work, whether with wages, stipends, or college credit. Unpaid internships do not provide any form of compensation for the intern's work.

By now, you may be wondering: how is it legal for interns to work for free? The Supreme Court made a ruling in 1947 that legalized unpaid work in certain situations. This ruling is the precedent for legal unpaid internships today.

For an unpaid internship to be legal, it must meet the following six criteria:

1. The internship's training is educational in nature
2. The intern directly benefits from the unpaid work
3. The employer does not directly benefit from the intern's work
4. The intern is a supplement to and not a replacement of paid employees
5. The internship does not guarantee employment with the employer
6. The intern consents to providing work without pay

Even if you do not receive compensation for your work, you will still get training and education. For many prospective interns, that is enough to justify the lack of pay.

What Are the Pros and Cons of Unpaid Internships?

Are you considering applying to an internship that does not offer compensation?

Below, we will guide you through the advantages and disadvantages of taking unpaid college intern work to help inform your decision.

Pro: Get Invaluable Experience

Students with internship experience get 26.3% more interview requests, 16% more job offers, and 12% higher salaries than their less experienced peers. And these statistics apply whether the internship is paid or unpaid.

As you can see, the main reason to do an internship is for career advancement. These days, many employers will not even consider applicants who do not have some type of work experience.

Even more importantly, some paid internships require internship experience to apply. An unpaid opportunity may be exactly what you need to get your foot in the door for the internship you really want to land.

Con: You Pay for Unpaid Experience

Unpaid internships don't just not compensate interns. They may actually end up costing you to do the internship. You still have to pay for housing, food, and other expenses while you work for free.

The financial stress of getting unpaid experience is not worth it for many. Others are forced to live at home or dig into their savings to afford an unpaid internship. If that won't work for you, look for a paid opportunity instead.

Pro: Networking Opportunities Abound

The age-old adage "it's not what you know, it's who you know" holds now more than ever. And networking with just anyone isn't enough. You need to meet professionals within your industry.

An internship is an amazing way to do just that. Strive to make a good impression on your bosses and colleagues. You never know when the right recommendation could be all you need to get your foot in the door.

Unpaid internships are no different. Working hard and showing off your problem-solving skills is the best way to impress. Just make sure to weigh your time and effort against the fact that you aren't getting paid.

Con: You Will Not Receive Benefits

As an unpaid intern, you are not an employee of the company you intern for. You do not get to enjoy the perks of full-time employment. That means no paid time off, no health insurance, and no 401k (unless you invest in one yourself).

Paid interns, on the other hand, may receive employee benefits. However, it depends on how many hours the intern works, the employer's headcount, and the laws in the state where the employer's company operates.

Pro: Trial Run Your Future Career

Are you stuck between two different career paths? There is no better way to try out different jobs than with an internship. Internships offer a sneak peek into how your daily life would be working in your ideal field(s).

Yet, paid internships can put on pressure. You may feel obligated to perform well since your employer is compensating you. If you end up getting a job offer, this can complicate feelings even more.

With an unpaid internship, there are no obligations. There should never be any pressure on you to perform. That way, you can explore the career paths you have an interest in before making a decision that will impact your life.

Con: You Could Reduce Your Earning Potential

Getting any type of internship may be better for your future income than not doing an internship at all. At the same time, working an unpaid opportunity can be a detriment to your future earnings, too.

On average, paid interns earn $50,000–$55,000 per year after graduation. The average unpaid intern earns $5,000–$15,000 less. That can feel like a major slap in the face after having done free work for your internship already.

Pro: Face Less Competition

Unpaid internships are much less competitive. They are becoming increasingly common these days, meaning there is more supply. Fewer college students and recent grads are looking for unpaid opportunities, too.

Additionally, employers are more likely to respond to unpaid internship opportunities. This is especially common among small businesses. They often need you more than you need them.

Smaller companies may not have the budget to pay you. But they may still be good options. These employers often try to make up for the lack of compensation with more hands-on experience and less grunt work.

Top Tips for Landing Paid Internships

Have you decided that an unpaid internship is not for you? If so, we want to help you land the paid opportunity of your dreams. Here are our top tips for doing just that.

Understand Which Industries Pay Interns

Some sectors tend to pay their interns more often than others. For example, technology, consulting, and finance tend to offer paid opportunities. And according to Glassdoor, 9 in 10 high-paying interns work for tech companies.

Start Looking for Internships Early

If you start applying for summer internships at the end of the school year, you are already behind. Strong applicants start applying as early as the fall of the previous year. Internship recruiters tend to be most active during this time.

Know Where to Look

59.4% of students who did not undergo an internship cited not knowing how to find opportunities as a major barrier to entry. If that sounds like you, check out our guide to finding internship opportunities.

Apply for Multiple Opportunities

You may have your sights set on a single company or role. But if you want a paid opportunity, it may be better to cast a wide net. Apply for multiple opportunities to increase your chances of landing a paid experience.

Get Unpaid Internship Experience

As mentioned, some of the most competitive internships want applicants to have experience already. An unpaid internship may be just the experience you need if you can not find paid work in your field elsewhere.

Leverage Your Network

Alumni, personal contacts, and even social media can help you land the internship you want most. Yet, many college students do not have a robust enough network to leverage.

At Honor Society, we can connect you with a nationwide network of hard-working individuals like yourself. We can help you connect with professionals in your industry and work opportunities you will love.

Need Help Landing Your Dream Internship?

Unpaid internships may not be ideal for every student. Yet, the experience and training these experiences offer are valuable. Working without compensation may be just what you need to get a paid opportunity down the line.

Do you need help getting the internship of your dreams? Honor Society is a national membership group for high achievers like you. Join our society today to gain access to educational resources, our professional network, and more!