Pay Your Interns

The controversy over unpaid internships continues to swell.

U.S. District Judge William H. Pauley III in New York recently ruled that Fox Searchlight Pictures violated minimum wage and overtime laws by failing to pay interns who worked on the 2010 movie "Black Swan."  This opens up the risk of additional lawsuits, bringing intern compensation issues top of mind.

Regardless of where you stand in the debate, unpaid internships have one key benefit for young, prospective workers: they surface truths about the practices, values and economics of the respective companies and industries. The pay scale – or unwillingness to pay anything -- is one of the most powerful signals of what a life immersed in that business would actually be like.

An unpaid internship may mean the industry has low margins and low salaries overall. No pay may also reflect a culture that is simply OK with taking advantage of free labor. No pay also may also signal low demand for fresh talent.



Conversely, paid internships signal the industry or business holds more opportunity, has a shortage of talent, and values compensating workers. These truths are important for young, prospective workers considering a specific line of work.

I’ve hired probably over a hundred interns over the past decade. I’ve made it a policy to pay them. Why? When you pay an intern, you achieve greater outcomes from both the employer and intern’s perspective. Paying means an intern will really focus his or her resources on important work. That sets expectations of results higher.

There’s one other big reason it’s important to pay interns. I was a marketing intern twice in my life -- once paid and once unpaid, while a sophomore in college. I found the unpaid internship to be demoralizing. I now think poorly of that business and the people I worked for.

Do you pay your interns? You should.

10 comments about "Pay Your Interns".
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  1. Michael Foster from OTR Global, July 9, 2013 at 2:04 p.m.

    Clearly, the growing popularity of unpaid internships is the result of a breakdown in the implicit social contract between generations. It used to be that management would accept that the younger applicant is young, possible inexperienced, and not as skilled as the older generation (this usually isn't the case, but is the perception of a biased and arrogant manager). But the thought process ended in, "screw it--let's give the kid a chance." The generation currently in power is breaking that chain, so we have David Brooks talking about an underqualified labor pool causing a spike in unemployment (despite Brooks's own ironic lack of skills in understanding econometrics or business).

    On top of that, you have a commoditization of labor driven largely by automation and the fact that companies are slowly realizing that a large part of their current, older labor pool isn't actually all that productive. They don't realize that hiring a younger generation might dramatically increase their profitability and productivity, or that younger people grew up in an era of dramatically greater complexity which makes them generally more agile and quicker to think and act on those thoughts. Instead, Millennials get squeezed.

    Of course the answer is to pay interns--but more than that. The answer is to "give the kid a chance." Those few daring employers who are doing just that are quickly realizing how a younger, faster, smarter workforce can transform their businesses and make them adapt to the fast-moving markets of today.

    The rest, on the other hand, are making up for lost revenue by getting more and more free labor from desperate young people.

  2. Paula Lynn from Who Else Unlimited, July 9, 2013 at 2:09 p.m.

    Unpaid interns have a good chance of being a thing of the past. It is not voluntary work for a non-profit (certainly not Fox Searchlight). Not being a labor attorney, I do believe it may be illegal. How did this happen ? Greed. Even a small salary, taking care of lunches and transportation may have avoided this boil. (One of the things I worked with upteen years ago. The "kids" were placed at agencies before graduation after classes. It was a 2 year school at the time.)

  3. Rick Roth from Roth Partners LLC, July 9, 2013 at 2:10 p.m.

    Always have. Always will.
    A no brainer investment in people and culture that cuts both ways.

  4. Jerry Shereshewsky from GrownUpMarketing, July 9, 2013 at 2:11 p.m.

    A million years ago (1977) I was working at McCann in Portland, Oregon and a young man came to see me (damn, I wish I could remember his name). We talked for a bit and then he said to me: "There are no intelligent reasons for you to hire me. I'm young, have no real experience and look a lot like a ton of other young folks you must be seeing. So here's a deal. I will come to work for you for 90 days FOR FREE. At the end of 90 days either hire me (and pay me my back pay) or we can walk away as friends.
    I wasn't allowed to take advantage of this incredible and ballsy deal. Corporate policy said that we had to have people insured, cleared etc. etc. So instead I just hired him. He was amazing and blew everyone's socks off. God, I wish I could remember his name. I'm certain he has had a wonderful career and life.
    As companies institutionalized the unpaid 'internship' they eliminated the even remote possibility that someone could make such an offer that I could not refuse. Just the fact that he came up with an idea like that made me sit up and take notice. I hope someone will come up with an alternative.

  5. Tiffany Tipton from N/A, July 9, 2013 at 2:14 p.m.

    This editorial has a major oversight---typically, unpaid internships are for school credit. Since the value of college credits can cost $500 per credit (with a range of higher and lower depending on the school), this is a valid form of payment. I have also worked in media, and one of my internships was unpaid/credit based, and the other was paid. I worked equally as hard in both, and got great experiences in both. A friend of mine interned at a movie studio (unpaid) and made photo copies and got coffee, but he also received three credits.
    I'm over entitled youths coming into the workforce, and expecting compensation for limited time, and inexperience. It costs time to train these individuals, and time to review the work completed, and more time to correct mistakes and discuss the mistakes. This is all for a shortened period of time, around 6-8 weeks. There are definitely extremes, but those are in the more competitive fields. There are lots of unpaid/non-credit based "internships" in the Production field, which is a highly competitive field, where it's about who you know and catching a break along with being talented. Why aren't former Def Jam interns suing? Internships are about getting experience; understanding a field, getting some first-hand experience, which can give you an edge over someone without it.

  6. Rick Monihan from None, July 9, 2013 at 2:16 p.m.

    I'm all for paying interns. That said, in my younger days if an unpaid internship were available, I'd have snapped it up. Internships aren't necessarily about getting paid. They are about gaining knowledge and experience. Oddly, students are often willing to PAY for that at colleges! It's shocking, I know, but I have a son in college and I'm actually paying for him to learn something! Can you imagine? The reality isn't one of age or knowledge or even payment. It's about the exchange of value. If I felt an unpaid internship would have helped me get a job, I'd have taken it, because in my younger days I'd have considered it a fair trade for the experience that would have helped me be more marketable.
    You do what you need to do, and if paying an intern means you get a smarter and more qualified and productive intern - then you just beat your competitor who decided to stick with unpaid interns and got what was left over. But there are no guarantees that paying will provide anything of value, this is an assumption on the part of the hiring manager. How many comapnies are currently paying an Albert Pujols or Ryan Howard, far less productive than their salaries would suggest? Suggesting that paying interns is 'fair' (what you consider fair and I consider fair may be wildly different things), or 'just' (again, different people have different views), is an attempt to guilt people into doing what WE think is right, rather than what is actually right based on the barter arrangement of skills or knowledge in exchange for pay. Do I suggest paying interns? Absolutely, it's what I would consider right. Is it necessary? Absolutely not.

  7. Ruth Barrett from, July 9, 2013 at 2:16 p.m.

    I stand with most of the folks replying to this - pay interns even more so since we are sending our graduates into the world saddled with debt. The first payment due comes shortly after graduation.

  8. Paula Lynn from Who Else Unlimited, July 9, 2013 at 8 p.m.

    You all have been speaking about interns in a form of media. Internship covers many companies. The determination of whether unpaid internships are legal will have greater outcomes. Also, internships cover a larger area - 3 hours per week or full time and what work does an intern do ? One thing for sure, it will get more complicated.

  9. Pete Austin from Fresh Relevance, July 10, 2013 at 5:25 a.m.

    We pay our interns. Why would you not? If a company gets interns to do work that's so worthless that they can't afford minimum wage, then everyone's time is being wasted.

  10. Cody H from Some big ad agency, July 10, 2013 at 7:01 p.m.

    A lot of companies really take advantage of the college credit unpaid internships. Sure, there's value to the student with those credits, but to the company that's still free labor. They don't actually have to teach anything- just sign off on the permission form. Especially within media this has become common practice, and as long as there are willing applicants I see it continuing.
    If companies won't pay interns outright, they need to think of some other form of compensation to show their interns that they matter

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