Milanovic on inequality (continued): implications for politics, alliances and migration

December 17, 2012

Are global value chains really the right answer for small farmers? Great new study from IIED and HIVOS

December 17, 2012

Forget swimming pools and bra hunts, it’s time for the Great Intern Debate

December 17, 2012
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It’s been a while. The issues that get a buzz going on this blog are often the internal-to-Oxfam debates, which  get Oxfamistas worked up while seeming to provoke a prurient curiosity in everyone else. Think swimming pools or bra hunts. There had been a bit of a lull on this front until I wandered unintentionally into another minefield – unpaid internships – during a recent post on how to get a job in development. Cue blizzard of comments, tweets, denunciations etc etc.

So I’ve read the comments, and Public World’s excellent briefing, and talked to those responsible in Oxfam, and here’s my take on the debate.

First, allow me a bit of self-defence. The post was intended as advice to young people trying to enter the development world as it currently

david-sipress-the-word-slave-is-so-degrading-why-don-t-we-call-you-intern-new-yorker-cartoon

is, not as it ought to be. I realize that some people may take that as an implicit endorsement of the status quo (which it isn’t), but I still refuse to advise them to boycott the intern system and so reduce their chances of eventual success.

Now, back to the interns debate. The arguments against unpaid internships are several:

  • They’re unfair, because (despite a few exceptions) they skew career progression towards those best able to work for free (middle-class kids, or people able to rely on spouses), and so introduce a class bias from the outset.
  • They impose yet more financial burdens on students already staggering under their university debts
  • By not putting a financial value on interns, they encourage sloppy or abusive management (interns making coffee, doing the photocopying etc). Abuses seem particularly bad in fashion and media – Oxfam has pretty strict guidelines to prevent this kind of thing and ensure that interns do actually get useful CV content out of their time – take a look, they’re pretty good.
  • More systemically, they normalize the use of unpaid labour, and so undermine labour rights across the workforce.

But there are several arguments for unpaid internships:

  • They’re not actually unpaid, in the broader sense that interns derive non-pecuniary benefits like skills and experience (which is, after all, why they do them)
  • They provide a great way for employers to spot strong candidates for paid jobs (indeed, they’re a much better assessment than standard job interviews – maybe all job recruitments should include a week’s work for the shortlisted candidates, to test whether what they say in the interview is true?)
  • If internships are paid, there will be fewer of them – I don’t buy the crude ‘NGOs can afford to pay’ – there is obviously some kind of elasticity of employment with respect to paying wages, the question is how great it is.

From the excellent comments, several additional issues emerged:

The role of government: Opinions differ on whether it is now harder or easier to claim benefits while interning. A lot of the commenters suggest the former, but our interns guru, Georgia Boon (herself a former Oxfam shop volunteer) thinks that for the bulk of charity volunteers, ‘claiming benefits became pretty much unrestricted under the Labour Government and hasn’t changed back’. Oxfam’s Intern Agreement includes guidance on how to claim benefits while interning, and its internship scheme tries to reflect that, for example by placing a ceiling on intern hours. Another key concern for interns is the cost of housing, and here there were some great suggestions for how we could make it easier to find cheap accommodation for interns, for example in unused university rooms over the summer.

The-Devil-Wears-Prada-Fil-008Career ladders: I think there’s a much wider problem with NGOs and career ladders. Getting onto the first rung is hard enough, but then the path up the career ladder is also really difficult – overall, I think NGOs don’t invest as much as companies and governments do in areas such as graduate entry, fast track career progression etc, so perhaps it’s not surprising that we find real difficulty recruiting for more senior positions.

Economics v Mission: Various comments pointed out that diverting £8,000 per year into paying a living wage (£8 per hour for 20 hours a week) would mean £8,000 less spent elsewhere in Oxfam’s work. That has to be true (unless we could raise extra money to pay for interns – anyone want to buy their mum an intern for Christmas rather than a goat?). But there are wider considerations about what social justice and what NGOs are doing to ‘be the change you want to see in the world’. Or if you want to put that into management speak – the reputational risk of perceived double standards. We face the same cost v reputation balancing act on carbon emissions or sourcing fair-trade products, for example.

Legal concerns: There seems to be a lot of confusion over whether not paying interns will eventually be challenged under minimum wage legislation, or conversely, whether paying them a minimum wage will confer full employment status (and so effectively abolish internships). The key seems to be ‘if it looks and feels like work’, with regular hours, having to request time off, formal appraisals etc, then at some point a judge is going to say that it is work, with all that implies.

Complicating all this is the blurred boundary between interns and volunteers. Oxfam has thousands of great volunteers running our shops, campaigning etc, who donate their time in support of our work. Interns are doing something else, usually younger, and giving their time in exchange for some hope of career development. Given the criticism heaped on internships of late, we have considered changing the name of the scheme to something like ‘project volunteers’, but the interns objected – they see internship as a useful addition to their CVs.

The upshot of all this is that I am genuinely torn. I know from watching my kids’ generation emerge from university just how hard ainternship-3 struggle it is to find a job, and to survive as an intern. But I don’t completely buy the idea that paying a minimum wage or slightly higher would transform the class composition of entry level NGO staff – the barriers to diversity are more complex and pervasive than that (when Oxfam did briefly try a graduate entry scheme a decade or so ago, the applicants were less diverse than our normal volunteer intake). And I do think that paying interns would reduce the number of internships (though I have no idea by how much). So in time honoured FP2P fashion, I will stay firmly on the fence and let you, the readers, decide (see poll, right) albeit in a non-binding sort of way. But here’s the question I want you to vote on – please read it carefully before voting:

“In pursuit of fairness and a diverse workforce, NGOs should pay a living wage to interns, even if that means fewer internships are available, and some funds are diverted from other uses.”

Over to you

and thanks to those who responded to my twitter request to send in cartoons. Winning entry so far goes to Makarand for this Dilbert classic (but keep sending in your favourites):

Intern1

21 comments

  1. You can’t get round the class problem you mentioned without paying interns. I guess Oxfam needs to decide whether the diversity of people in the aid industry is important (ie has an impact on what the aid world can achieve) or not. I don’t think the debate is so much about social justice in the UK (to me at least).

    I’d say that the current overrepresentation of people who are from fairly elite backgrounds does have consequences for the institutional culture of aid organisations, and I do think that institutional culture has a big impact on what is actually achieved in the field. I’m basing this mostly on what I’ve seen in my current posting in Bangladesh. For what it’s worth, I’d say that the people who make it out here are from more privileged backgrounds that what I encountered in Oxfam House.

    Part of the problem with this whole debate is that so much of the evidence is anecdotal. It would be really great to see a proper study on the backgrounds of people in the aid world.

  2. One part of the problem with unpaid internships is asymmetrical information.

    Organizations know whether their internships suck or not (or at last they have a better idea than prospective interns), but candidates’ have only a limited ability to “know” whether a particular unpaid internship is worth doing. Great organizations can offer terrible internships, and excellent internships can often be found in obscure organization; it’s very difficult for a prospective intern to choose efficiently.

    The result is the same as in other markets — adverse selection. Some non-trivial number of young people inadvertently accept unpaid internships that just aren’t worth their time.

    They could leave, but the transaction costs are still high. Young people have to commit fairly early to an internship, and once they do it is very difficult to swap a junk one for another. Good luck finding a better internship in mid-Spring, mid-summer, or mid-Autumn. You may really need this line on your resume, so “exit” isn’t an attractive option, but you *will not* get out of this internship what you’d expected.

    It’s like paying $10,000 for what you think is a functional used car, but it turns out to be a lemon. Once you buy it, you’re stuck with it. It may get you to and from work, so you keep it, but the $10,000 is sunk (i.e. the opportunity to do a good internship is sunk) and it’s costing you more and more in repairs (you still have to do your time with an internship if it’s something you committed to, unless you just straight up leave it, in which case that’s like having to buy a new car).

    Unpaid internships like lemons — internships that don’t offer the intern anything as valuable as the time they’re putting in — are in fact exploitative. The young person goes in there thinking they’re getting something of value (worth a wage, at least), but they’re not, so they get duped.

    But unpaid internships that *do* give you substantial non-pecuniary value in exchange for your time — experience, skills, training, connections, mentoring, references, opportunities for advancement, and so on — are wonderful. They’re a high-value added transaction. The intern gets some or all of what I just mentioned, the organization gets some cheap labor (not to mention a great screening/signalling mechanism), and there is a positive externality in the fortunate event that the organization actually improves someone’s quality of life.

    What percentage of unpaid internships are lemons, and what percentage of internships are high-value-added transactions, is an empirical question. Ideology doesn’t help much. Stories don’t help either — there are all sorts of different stories out there, you can’t just pick one and say “unpaid internships are exploitative” or “unpaid internships are great.”

    I think someone would be doing the world a service if they could get at that empirical question — how many students get snookered by crappy unpaid internships? How many students have a great experience? How many have had both, and in that case, was it worth it overall (after all, because consumers price the possibility of inadvertently buying a lemon into their decision to purchase a used car, the price of a used car goes down, even for cars that are *not* lemons).

    Also, is there a way to improve information in the market for unpaid internships? Is there anything like Yelp for interns? Is such a thing feasible, or does something like it already exist? (The cure for asymmetrical information is always more/better information…)

    There may be other problems with unpaid internships, but asymmetrical information/adverse selection is in my own (admittedly limited) experience the most serious, speaking as a former unpaid-intern-turned-Managing-Director (~1.7 yrs) myself.

  3. Thanks Duncan, and always great to see reflection on what we all do in our work – not just Oxfam, so thanks for sharing this second go.

    I tend to think diversity is good for business, whether this business is aid, or something else. This is the same argument we’re making with gender diversity in the top multinational company boards, and it’s same same argument we should make for improving our business in any sector. So it makes for better and more effective aid/development in my opinion – in the longer term. Some of us believe in diversity intrinsically as a social good but then we stall with the question of affordability, so we can’t always sustain this line of argument, and especially in times of austerity.

  4. Here is a simpler way of looking at it, which reflects back to the whole origin of Duncan’s Blog.

    The employers have the power and interns don’t. So the decision you have to make is what are you going to do with that power?

  5. It invariably results in exploitation. Unpaid internships end up with people turning into permanent unpaid volunteers. I can vouch for this problem as an intern at Bush Radio during the 80s.

  6. On the whole, I favour paying interns as that will possibly better focus whether you want one, what they are meant to be doing, and making sure they (and you) add value to the whole process.

    However, I expect it will do little or nothing to achieve greater diversity – that is a more complex question about openness of the organization and the social confidence of the applicant.

    One process I recall from the last recession – and I which I exploited to start my first organization – was a subsidy from the government to employ part time workers (at the going rate) to work on socially useful projects. I developed an environmental education organization on the back of this and a number of new graduates (including myself) gained valuable experience in managing and delivering something.

  7. Thanks for raising this Duncan.

    It’s an issue that concerns me as a staff member at a mid size NGO. Whilst I accept that getting experience is vital when you don’t have any and that people should have the chance to “try things out”, I’m a bit concerned that the NGO sector is becoming more and more structurally reliant on unpaid “volunteers”. It also worries me that as time goes by, people can’t remember what other alternatives existed. The trouble is there’s only going to be greater pressure on agencies to deliver more for less and in a more restricted fashion.

    Where I’ve worked with volunteers or more formalised internships, I’ve used strong guidelines on how much they can do, how long they can work for and ensured that they get exposure to senior staff for their personal development (and I’ve heard many people say that regular catchups with senior staff can be very useful). I think this is vital and think all NGOs should have something like this.

    One idea I’ve mused over (having done unpaid internships) is whether staff in agencies would be willing to to take a graded pay cut e.g. 0.5% up to 20k. 1% up to 40k, 2% up to 60k, 3% over 60k to fund a pool . If resources are fixed yet staff want to see a change and if it was formally recognised that pay was being diverted to ensure talented young people can get a rung on the ladder (effecitvely creating some sort of bursary fund to help pay for travel etc), I think that might be something people would consider. Or maybe I’m being hopelessly naive.

    Disclosuse: I work for WaterAid and views here are my own.

  8. “They’re not actually unpaid, in the broader sense that interns derive non-pecuniary benefits like skills and experience (which is, after all, why they do them)”

    Having done quite a few internships, I’ve never come accross one that really provided any kind of proper training. That’s a major issue.
    also is there any data on number of people with a masters degree taking on unpaid internship vs. people without any university degree?

  9. As a recent graduate of a master’s program in international development, I spent a year interning at an INGO HQ office in the US, and two summers with the INGO overseas (in two separate country offices). While I’m grateful for the experiences (which I believe led to a great job upon graduation), I think it’s important to look at the value that interns are adding to INGOs and whether their work has sufficient impact to make it worth the investment and resources required to host interns.

    In the internships mentioned above, the NGO staff were too stretched to provide sufficient training and feedback to keep me engaged. So, I spent a substantial amount of time surfing the internet or doing research that was not utilized. In addition, because these internships were short-term, there was no one there to follow through on my deliverables or recommendations after the internship ended.

    So, while I value my experiences because they were well aligned with my graduate curriculum and professional aspirations, I’m not confident that my investment or the investment of the organization contributed to furthering their mission.

    As an alternative, it would be interesting to explore the possibility of internships being more focused on job shadowing and observation, so that students/interns can build their skill set while not drawing too heavily on limited organizational/staff resources.

  10. I think that there are two elephants in the ‘internship’ room…The first is the shortage of jobs in development while universities keep educating more and more graduates; they other is that many organisations in the ‘development industry’ pretend that they are not part of an ‘industry’, but rather of something more worthwhile, charitable etc. Many labour markets also show that the transition from unpaid/volunteer etc. to full-time staff is more of a fantasy of politicians than an economic reality. I wonder whether there is actually some evidence from the ‘development industry’ (and a 3months contract/consultancy as a ‘reward’ after the internship doesn’t count!). And finally, just like in other sectors (e.g. doing a PhD in academia) there are not just the cost of paid/unpaid work, but also the loss of income. Even if the think in minimum wage terms, a 6 months fulltime internship can easily be a loss of 10-12k of income elsewhere-and many careers in development do not let you catch up that easily as salaries traditionally remain relatively modest. So unpaid internships are a bad deal. But I also think organisations need to think more outside the box: More desk-base/homebased work to reduce travel expenses and enable more flexible schedules (there are all sorts of downsides for not being physically present in the office). Being brutally honest about the chances of subsequent paid employment. In addition to providing training, dedicate staff time to career advice-even if that means helping a good intern to work for the ‘competition’. Allow time for open, reflective writing, kind of a ‘fail fare’ for interns: Tell ‘us’ what didn’t work, what you didn’t learn etc. Maybe third party (research institute, blogger etc) could collect stories as a kind of ‘ombuds person’.

  11. It’s excellent that you are launching this debate, especially as Oxfam offers both paid and unpaid internships depending on where the office is located (which is interesting as it indicates that offering unpaid internships in this case is not an ethical/pecuniary question but rather one of following the minimum standards of a country’s employment law!)… however you don’t consider the inverse ethical question, i.e. the effect internships (both UNDERpaid or unpaid) have on jobs… I have seen several examples of people’s contracts finishing and the post suddenly becoming an internship rather than a real job. This indicates either that interns are valuable (and so should be paid accordingly) or that the job in the first place could have been done by an intern! I think this also reflects the debate on low-paid women’s work that took place at the beginning of the twentieth century.. the trade unions fought for equal pay not because they were particularly concerned about women’s rights but because they didn’t want men to be replaced by a cheaper supply of labour. Perhaps we need a repeat of this interest-based fight for equality? On the whole, I agree that as an entry point internships are a useful step in the career ladder, but all too often they are no longer an ‘entry point’.

  12. I think the UK should take a look at how this works in other countries. In Germany you can hire a student assistant who is allowed to work a certain number of hours per week, at a fixed wage, for a fixed period of time. They just have to be able to prove that they are enrolled in education. The system is set up to ensure that the student’s tax and insurance status is protected; they get some pay; the employer has minimal costs beyond the salary and no long-term obligations. Legally the student assistants have to be employed for a defined task, so employers need to have thought about job content before hiring.

    In my organization we typically get quite diverse applicants, most of whom really need to earn the money to supplement their grants etc.

    Also interesting to note that these days the elite applicants who can self-fund are increasingly likely to be Indian or Latin American – so you can have an intern programme that is culturally and ethnically diverse but still highly elite.

  13. Thanks Duncan for the blog post and providing the space to debate.

    Your blog post is a good start but it ignores some fundamental things:

    First on your pro-unpaid-intern-arguments:

    – Are they really educating/training people? Or just using them as cheap labour? As Sara pointed out: many internship programmes actually fail to train! A proper contract, regulations on what work an intern is supposed to do and transparency are needed!

    – Interestingly, research in the US has shown that unpaid internships very seldomly lead to a job, while paid internships are a push up the career ledder (http://www.epi.org/blog/unpaid-internships-scourge-labor-market/#)

    – There are not enough jobs in the charity sector and entry level positions are becoming structurally erased – replaced by unpaid internships. So what is the point of offering more internship places which do not train and do not lead to a job? We do not need quantity but quality! Pay your interns, train them and help them to find a job!

    Secondly, on the point of diversity: yes you are right much more needs to be done for diversity than just paying interns. But we cannot justify this boundry by others (eg, skyrocketing tution fees)! Stopping unpaid internships is a step towards diversity we can do now.

    Lastly: Yes Ross Bailey is right there is an alternative to unpaid internships and this is called distribution. If Oxfam turely believes in its own principles it should implement a graded pay cut. Oxfams director earns over 100.000 annually! Is this justified while making interns work for free?

  14. I started my career as a unpaid intern, in the early 1990s. I’m not from the social/economic elite in the UK, although I had an elitist British university education. This is the crux of the issue – even organisations focussed on social and economic justice are unable/unwilling to break the bonds of a highly entrenched class system and promote social mobility. This whole debate is being fluffed up with arguments and counter-arguments, when at its core, everybody knows the internship system is unfair. The international development sector in the UK, almost 20 years since I had my first job, is still full of appointments of friends and friend-of-friends. And this is for paid work. It was enough for me to run away from it all. I now run a consultancy practice on the African continent, where we hire paid interns.

  15. Just looking at how the vote is going. How do you think the vote would go if you asked this question of aid donors or taxpayers ? If you think it would be different – does it matter ?

  16. I think paying interns would affect the background of the interns – eg at IPPR (who pay interns) they have found that the background of the interns they now recruit are predominantly from state schools. And they’re really good!

    So from a fairness, diversity but also a quality perspective surely paying interns is the right choice.

  17. Just a few comments to add to the debate..

    After undertaking an unpaid internship, a friend has now found a job, however as an administrative assistant, which gives him a lot less responsibility, variation in the role and skills development. He said ‘It’s like taking a step back, but at least it’s paid.’

    How is it that interns are taking on more responsibility than paid positions?

    After my personal experience as an unpaid intern, I am now feeling disillusioned. Even though I had the best team and manager, and have taken on some fantastic projects, I did find myself at times feeling worthless and exploited – especially as at points I was running the show myself! I now have some good skills and have developed professionally, but due to lack of capacity, there was a distinct absence of structure and training.

    Although I can afford it, I have now decided that I will not apply for an unpaid internship again out of principle. I have realised I am part of the problem, and by accepting unpaid internship I am adhering to the inequality that the system creates. NGO’s should not have unpaid interns as part of their business model – ‘equality’, ‘diversity’ are core values in most NGO’s. Paying interns would be one step towards actually practising these values.

    As a last note, I am currently applying to NGO internships in Brussels, the Netherlands and other EU countries, because, at least for the one’s i’ve seen, there is more chance of being paid a living wage.

  18. A US court ruling to add to the great intern debate:

    “The new precedent clarifies how employers can meet six criteria that the FLSA says make it okay to use young people as workers without pay. “If you’re going to not pay you’re interns, it’s a pretty high bar,” Turner said. The law states that unpaid internships must benefit the worker, not the employer, and should be a part of a formal training program, without replacing a paid employee’s job.”

    http://www.theatlanticwire.com/national/2013/06/black-swan-intern-ruling/66168/

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