The Buzz

Interns and the Squeeze on Young Workers

The periodic national debate on unpaid intern labor is back in full swing. It started several weeks ago with an article in the radical journal Dissent, which suggested that internships are just one part of an increasingly contingent labor market, one where chances to work are so rare that even unpaid workers should express thankfulness

for whatever work opportunities they may have, no matter how unfruitful. No task should be too unpleasant and no job too much of an imposition for someone just happy to have the chance to work. It’s not enough to recognize one’s gratefulness for actually having a job. The key is in showing it. “Thank you for this opportunity,” runs the mantra.

In the current terrible economy, that’s a good attitude to have—if you’re being paid. Yet as one ex-intern told the writer, “No one would expect someone to go into a factory and work six months for free. People understand that automatically as labor.” Washingtonian homes in on the point:

“People my age expect to start at the bottom, but in this economy the bottom keeps getting lower and lower.” . . . Maybe [the intern] is fortunate to be earning $4.35 an hour at her ivory-tower job while she works nights and weekends as a waitress. Maybe a ten-month paid internship followed by graduate school and then perhaps another internship is the new lucky, particularly at a time when so many young people can’t find work at all.

It then declares this “The Age of the Permanent Intern,” noting that it’s becoming increasingly normal for young workers to have several internships serially, with none leading to employment. Yet (unlike Dissent) Washingtonian examines the subtleties of the rise of the internship. Many of the fields that attract large numbers of interns are highly desirable—policy, advocacy, fashion, publishing, etc.—yet do not produce enough value to sustain large numbers of employees. Job openings are hard to come by and attract hundreds of applicants, so a leg up on the competition—even one that requires working for free—is crucial. When an education system and culture that encourages young people to follow their dreams meets a fragile economy, it’s natural to have an oversupply of people in attractive fields.

And that’s where the rub is. Interning isn’t slavery. It’s a voluntary transaction, and any economist will tell you that voluntary transactions indicate both sides see something of value in the swap. If interning were as awful and exploitative as some suggest, only fools would do it. The return on value on the internship has simply declined in parallel with the rest of the labor market.

The rise of the internship is thus not a disease, but a symptom. Young people are being squeezed on all sides by the faltering economy. Entry-level openings are rare. Education is rapidly growing more expensive, yet it’s becoming less of a career accelerant and more of a career necessity. Universities and lenders now have more leverage, allowing them to capture a bigger share of students’ future earnings in the form of tuition and debt. For those lucky enough to find a permanent position, the picture remains grim—rising healthcare costs fall heavily on young workers, further threatening their ability to repay their debts and start families. 

The rise of the serial intern and the pressure on young workers is a product of something that few are ready to acknowledge. The American class structure is shifting. The decades after World War II saw prosperity and a state-funded expansion of college education and homeownership that gave upward mobility a huge boost. That era quickly ended. Hourly earnings hit a high in 1972, and then slowed. Next came saving, which peaked in 1982. Finally, the housing bubble burst in 2008, taking lots of middle-class wealth with it. Now the middle class itself is shrinking, and average wages are at 1969 levels in real terms.

We may be experiencing the last days of a bubble: not an education bubble or a real estate bubble, but a class bubble. The lack of jobs for the middle class and the inflation of the college degrees that anchor it might be a sign that it is too big, and is about to split in two. With this trend having been decades in the making, it’s not likely that any amount of government effort can arrest it. One thing is certain, though: the fracturing of the middle class will poison our politics and our culture.