Will Student Stipends Hurt Employment?

26 Jun
student interns

Are student interns hurting the job market?
Image: Shutterstock

Summer internships for college students are seen as essential for resume building among most college students, whether they can afford it or not.  As colleges come under increasing criticism about the disconnect between earning a degree and finding a job, most institutions are hungry for any employer willing to help students build professional skills and experience.  Some Universities are even paying employers as rich as General Motors to let students do work that companies need done without paying for the work at all, or paying only half the wage.

Of course, this practice makes the university look good and students love the allowance for being able to gain what they consider valuable work experience.  However, in a time of cutbacks, layoffs and high unemployment, many firms are dancing along the edge of federal labor laws, which require that unpaid internships to do not provide immediate financial benefit for the company.  As most companies are operating at a bare bones employment structure, most unpaid interns would likely be beneficial.  However, the number of students willing to work for free in exchange for the resume bullet has only increased, as competition for jobs becomes more intense.  Some students are even willing to do work that is unrelated to their field of study just to get the experience.

Some students, however, are lashing out.  Several lawsuits have been filed, specifically in the entertainment industry, against employers that are not willing to pay for assistance from students.  It is difficult to determine whether the practice of unpaid internships is beneficial.  On one hand, many students are willing to do work they consider valuable for free.  Universities need better relationships with employers, and many employers need a future workforce with practical skills.  However, it may be dangerous to the economy if employers are not held accountable for respecting the value of a strong labor force because they take any free labor they can get.  How likely is a firm to hire a new employee, after all, when they can get a constant stream of desperate job seekers at no cost?

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