It’s that time of year again. College seniors are getting measured for their gowns and scrambling to find hotels for their families on graduation weekend. College graduation is cause for celebration, but it also always brings unknowns, challenges and anxieties. This year, though, the anxieties will be higher than they were a generation ago. Our graduates are entering a workforce that doesn’t value them and doesn’t want to pay them either.
You’ve likely read one of the many pieces floating around that grouses about the lazy, self-involved and insubordinate millennial worker. Maybe you have even read a piece or two about how current economic challenges disproportionately affect millennials aged 21-37. But were you aware of how many college graduates are poised to work for free to “advance” their career goals?
As Ross Perlin documents in his book "Intern Nation," the unpaid internship has been on the rise since the economic crisis of 2008. During that time, internships for college students ballooned. While certain industries, like entertainment, had a long history of relying on unpaid interns, the practice of the unpaid internship metastasized into a range of new career paths. To give you a sense of the scale, 97 percent of large corporations hired interns in 2014. Around half of them didn’t get paid.
For some of us, the notion that our corporate culture seized on the economic crisis of 2008 to find ways to avoid paying young people doesn’t come as much of a surprise. But the part of the story that hasn’t gotten enough attention — nor enough outrage — is the role that institutions of higher education have played in the scheme. Consider this racket: Colleges charge students for internship credits, which are required in a range of majors and graduate degrees. The student then works an internship, which is often unpaid, but still has to pay their institution to get the credit needed to graduate.
They literally pay for the privilege to work for free.
According to Perlin, the number of internships each year in the United States is between 1-2 million, and around 75 percent of undergraduates at four-year colleges and universities now take at least one internship before they graduate. But it’s gotten worse. We now see students taking unpaid work even after they graduate.
Before I run down more details on this crisis, I want to underscore the fact that the real problem here is ideological. The idea of working for free should bother us. The idea that young people aren’t valued for their work should bother us. The idea that a recent graduate should expect to live at home while “volunteering” for an NGO in order to kickstart their career should bother us.
But somehow, since the 1990s, when internships were rare, we have collectively accepted that this sort of unpaid apprentice system makes sense. We have accepted the idea that the labor of young people isn’t of value. And rather than fight to defend their rights as workers, we have generally maligned them for being lazy, entitled basement dwellers. It has been our apathetic response to these shifts in labor practices for young people that explain why we are seeing unpaid work spread beyond college summers to after graduation.
By almost every metric, the data suggests that our current graduates are more likely to work for free, more likely to take underpaid jobs, more likely to be stuck in part-time positions and more likely to work in jobs that don’t help them begin a viable career track than before the recession. Even when the numbers tick a bit more favorably, the trends are still clear that for the last two decades unemployment and underemployment have plagued our nation’s young at a disproportionate rate to the workforce overall.
Unpaid work is going mainstream
The critical point that has to be underscored is that the problem is not the internship; it is the lack of pay for it. Perlin reports that close to half of all internships are unpaid: 57 percent of non-profit internships, 47 percent of government internships, and 34 percent of for-profit internships are unpaid. He further notes that 18 percent of internships involve neither pay nor academic credit. It’s almost certain that these are illegal situations, and many of these positions may well be going to students who have already graduated and hold degrees.
Despite astonishing levels of corporate profit since the economic recovery, the number of unpaid internships is increasing much faster than paid internships, which could disappear altogether in some industries. Perlin notes that only 11 percent of interns in the field of game design are now paid, and under 16 percent of interns in law enforcement and security.
While there is clear evidence that internships themselves can be a valuable source of experience, when they are unpaid there are limited, if any, benefits. Students with paid internships are far more likely to receive a job offer after graduation than those who work unpaid. Only 39.5 percent of students who had unpaid internships received a job offer. That number was only slightly higher than the offer rate for students with no internship experience at all (38.6 percent).
To make it even harder to understand not paying interns, the real value of minimum wage is well below the level of the 1960s, making it extremely affordable. Yet the trend is not even to pay them that.
Unpaid and underpaid work is creeping
Unpaid and underpaid work is not just an acceptable idea and common practice; it is also spreading its reach. Interns are now in virtually every industry, and we find interns of all ages. There have been sharp increases in the numbers of high school, recent college graduate, and even middle-aged and retirement-age interns.
A recent scandal broke out when Southern Illinois University advertised for “volunteer adjuncts.” You know unpaid work is creeping when one of the lowest-paid skilled jobs — that of adjunct teaching — is trying to morph into work for free.
One area of significant concern is the way unpaid work for college graduates has increased as a common practice. As I’ll explain below, getting this data is near impossible because neither college career service offices nor employers want to admit the extent of it. In fact, most data on college graduates considers unpaid internships “employment,” thus completely skewing outcomes.
In 2016, young college graduates had an unemployment rate of 5.6 percent (compared with 5.5 percent in 2007), and an underemployment rate of 12.6 percent (compared with 9.6 percent in 2007), but these numbers don’t include those who worked for free while on fellowships, training, volunteering, etc.
Underpaid jobs are also on the rise for college grads. These are part-time jobs or jobs that don’t require a college degree. As the Economic Policy Institute reports, “The high share of unemployed and underemployed young college graduates and the share of employed young college graduates working in jobs that do not require a college degree underscore that the current unemployment crisis among young workers did not arise because today’s young adults lack the right education or skills.”
The critical reality is that young college graduates are increasingly facing diminished job quality. Wages for employed college graduates have declined in the last decade, and the bottom 50 percent of employed college grads have lower wages than they did in 2000 or 2007.
And, if they are paid, they may not have benefits. Working college graduates’ pension coverage fell from 41.5 percent in 2000 to 29.4 percent in 2014.
Campus career services are largely complicit
Perhaps the most disturbing part of this story is the fact that college campuses haven’t just been collecting college credit while sending off their students to work for free; they have also used these same sorts of so-called jobs to inflate the placement statistics of their graduates.
Tracking placement data has become a critical practice across college campuses, and it is a central feature of college recruiting. Touting excellent placement outcomes, schools draw incoming students to their programs. Because students are painfully aware of the cost of their education, deciding on programs is increasingly tied to reports of placement success.
But here’s the catch. Most career services offices don’t distinguish between types of placements. They bundle part-time, unpaid and paid work together into one number. They further skew their data when they leave out those students who don’t respond to their queries about their job outcomes — most of whom are likely out of work and thus not excited to report their status.
In researching this piece, I contacted the placement offices of six major universities and asked if they could break down their placement numbers to separate unpaid, part-time, paid and paid with benefits numbers. None of them did.
To make it worse, placement officers have gotten themselves caught up in a slippery rhetoric that brands unpaid work as “opportunities” and catastrophic working conditions as “placements.” The National Association of Colleges and Employers, one of the few entities to track this data across a range of institutions, recently decided to game the rhetoric even more. Rather than refer to placement, they now track what they call the “career outcome rate,” which is the percentage of graduates who are engaged in a range of activities they define as leading to a career. That number includes all sorts of unlivable wage scenarios.
When I interviewed Perlin for this story, he explained that when the economy tightened for college students, unpaid internships, fellowships and other underpaid work “felt like one of the only things career centers could offer.” Fair enough, but the notion that these career centers have the students’ interests first in mind is belied by the fact that they are reluctant to be honest and straightforward about the realistic range of outcomes awaiting their graduates.
Clearly there needs to be across the board standards on how these numbers are reported, especially when students are drawn to programs that boast of 97 percent placement, only to later find out that a substantial percent of those placements don't carry a livable wage. At a minimum, incoming students should be given far more detail on placements, details that include wages, benefits and a breakdown of types of jobs.
Wage inequality is getting worse
One consequence of this wage warfare on college graduates is growing intergenerational inequality. The data reflecting reduced economic opportunity and reduced accumulation of wealth for the young is staggering. Lawrence Yun writes in Forbes that, as of 2013, the wealth difference between the young and the old opened up to over 20-to-1. The net worth of the older generation has risen while that of the younger generation has fallen: $210,500 versus $10,500. His estimate for 2015 was even wider: $250,000 to $10,000.
In 2014, for the first time, more 18-34-year-olds lived at home with their parents than in any other arrangement, according to a study by the Pew Research Center.
Young people can’t buy homes, can’t afford kids and don’t buy cars. But more importantly, the long-term effects of losing living wages in the early years after graduation are substantial.
And the groups that are hit the hardest are those that are already less economically privileged because unpaid and underpaid work exacerbates existing social divisions.
On the one hand, there are the examples of the privileged white kids who can afford to take plum unpaid positions to advance their careers and network. There is no better example of this than the notorious white intern pic Senator Paul Ryan posted.
On the other hand, we have the fact that, according to Perlin, 77 percent of unpaid internships are held by women and most unpaid interns are from low- and middle-income families.
Right out of college, young male college graduates are paid more than their female peers. This gap has widened not only over the past several decades but also over the past few years. In 1990 and 2000, young female college graduates earned 92 cents for every dollar their male counterparts made. In 2016, they earned just 79 cents on the dollar, down from 84 cents per dollar in 2015.
Young black college graduates earn even less and face more unemployment and underemployment. Black college graduates have an unemployment rate of 9.4 percent, which is higher than the peak unemployment rate for young white college graduates during the recession (9.0 percent). The share of young black and Hispanic graduates who remain unemployed and not enrolled in further schooling is substantially higher than that of white graduates.
So before we snap photos next to the college mascot and cheer as our graduates toss their caps into the air, we should take stock of the stark economic reality these students face, which we’ve allowed to greet them. Using the recession as our excuse and neoliberal ideology as our logic, we have framed a narrative that suggests that graduates can pursue careers yet not be compensated. If we want our graduation celebrations to be more than hollow rituals, we need to start working to make sure that college commencement actually leads to a real beginning.
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