To all the current students out there hoping to be able to learn on the job about your chosen career – the current interns are looking to pull the rug out from under you.

http://moneyland.time.com/2012/05/02/the-beginning-of-the-end-of-the-unpaid-internship-as-we-know-it

This unpaid internship phenomenon is, in my opinion, just another symptom of the student loan fiasco we have right now. We are way over-subsidizing kids to get college education so we are creating excess supply where no demand exists. So these kids come out with degree in Art or Art History and when they find that their dreams of being offered a job as a curator at a museum are not realized they accept a job as an unpaid intern because it seems more respectable than just serving coffee at Starbucks. But the problem is there is literally no market demand for marginal museum curators out there and the only demand out there for people with Art History degrees is for coffee servers. So, these people go into denial or become ashamed. Instead of facing up to the fact that nobody wants to pay them for what they want to do, they offer to do unskilled labor for free in exchange for being able to project the image that they are “connected to the industry.” But, there is seriously no demand for labor in their industry. That is why they are doing unskilled labor. I mean, look at the jobs the girl in the article was doing:

“It was disgusting,” says Wang, referring to her unpaid daily responsibilities like shipping hats between New York and London for $350 each way

She is doing the job of a high-school dropout and this was her seventh internship! She clearly was too embarrassed to come to grips that no “respectable” career demanded her skills. I really think that this phenomenon is happening more and more. As Alex Tabarrok has pointed out:

Over the past 25 years the total number of students in college has increased by about 50 percent. But the number of students graduating with degrees in science, technology, engineering and math (the so-called STEM fields) has remained more or less constant.

So, obviously, we are generating a lot of intelligent, hard-working young people with expectations of fulfilling, lucrative careers that are in for a rude awakening.

I think these unpaid internships are the stepping stone from graduation to Starbucks. It allows everyone involved to save face.

Dinner party conversation:

“So, I hear your daughter Melanie graduated from NYU a couple of years ago. What’s she up to these days?”

“That’s right, she is working at InStyle Magazine in the Downtown area.”

“Wow! That’s so great! What was her major again?”

“Journalism with a minor in fashion design.”

“Well, it sure looks like she is on her way. I’m so happy for her.”

“Thank you so much. We certainly are proud of her.”

Meanwhile, Melanie has an unpaid “internship” with InStyle sending FedEx packages and carrying coffee cups doing nothing to gain real experience in her preferred career. But, Melanie can tell her friends that she works “downtown” and her parents can tell their friends that she is “working in the industry.” Meanwhile, the student loans still aren’t getting paid and everyone is scared to death that all of those loans didn’t buy them anything. What’s worse, is with their intellect and record of achievement, everyone expects them to be “making something of themselves.” There is a whole troop of kids out there in the predicament right now. HBO just started a series about them. Tyler Cowen says that this is what happens when “your IQ is high but the shadow value of your labor is low.” I really feel for these kids. The system (the government, their parents, their high school teachers, everyone) has been telling them that a college education is valuable and worth going into debt for (the government is even encouraging them to) and by the time they find out that it isn’t, they are stuck with a crushing debt that they can’t discharge. I am sympathetic to their plight, however I am less enthused with their attempts to charge it off on me via debt forgiveness or lawsuits over unpaid internships.