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Fast Pitch: When do internships become ‘bought?’

February 14, 2011

This weekend, a contentious debate over internships and their effect on social mobility was revived in the UK, when it was revealed that the conservative Tories – the party helmed by Prime Minister David Cameron – sold off high-profile finance internships at institutions connected with the City of London for an average of about £3,000 ($4,800) at an annual political fundraiser. Many of the attending families were already part of Great Britain’s social elite.

That revelation was particularly offensive to regular critics of the modern internship system, who argue that one’s financial ability to do unpaid work already determines whether or not they can “buy access' to great connections the most prestigious careers.

David Cameron's Conservative party came under fire this weekend after it was revealed that a fundraiser sold internships to wealthy families. (Credit: British National Archives)

In the United States, the Obama Administration signaled its opposition to unpaid internships last April, when new Labor Department regulations made the vast majority of them illegal. (You can read Mark Cuban’s rant about this in one of our “Breakfast Debate' posts from last week.) Of course, these new regulations have rarely been enforced. Unpaid internships are still twice as prevalent as paid ones on, and perhaps higher in the employment pool at large.

At first glance, this might seem to be purely a question of government regulation – whether employers should be forced to make their internships accessible to people regardless of income. Few would argue that enforcing a ban on unpaid internships wouldn’t place immediate financial strain on businesses at a bad time, knowing the degree to which they’ve been relied upon during the current recession. And, as Cuban and others have argued, earning valuable experience for no pay is better than sitting on a couch for no pay.

But democratizing access to prestigious internships may be in the best interest of the employers themselves – and some companies who pay good money for their interns appear to subscribe to that logic.

Still, it’s a relatively rare sentiment. So that begs the question: Are the students getting footholds at America’s most influential institutions really our best and brightest? Or, by allowing sales and auctions of their internship positions – or, to a lesser extent, soliciting unpaid ones – are employers sacrificing their ability to compete in the future to make their margins today?

What do you think? Let us know where you stand on this tricky issue in the comments below.