Some companies would rather get rid of interns than pay them

So long, unpaid internships.
So long, unpaid internships.
Image: AP Photo/HBO, JoJo Whilden
We may earn a commission from links on this page.

While US companies revved up full-time job creation in April, they are hiring 3.4% fewer interns this summer than in 2013, according to a new survey from the National Association of Colleges and Employers (NACE).

The cutbacks came in the form of fewer internships aimed at students earning associate’s, master’s and PhD degrees. NACE noted that the US manufacturing sector also planned to cut internships this year by as much as 34%, while the computer and electronics sector also trimmed substantially.

NACE surveys employers with paid and unpaid internships, and its research from 2013 showed unpaid ones are found almost as often in business as in the nonprofit sector.

About 8% of employers that previously had interns decided not to hire any this year, according to a Michigan State University recruiting report based on surveying 2,300 employers. “I’ve seen a leveling off” in intern hiring after rapid increases in internships at startups and mid-sized companies in the last decade, says Philip Gardner, director of MSU’s Collegiate Employment Research Institute.

Agrees Lauren Berger, who runs the Intern Queen job and advice site: “I’m hearing more questions, more hesitation before starting an internship program and bringing students on.”

“It’s possible that employers are scared” of lawsuits brought by unpaid interns at several companies, says Kenneth Tsang, a research associate at the National Association of Colleges and Employers. They also may be sitting out this season, waiting for a definitive court ruling on internships. Dozens of companies have canceled unpaid internship programs, amid a growing number of lawsuits brought by former free staff.

But Tsang sees two other possible explanations for the decline in internships—both financial choices.

The acceptance rate on internships hit a six-year low, at 79%, he noted, as internship wages have been essentially unchanged for three years. So some students may have decided that they can make more money bartending than working as an intern.