In May, Prime Minister Stephen Harper’s conservative federal government announced the implementation of a new $40 million plan to create 3,000 paid internships in the fields of science, technology, engineering, and mathematics (STEM). Three thousand paid internships pales in comparison to the estimated 300,000 unpaid internships in Canada today. The new program hardly addresses the urgent underemployment problem facing young Canadians, U of T students included. Any comprehensive plan to combat youth underemployment in Canada should focus on enforcing the country’s current labour laws, rather than creating new positions, if it is to have a meaningful impact.
The existing procedure on interns in Ontario as it relates to the provincial Employment Standards Act (ESA) is very specific in its delineation of when interns are entitled to financial compensation for their work. Much of this regulation pertains to on-the-job training. Under the ESA, an intern is also considered an employee unless all of six conditions are met: the training is similar to that which is received at school, the training benefits the intern, the employer derives little benefit during training, the training does not replace someone else’s job, the employer does not promise a job at the end of training, and the intern is not told he or she will be paid.
Many unpaid internships may be breaking the labour laws, but the government is reluctant to enforce them. As Harper has acknowledged when asked about the issue, the federal government does not want to meddle in the marketplace. Such lapses have led to serious abuses in the market, such as unpaid work from home.
Two arguments are often evoked to defend unpaid internships. The first claims that internships can represent more of a cost to employers than they do a benefit. This is because the time and work another employee is often required to dedicate to supervising and training interns can be costly. This argument seems to make sense until you start to crunch some numbers.
Suppose an employee contributes at least as much to a business as he or she receives back in wages. Then, for a three-month internship, at 40 hours a week and a minimum wage of $11 an hour, an intern should contribute at least $5,720 worth of work to the business. The Canadian Federation of Independent Business estimates the average yearly cost of informal training for an entry-level employee with no experience at $3,916, so $979 for three months. In many circumstances, interns produce more value for businesses than they receive in return.
Perhaps a more compelling argument is that interns can gain valuable work experience and connections in return for supplying free labour. This argument justifies the existence of internships but not necessarily that of unpaid internships. According to a 2013 survey by the U.S. National Association of Colleges and Employers, 63.1 per cent of paid interns receive a job offer after graduation, compared to 37 per cent for unpaid interns, and 35.2 per cent for those who haven’t interned at all. Paid interns also start with higher median salaries after graduation, at $51,930, compared to $35,721 for unpaid interns and $37,087 for those with no experience.
Furthermore, underlying that argument is the assumption that internships that are currently unpaid will disappear altogether if they have to be paid. This seems unlikely; it is hard to believe that the work that interns do is not essential to businesses. Each business will certainly have incentive to reduce the number of interns they take in, and reevaluate how interns are used. However, this increased efficiency may not actually be a bad thing.
If a total ban on unpaid internships risks backlash from business owners, alternative solutions are available. The government could fund programs that name and shame abusive unpaid internship programs. Statistics Canada could start tracking unpaid internships to increase our understanding of the issues unpaid internships pose. Negative statistics such as the ones cited above will surely help to reduce the number of predatory internship programs. Other statistics — such as the fact that 40 per cent of General Electric Toronto’s entry-level employees started out as interns — will weed out deceitful employers, while protecting honest ones.
Unpaid internships are among the top concerns for young Canadians. Neither laissez-faire attitudes nor the creation of new paid internship programs can address the scale of this problem. Only stronger enforcement of labour laws coupled with creative solutions can help young Canadians get the first work experiences they need.
Li Pan is a third-year student at Trinity College studying mathematics and economics.