Published May 15, 2017|4 min read
If you were clicking around the internet over the past few weeks, you might have seen a story that was a variation of this Washington Post headline:
Here’s the gist: Glassdoor looked at the reported salaries of interns at companies across the country and ranked them according to pay. The companies themselves weren’t a huge surprise; there were a lot of tech companies and a lot of household brands.
What made those sensationalist headlines, though, were the incomes. Glassdoor reported that the top 25 companies median internship salaries of $4,500 a month. Extrapolated over a whole year, that’s $54,000—more than the median salary of U.S. workers.
The top three companies were:
Facebook – $8,000/month
Microsoft – $7,100/month
ExxonMobil – $6,500/month
That’s a lot of money. But it’s not any sort of scandal that should outrage people.
Part of the concern over this intern pay is that...they’re getting paid.
When most people think internships, they think a college student or recent grad at the bottom of the totem pole earning their due. Well, not really earning because we also think of internships as being unpaid.
But there’s really no reason internship should be unpaid other than that they’ve historically been unpaid. Companies benefit from unpaid labor for obvious reasons, but the interns don’t. Surveys have shown that paid internships help college students land jobs, while those who take unpaid internships have little advantage over people who didn’t intern at all. What’s more, starting salaries for students with paid internships were over $15,000 higher than for those who took unpaid internships.
Paid internships are better for students, and Glassdoor’s survey shows that the companies may be better for the interns, too.
Back to that classic intern archetype: Besides being unpaid, we often think of them as coffee fetchers or copy machine masters.
That doesn’t seem to be the case here, if the internship reviews on Glassdoor are anything to go by. Facebook’s internship program was ranked #1 on the site two years in a row; Microsoft reviews are full of words like "potential," "impact," "benefits," and statements that "Microsoft definitely takes care of its employees, including interns"; ExxonMobil’s intern program covers "virtually all aspects of the engineering and the economist work: process simulation, safety studies, monitoring software, economic studies, etc."
And for each of these top three companies, the average Glassdoor review score from interns was equal or higher to those from full- and part-time workers:
For these companies, internships are an investment in their future, not just in a financial sense by paying them but by offering them real experience. Interns contribute to the company and enjoy being there. Facebook isn’t paying an intern eight grand a month to make copies.
So now we’re breaking away from the stereotypical intern; we accept that they should be paid, and that they’re doing real work.
Plus, considering where these internships are taking place – the companies, fields, and cities – the pay starts to make a little more sense.
Sixteen of the 25 companies are in tech-related fields; every other company is a finance, oil and gas, or consulting firm. All are fields that are known for their high salaries.
They’re also known for being in high-cost areas. More than half of the companies are headquartered in New York or the Bay Area. There’s an argument against the high cost of living in these areas, but the pay fits the reality.
It’s also important to note that these are median salaries; engineering interns are likely making more than marketing interns, as will be the case when both are working full-time.
While the statement that these interns make more than the median worker is true, it’s a bit misleading. Yes, if you take a month’s salary from an intern and stack it against a worker’s salary, that might be the case. But there are a lot of caveats that the intern has to deal with.
First, the internship is a short-term thing. Yes, it may lead to a full-time job, but getting paid for a summer is not the same as an annual salary at a full-time position.
There are also other benefits that a full-time worker gets. Like, literally other benefits – things like health insurance and a 401(k) and paid vacation days that interns aren’t likely to receive. Pay is obviously important in a job, but it’s not the only thing we consider when we accept a position.
It’s understandable where the outrage for this story comes from. Wages have been stagnant for a long time, and these results seem to typify coastal stereotypes. The last thing any of us want is to think that some 20-year-old is making twice our salary.
But maybe we’re focusing on the wrong things. These are high-end industries, and it’s not like the tech field is going to get any less competitive or vital for the economy. We should be glad that young people are getting trained in relevant fields (and getting paid for it) and focus on making sure that wealth translates into equal opportunities for everyone instead of complaining about how much interns are getting paid.
Get essential money news & money moves with the Easy Money newsletter.
Free in your inbox each Friday.