This article is from the archive of our partner National Journal

Internships are supposed to open doors. But what happens when they are only accessible to those who can afford to work for free?

Maxwell Love, president of the United States Student Association, and other student advocacy groups worry that the answer is a decline in the socioeconomic and racial representation of the nation's interns.

An inability to take an internship because it doesn't pay is an issue that Love says his group hears about frequently.

"You can't bring people to a city like Washington, D.C. or New York or San Francisco," he said, "where a lot of internships are, and not pay them."

"Right now, we don't know how many unpaid interns there are across the country, where they're working or what communities they come from," Jennifer Wang, policy director for Young Invincibles, said in a statement. "That's a big concern, especially because we could be leaving many young low-income people behind. We know that internships are often critical to launching careers, and so we're worried about whether the people who need internships the most are getting them."

Their worries have only increased in the last week. A new court ruling could pave the way for more unpaid internships and, opponents argue, leave students of color on the outside of this door to opportunity.

"We know that internships are often critical to launching careers, and so we're worried about whether the people who need internships the most are getting them." --Maxwell Love, president, United States Student Association

A federal Appeals Court recently ruled that companies may legally use unpaid interns if they benefit from the experience, a serious departure from a lower court's decision that movie studio Fox Searchlight Pictures had erred when it failed to classify unpaid interns as employees.

Fox and other employer-advocacy groups have praised the decision.

"It fits pretty much in line with what our overall position is on internships," Edwin Koc, director of research, public policy, and legislative affairs for the National Association of Colleges and Employers, a nonprofit that tracks student hiring trends, said of the ruling.

But student advocates are concerned that if companies are permitted to bring on interns without paying them, young people who don't have the luxury of having their living expenses covered by others will have to decline, and could fall behind their wealthier peers when it comes to building strong resumes.

The plaintiffs, former interns on the movie Black Swan, have argued that Fox Searchlight violated minimum-wage laws when it failed to pay them for their work copying papers and performing other menial tasks.

"I'm in favor of students getting more skills but also being compensated," Love said. "I think that's pretty reasonable."

The Appeals Court said the critical question should be who benefits more from the relationship—the employer or the intern—and ordered the lower court to focus on that question. Previously, the lower court had looked at a broader set of Labor Department standards that consider whether an intern displaces a regular employee and whether an intern is entitled to a job at the end of the internship.

The upshot? Companies may have an easier time justifying the use of unpaid interns.

Proponents say allowing unpaid interns helps young people get a leg up in a competitive job market. A Wall Street Journal editorial argued, "This isn't exploiting young people. It's letting young people exploit an opportunity."

"We are very pleased with the court's ruling, but the real winners are students," a Fox spokesman told The New York Times in a statement. The studio did not immediately respond to a request for comment from Next America.

Yet critics worry that unpaid internships could limit the intern pool to those with the necessary financial means and leave behind students who are unable to work for free, thereby lessening their chances to build stronger job prospects.

Koc acknowledges the possibility that some students will have to take paying jobs instead of internships, but says it's unlikely to be a major issue.

"That's probably going to be a serious consideration for first-generation students, students that come from backgrounds that are not well-off," he said, "so to that extend, it could have some effect. But I don't know that it'll have a dramatic impact as such."

Many students of color surveyed by his organization gravitate toward nonprofits that operate under different guidelines and are not required to pay interns, Koc added, noting that they see the internships as a way to explore career options.

However, the case could also damage the chances for other former unpaid interns to argue that they deserve compensation, particularly those involved in class-action claims, since the question of which party benefits more may be difficult to decide without considering individual cases.

According to a 2014 survey of 43,000 graduating seniors by Koc's group, 61 percent had some sort of internship experience during college, with more than half being unpaid. A separate study commissioned by The Chronicle for Higher Education and cited by the Brookings Institution suggests that internships are the most important factor when it comes to deciding whether to hire a recent college graduate, a troubling finding when some students cannot accept unpaid positions.

As Brookings senior research assistant Joanna Venator writes in a recent blog post, "One of the obstacles to greater intergenerational mobility (of the relative kind) is the 'glass floor' that keeps less-talented children born to affluent parents at the top of the income ladder. One way in which affluent parents protect their children from falling is by using personal or professional connections to arrange job or internship opportunities—but there are less-visible forms of protection, such as paying the summer living costs that make an unpaid internship feasible. This is not meritocracy: It is opportunity hoarding."

Love agrees.

"We are against interns getting abused or taken advantage of," he said, "and I think there are a lot of companies doing that."

Whether deliberate or not, companies are limiting the applicants they consider, and missing out on talent in the process.

This article is from the archive of our partner National Journal.

This article is part of our Next America: Higher Education project, which is supported by grants from the Bill & Melinda Gates Foundation and Lumina Foundation.

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