Do Unpaid Internships Lead to Jobs?

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By Madeline Farber / Fortune

Taking an unpaid internship may boost your resume, but it won’t do much to help you get a job. In fact, you might be better off not taking an unpaid internship at all depending on where it is, according to a new study.

Students who took paid internships were more likely to get a full-time job post-graduation, as well as make a higher salary than students who took unpaid internships, according to a survey of the graduating class of 2015 by the National Association of Colleges and Employers.

Interns who were paid at private, for-profit companies had a 72% chance of getting a job offer, compared to just 44% of unpaid interns. Unpaid interns at state and local government agencies fared the worst, with only a 34% chance of getting a job offer after graduation. Rather surprisingly, students with no internship experience at all had a 3% higher chance of getting a job offer than students who took unpaid internships at local state and government agencies.

The gap remained true in regard to starting salary offers. Students who had paid internships with private, for-profit companies yielded a median salary of $53,521, compared to students who took unpaid internships with private, for profit companies. Those students received a median offer of $34,375, according to the survey.

The same held true across industry sectors—nonprofit ($41,876 vs. $31,443), state/local government ($42,693 vs. $32,969), and federal government sectors ($48,750 vs. $42,501).

Overall, an employer was more likely to offer a job to a student prior to graduation if he or she had a paid internship position. The gap in offer rates between students who had an internship experience compared to those who hadn’t is growing, according to the study, from 12.6% in 2011 to 20% in 2015.

In recent years there has been a wave of lawsuits that have drawn attention to unpaid internships that are popular in the current service-based economy, where work experience is essential to land a full-time job. Kickstarting the movement was a case against Fox Searchlight Pictures filed by former unpaid interns who said they deserved minimum wages in turn for their work for the company. In this case, a judge ruled in favor of the interns, and Fox Searchlight Pictures began paying their interns minimum wage.

Many lawsuits followed suit. A group of unpaid interns sued the Hearst Corporation with similar claims, but the judge ruled in favor of the Hearst Corporation. In October 2014, NBCUniversal settled a lawsuit brought by former unpaid interns of “Saturday Night Live” and other shows for $6.4 million. Former interns sued Rolling Stone magazine and CBS Corp.claiming labor violations.

Fortune previously reported that as more and more companies have been facing similar suits, the Second Circuit Court of Appeals in Manhattan addressed the query that many companies have been grappling with: whether or not an intern is an employee. In 2015, the Court reviewed the contradicting decisions made in both the Fox Searchlight Pictures case and the case against the Heart Corporation.

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