economics

Should Businesses Pay Interns? Towards a Morality of Profit

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Should we hold for-profit companies to a higher ethical standard than non-profits? If you answer “yes” to this question, you’re implying that profit is morally questionable. And the question whether profit is morally questionable raises important ethical issues for Christians in the marketplace.

This question arises from public debate surrounding Supreme Court cases dealing with unpaid internships. The discussion is rarely couched in terms of the morality of profit, but the underlying assumptions are worth examining.

In many career fields, internships are seen as a rite of passage. Colleges often promote them as a way to gain experience and sometimes earn course credit. In the best cases, internships can be a win-win. The intern gets experience and an opportunity to decide if a vocation fits; a company gets to make a connection with a person who is interested in their business.

There is no official data on the ratio of paid to unpaid internships, but both exist in plenty. In circumstances where the intern is paid, the individual is often treated as a legal employee. He or she is usually part-time and paid a wage consistent with little experience and incomplete qualifications.

The Department of Labor has published six guidelines for determining whether an unpaid internship is legal. The internship is supposed to be for the benefit of the intern and should provide no immediate advantage from the work of the intern. Along the same lines, interns cannot replace regular employees, but must be closely supervised by existing staff.

Why do the rules about internships change when a company tries to make a profit?

But these rules only apply to for-profit companies. According to the Department of Labor’s blog on the topic,

The Wage and Hour Division recognizes an exception to the employment relationship for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations.

In other words, it is ethically acceptable for an individual to volunteer for governmental or charitable organizations but unacceptable for the same individual to volunteer at a for-profit company.

Why do the rules change when a company tries to make a profit?

One probable answer is that many people fail to recognize the significant benefits that for-profit companies have in society, particularly when they make a profit. In other words, such people assume that non-profits serve the common good while for-profits mainly serve the owners’ interest (perhaps even greed).

Certainly a for-profit company should serve the interests of the individuals who have invested time and financial resources in starting and operating the business. That doesn’t mean it is wrong to make a profit. To argue we must treat such organizations differently misses the beauty of the network of exchanges that occur within the market, which should enhance human flourishing.

Non-profit entities exist for a variety of purposes. Some of them enhance the common good in their community, fulfilling purposes for-profit organizations don’t. However, even for-profits advance the welfare of their neighborhood by being a presence that discourages crime, offering economic opportunities to employees and making goods or services available to a community. Balanced self-interest inspires creativity, motivates healthy growth and encourages businesses to invest in people for their mutual benefit.

The rules about unpaid internships reinforce the notion that non-profits are somehow more ethical than for-profits. The result is that for-profit companies are given an incentive not to offer internships because the rules specifically state they cannot benefit. Potential workers are thus deprived of the opportunity to gain real, independent experience in exchange for their time.

The rules about unpaid internships reinforce the notion that non-profits are more ethical than for-profits.

To be sure, the Department of Labor issued these rules to prevent abuse. When an internship benefits a company, the balance of power can easily tip away from the inexperienced person who is trying to get a foot in the door. It isn’t hard to imagine a six-month internship with a promise of employment turning into a yearlong experience with no job. Human sin necessitates human laws to mitigate abuse. The simple rules about internships from the Department of Labor are an attempt to curb injustice.

Yet the simplicity of the rules also creates unintended complexities. An intern who becomes an integral part of a working group often wants to contribute and add value to the team. If the internship is for an extended period of time, the intern may become competent to perform the tasks of a regular employee and often will want to do independent work. The current guidelines prohibit such participation, even on a voluntary basis, for an unpaid intern at a for-profit company.

A just profit is a moral good.

There isn’t an easy answer to questions about unpaid internships. However, limiting opportunities for internships solely based on intent to make a profit sends the message that profit is bad. If a company fails to make a profit it will cease to exist, which means that the positive impact of employment and presence in the community is lost. When we understand the real benefit that economic exchanges have, beyond the initial acts of buying and selling, we recognize that a just profit is a moral good.

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  • economics
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Andrew J. Spencer

Andrew J. Spencer holds a PhD from Southeastern Baptist Theological Seminary. He is a member of CrossPointe Church in Monroe, MI. Spencer writes often at www.EthicsAndCulture.com and recently published 'The Christian Mind of C. S. Lewis.'

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