As summer begins, interns everywhere are getting their first taste of the "real world," and many will take home a very real paycheck of $0.
Unpaid internships have become a controversial topic. Some argue they provide valuable opportunities for young people to learn about an industry, while others critique the practice as an excuse to exploit free labor from young workers eager to get a foot in the door.
But whether these roles are a crucial professional stepping stone or a form of exploitation, it costs money to give away your time for free. Unpaid interns must support themselves with little free time, and the opportunity cost of working for free is higher than you may expect.
If you consider how much someone might earn in a paying job, plus the cost of living, you get the cost of an unpaid internship — and the price tag may surprise you.
Opportunity cost
Even working minimum wage can be more sustainable than being paid nothing at all. The federal minimum wage is $7.25 (although workers in Georgia and Wyoming can be compensated only $5.15, depending on the job.)
If you worked 40 hours a week for 12 weeks, the length of a typical summer internship, you would make $3,480, before taxes.
If unpaid interns were compensated at rates closer to what full-time entry-level employees are paid, this paycheck would be much larger. No matter the amount, money like this can go a long way for a young worker or someone who is still in college.
Cost of living
Time reports that the cities where interns are most interested in working are New York, San Francisco and Los Angeles. Unfortunately, these are some of the most expensive places to live in the U.S.
Workers who choose a paid summer job over an internship might still be responsible for the cost of temporary housing, but they may have more control over choosing a location with a manageable cost of living.
In Los Angeles, the least expensive of these three locations, the estimated cost of living comfortably for one year is $38,024. A summer in The City of Angels would cost you roughly $9,506 — far more than the average intern is able to spend.
Total cost
If you consider the earnings that unpaid interns are missing out on, and how much they have to spend to live in expensive cities with large intern populations, an unpaid internship could cost you as much as $12,986.
There is always the chance that an unpaid internship could lead to a permanent salaried role with a company, but research from the National Association of Colleges and Employers found these roles don't actually increase a college student's chances of getting a job after graduation.
Still, Sidney Torres, self-made millionaire and host of CNBC's "The Deed," recommends that you "intern in the industry you want to be in, don't worry about what you're getting paid." If you follow Torres' advice and end up choosing an unpaid experience, save money by cutting unnecessary costs, living with family, or finding clever ways to make extra money on the side.
And paid or not — take full advantage of your time as an intern.
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