Example of a Job Market

According to the U.S. Department of Labor, Bureau of Labor Statistics total

employment for non-farm payrolls rose by 304,000 for January 2019, and the
unemployment rate (a lagging indicator) bumped up to 4.0%. Industries such as
leisure and hospitality, construction, health care, and transportation and
warehousing all saw job gains during this time.

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Related Terms
Underemployment
Underemployment is a measure of employment and labor utilization in the economy
that looks at how well the labor force is being utilized. more
Employment Situation Report Definition
The Employment Situation report is a monthly report compiling a set of surveys in
an attempt to monitor the labor market. more
Labor Market
The labor market refers to the supply of and demand for labor, in which employees
provide the supply and employers provide the demand. more
Unemployment
Unemployment is the term for when a person who is actively seeking a job is unable
to find work. more
The Conference Board (CB): Necessary and Widely-Used Economic Data
The Conference Board (CB) is a not-for-profit research organization which
distributes vital economic information to its peer-to-peer business members. more
Unemployment Rate Definition
The unemployment rate is the percentage of the total labor force that is unemployed
but actively seeking employment and willing to work. more

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SALARIES & COMPENSATION

Unpaid Internship Impact on the Labor Market

MACROECONOMICS

Participation Rate vs. Unemployment Rate: What's the Diff

The Concept of an Internship
The concept of an internship is an evolved version of an apprenticeship.
Historically speaking, apprenticeships date back to medieval times when an
inexperienced person—the apprentice—would work for a length of time learning a
trade at the hands and tutelage of a master. In this early version of on-the-job
training, the apprentice often lived a meager existence at the home of the master
or even at the workplace. Hours were long, the pay was nonexistent, and the
apprentice was at the mercy of their teacher. After years of working under the
master, slowly moving up the skills ladder, the apprentice would one day satisfy
his obligation to the teacher, and leave to ply his own trade.

An internship is based on the same concept of slowly learning a skill or trade

under the direction of a more experienced worker. However, it is more exploratory
and less limiting than an apprenticeship. The internship does not require the
intern (apprentice) to work for the same trainer (employer) under whom the training
was received for an extended period.

The parties involved in internships (paid or unpaid) are the student/intern, the
employer, and usually the academic institution the student/intern attends or from
which they graduate. There are certain benefits for each constituent involved, and
each party plays a synergetic role in the short- and long-term effects of
internships on one another, the labor force and the economy as a whole.

Employment Not Guaranteed

At the same time, the employer/trainer does not guarantee employment upon
successful completion and expiration of the internship. Further, apprenticeships
refer to blue-collar laborers compared to internships, which refer to white-collar
workers preparing for professional careers.

Short-Term Obligations
Traditional, non-traditional, and returning students can enter an internship as a
pathway to future full-time employment. They have even become a requirement for
graduation for some degree plans by some institutions.

They tend to be short-term (six to 12 months) and involve the experience gained by
the student/intern in exchange for services to the trainer/employer. Internships
are classified as research-based or work experience (the majority) or virtual
(working remotely).

Paid and Unpaid Internships

Additionally, they can also be paid, either for academic credit or non-credit, or
unpaid. Paid internships usually offer low compensation, and unpaid internships are
usually accompanied by faculty recommendation letters.

The ones without compensation are subject to more stringent labor guidelines.
Internships are governed at the federal level. However, some states have their own
regulations (e.g., California) requiring interns to receive college credit for
their work.
The U.S. Department of Labor's Fair Labor Standards Act (FLSA) prescribes standards
for the basic minimum wage and overtime pay, affecting most private and public
employment, and requires employers to pay covered non-exempt employees at least the
federal minimum wage. If overtime occurs, it is paid at one-and-one-half-times the
regular rate of pay.

Benefits to Employers
Unpaid internships provide numerous benefits to employers. Employers can use
internships as a cost-effective recruiting strategy for services received at no
cost (compensation) to them. This lowers or eliminates the employer's labor cost
(or paying taxes on wages) for interns.

The opportunity to screen trainees while getting acquainted with their quality of
work and performance is valuable to employers. It facilitates their decision-making
process on who they extend an offer for future employment. If the interns can
maintain their internship by showing measurable progress when performing duties
assigned by the employer, they may have a good chance of securing a full-time
position at the organization.