Working it The trouble with unpaid internships
As interns are granted new workplace rights, Cara Mcgoogan asks how they will shape young careers
Unpaid internships have, for the past decade, been promoted by employers as a necessary hurdle for students, but the “unfair” schemes are finally falling out of favour. Students have long been pushing back against companies who insist on working without remuneration; now, the Government has announced a crackdown that could end the scourge for good.
Ministers have sent out 550 warning letters to organisations who employ people whose work is considered so vital they must attend every day, yet are not financially compensated for doing so. Under new guidelines announced last week, such workers – an estimated 2,000 of the 70,000 interns in the UK – will be entitled to the minimum wage of £6.70 per hour, with Andrew Griffiths, the business minister, remonstrating that “no one should feel like they have to work for free to get the skills and experience they need to get ahead”.
The law has long included the provision that young people conducting the work of an employee or contractor have a right to at least minimum wage, but graduates and students still face the difficult choice of turning down experience or conducting it for free.
At best, unpaid internships offer young people a chance to build their CV and experience what it is like to work in competitive industries; at worst, they exploit talent and ask interns to cover their own costs. These can amount to £1,019 a month in London and £827 in Manchester, according to the Sutton Trust, a foundation that promotes social mobility through education.
Supporters of the crackdown say the practice is “unfair” and discriminates against people whose parents are not willing to bankroll the early days of their career.
“There’s a moral duty now on organisations not to run unpaid internships,” says Dr Lee Elliot Major, chief executive of the Sutton Trust. “To not give someone a decent salary is outrageous.” Almost half of graduate employers say candidates need to have experience to secure a job, according to the Institute of Public Policy Research.
But as a recent study from the Sutton Trust reveals, as many as
40 per cent of young people who have undertaken an internship haven’t been paid for it.
Creative industries that have a high bar to entry and require experience,
‘It’s exploitation – you are exploiting people by not paying them’
such as fashion, acting and journalism, remain some of the worst offenders.
“It’s really tough getting a foot in the door in many of these competitive industries,” says Dr Major. “In our view, it’s exploitation. You’re exploiting people by not paying them properly. If you’re from a nonprivileged background, you’re not going to be able to do it.”
Dr Major says interns should ask for pay, especially if they cannot afford the experience otherwise. “Pick up the phone and be assertive,” he urges. “You should be able to demand to be paid at least the minimum wage if you’re going to give an organisation some of your talent.” He adds that companies benefit, too: “If you attract talent from all backgrounds, you’re going to have a more diverse and effective workforce.”
But it isn’t always that easy. Fear of losing the opportunity and being shut out from further openings often prevents people from asking to be paid. One recent graduate, who is about to embark on an unpaid internship in the communications sector, says the experience is more valuable than money at this point in her career.
There is certainly an increased awareness of compensation rights among young people, however, with social media, high university tuition fees and a boom in advocacy organisations raising awareness of what they are owed.
Rate My Placement (RMP) is one such service that only promotes paid opportunities. It says the number of companies advertising on its site has grown as organisations have realised that no pay isn’t an option, and puts the average salary for undergraduate internships at £18,100, or £20,000 for those who have finished studying.
“Companies are getting the message and realising the world has moved on,” says Oliver Sidwell, co-founder and director of RMP Enterprise. “Students add such value to companies. If you don’t pay them, you’re essentially asking them to pay to work for you.”
RMP has found paid schemes from sectors such as IT and banking attract talented and committed applicants, particularly to companies that create a “pipeline” through which employees can progress. It encourages firms to run three-year schemes that include a few weeks of work experience for students at the end of their first year; an internship during the summer of their second year; and a graduate scheme at the end of their degree. All of which are paid.
“It’s more cost effective and it takes the ‘employability’ problem away from students so they can focus on their degrees,” says Sidwell.
Unpaid internships are likely to continue until the loopholes are closed, and no one has yet been prosecuted under the new guidelines. In the meantime, though, as former interns take matters into their own hands, returning to their employers to ask for the payment they’re legally owed – for which companies from Sony to Condé Nast in the US have had to award payouts – companies will need to be far more careful.