23 November 2018

Over one in four university graduates have taken unpaid internships, new research from social mobility charity the Sutton Trust has found.

The organisation's new report Pay As You Go surveyed 2,614 graduates between the ages of 21 and 29, 1,003 senior business leaders, and interviewed 234 staffers at Westminsters (31% of which were unpaid) to gain detailed insight into the internship market for the first time.

Overall, 27% of graduates said they had taken at least one unpaid internship, over half (53%) of which were over four weeks in length and more than one in ten (11%) of which lasted over six months.

The concept of working for free appears to be becoming normalised, as the trend has caught on considerably in recent years. Nearly half (46%) of graduates under the age of 24 had taken an internship compared with 37% of those in their late 20s. Among all of those who had taken an internship, 70% had been in at least one that was unpaid.

What's more, just one period of unpaid work is no longer enough, with the average number of internships taken by graduates currently in their 20s now standing at 1.8, and younger graduates more likely to have taken multiple internships than their older peers.

Understanding the phenomenon as a cost-cutting exercise for struggling enterprises would be a mistake, as large employers are twice as likely to offer internships compared with small businesses, and almost half (46%) of all employers use interships overall.

Although internships are traditionally associated with professional jobs and are still linked to higher salaries in the long term, it would also be a mistake to see them as an investment for a young person's future, as the Sutton Trust found evidence that younger graduates doing multiple internships are actually getting trapped in an endless cycle of unpaid work that has little benefit to their career, despite the fact that 70% of employers say interns do useful work for their business.

In order to finance this time without an income, 43% of unpaid interns live with family and friends for free, 26% rely on money from their parents, and 27% work another job on the side. Surprising no one, working class graduates are significantly less likely to take unpaid internships than middle class graduates (31% compared with 43%), and those who do are more likely to find their internship by working a second job than middle class graduates, who were more likely to rely on their families for money.

With many top professions seeing internships as a requirement of entry to paid work, this culture is having an impact on social mobility and reinforcing the class system.

Finally, it's likely that many – if not most – of the internships in the economy are unlawful, as if an intern fits the legal definition of a 'worker' (such as by working set hours or on set tasks), they should be paid the minimum wage. But the Sutton Trust found widespread confusion about the law, with 50% of employers and 37% of graduates not aware of the law.

Lord Holmes of Richmond will today call on the government to end unpaid internships. In an open letter, he said: "One of the most pernicious ways in which the advantages of the fortunate few are entrenched is through the illegal yet widespread practice of unpaid internships. Inevitably and obviously only those who can afford to work free are able to access these opportunities which in turn lead to paid jobs and ultimately careers in areas such as journalism, fashion and, most shockingly, politics.

"The government have said they are taking the problem seriously, yet in the past nine years HMRC has recorded no prosecutions in relation to interns and the National Minimum Wage. It is unsurprising that individuals are reluctant to report companies or employers. If you believe this practice to be an unpleasant but necessary way of getting a foot in the door you are unlikely to do anything that would slam the door shut completely. For countless others it is yet another way of ensuring so many doors remain closed."

In our latest report Rolling out the Manifesto for Labour Law – recommendations of which have informed Labour Party policy – we propose a new system of enforcement to ensure the law is upheld in the workplace.

The reinstatement of sectoral collective bargaining and a genuine choice to be represented by a trade union at work would allow unions and employers to standardise the minimum pay and conditions for interns across entire industries and then ensure this agreement is enforced. Dispute resolution procedures can be negotiated to resolve breaches in-house as a first port of call, reducing workers' reliance on litigation to claim their rights. Further, an independent Labour Inspectorate is needed to identify breaches and ensure the law is enforced.

These are just some of the recommendations in Rolling out the Manifesto for Labour Law – click here to read more