Unpaid internships ‘the scourge of the graduate labour market’

Experts raise concerns over social mobility, as bill to ban the practice moves through parliament

Industry experts have decried the ubiquity of unpaid internships, as a report reveals they are blocking young people from low-income backgrounds from accessing sought-after careers.

Employers have been urged to do more to “bridge the gaps in society” created by unpaid internships, with one recruiter describing them as the “scourge” of the labour market.

A survey of graduates by the Sutton Trust revealed more than a quarter (27 per cent) have undertaken unpaid internships.

Of those, two fifths (43 per cent) relied on living with friends or family, a quarter (26 per cent) relied on financial support from their parents and another 27 per cent worked a second job to fund their internship.

This represented a “huge social mobility issue”, said Sir Peter Lampl, founder of the Sutton Trust and chairman of the Education Endowment Foundation.

“Unpaid internships prevent young people from low and moderate-income backgrounds from accessing careers in some of the most desirable sectors such as journalism, fashion, the arts and law,” Lampl said. “It prevents these young people from getting a foot on the ladder.”

Chris Rea, higher education services manager at student jobsite Prospects, said unpaid internships inhibited social mobility and trapped graduates in “a cycle of hopelessness [that] damage their self-esteem”.

“Unpaid internships are the scourge of the graduate labour market,” he said. “They absolutely must, in all circumstances, be paid.”

The survey also found both graduates and employers were confused about the law on unpaid internships.

Under national minimum wage (NMW) legislation, interns must be paid if they are expected to work set hours or on set tasks – in essence, if they are doing anything more than shadowing a role. Half (50 per cent) of employers and a third (37 per cent) of graduates surveyed were not aware such unpaid internships were likely to be illegal.

Lizzie Crowley, skills policy advisor at the CIPD, told People Management employers should pay all interns the NMW, if not the living wage.“If you do that, you won’t get into hot water,” she said.

“A lot of interns feel their role should be classed as employment, but they’re resistant to reporting their employers because it would undermine the previous work they’ve done to get into the sector.”

Laura-Jane Rawlings, Youth Employment UK’s CEO, called on employers to “bridge some of the gaps in society” by having open recruitment processes and fairly paid opportunities including work experience and internships. 

Employers should also remember graduate interns are “ambassadors” for their business, said Joy Lewis, CEO of graduate talent specialist Adopt an Intern. “If you offer unpaid internships, will these graduates talk highly of you after their internship? I doubt it,” she said. 

The report was published the same day a bill to ban unpaid internships over four weeks is due to receive its second reading in the House of Commons.

Lord Holmes, who proposed the Unpaid Work Experience (Prohibition) Bill, said unpaid internships were “one of the most pernicious ways in which the advantages of the fortunate few are entrenched”.

Dan Hawes, co-founder and marketing director at the Graduate Recruitment Bureau, said a bill to outlaw unpaid internships was needed. “It’s a bit like the Wild West at the moment, and some employers are taking advantage of the fact there is currently no bill,” Hawes said.

“The employers are holding all the aces, and students know their rights, but whether they can act on them is the thing.”