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The problem with unpaid internships

Published: Wednesday 19th December 2018

Vendetta mask on drama curtainA report by social mobility foundation, the Sutton Trust has found that more than 25% of all internships are unpaid (defined as been paid less than minimum wage). In the survey of 2,600 graduates aged 21 to 29, most of these were found to be in highly desirable industry sectors such as the arts (86%) and media (83%). However, surprisingly, the retail sector had the highest number of unpaid interns with 89% receiving no compensation for their work.

Unpaid internships are taking real jobs awayInternship diagram

Obviously, working for no pay is viewed by many as unethical, yet many students and grads do it as a way of getting ‘a foot in the door’ and gaining experience in their chosen profession. However, this does mean that many entry-level jobs in that profession are taken up by interns, many of which are receiving no pay for their efforts. Effectively, these are ‘real’ jobs that have been taken out of the employment market by being offered as an internship.

Typical examples cited in the report include a major fashion designer hiring an intern for up to three months in the lead-up to London Fashion Week, and an MP offering to pay a researcher expenses only. While it’s possible to secure a paid internship in the tourist industry, a summer internship is likely to come with low/no pay or be commission-based.

diagram of low income familyDiscriminating against low-income families

Moreover, because these internships require workers to source their living expenses in other ways, typically, those from low-income backgrounds can’t take them on. 43% of interns live for free with friends or family while 26% needed money from parents. So effectively, those from disadvantaged backgrounds are prevented from accessing careers in these sectors.

There also seems to be a lot of confusion among regarding internship guidelines set down by the HMRC. This is a grey area that needs to be tightened up in terms of legislation, as there is currently no clear legal definition of ‘internship’.

Fortunately, it looks like that might be about to happen. The report from the social mobility trust coincides with a bill going through parliament to limit unpaid internships to four weeks.

At the moment employers only have to pay minimum wage to someone classed as a worker in that they have a contract, or the promise of work in the future, and have set hours in the workplace. If you’re shadowing someone else in the duties or taking part in a work placement as part of an educational course, then you have no right to minimum wage.

Stuck in an internship rut?

Depressingly, the Sutton Trust survey found evidence that taking an internship could actually be bad for your employment prospects. It seems that graduates become trapped in a cycle of unpaid internships. 70% of respondents had undergone multiple internships. The reality is, an internship might get you experience, but experience doesn’t pay the bills and, in the end, may only lead to another unpaid internship.

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