Fairness for interns

Over the last fifty years, there has been an inexorable rise in the number of young people going on to university in the UK, with the proportion of working age people with university degrees reaching 38 per cent in 2013, compared to only 17 per cent in 1992.

For today’s graduates, more so than for previous generations, this means far greater competition in a more volatile and fast-changing job market. And following the recent decision to remove caps on student numbers, it is likely this competition will intensify in the years to come.

Despite the expansion of highly-qualified candidates, only 42 per cent of employers and young people in a recent report by McKinsey said that graduates are adequately prepared for entering the job market.  More than a third of employers also reported that new hires often did not measure up in a range of skills like problem solving and team work.

As a recent graduate, I have seen for myself the gap between the expectations of university study and the type of skills required to succeed in the workplace.   And as an intern at the Sutton Trust I can appreciate the role internships play in providing a stepping stone for graduates – giving them the opportunity to build up valuable work experience and address gaps in skills.

But what exactly constitutes an internship, and how should young people be reimbursed for these placements? This has been the subject of major public debate over the last few years, especially given increasing rates of unemployment among university-educated graduates.

Although there is no concrete definition of what constitutes an internship, a recent report by the Institute for Public Policy Research (IPPR) identified three ways in which they tend to differ from what would be conventionally thought of as work experience:

• Length: internships tend to last for months rather than weeks
• Working hours: interns are often expected to work full-time hours, the same as other permanent members of staff
• Work expectations: the work that interns are expected to do tends to have more in common with early career jobs than with training courses or other forms of work experience

The Sutton Trust currently takes on interns like me for six month periods. We work full-time and do real work – including providing research and briefing on major fundraising prospects and donors, supporting the Trust’s programmes, and providing communications support for the publication of our reports. Because of this we are paid a salary – the London Living Wage.

The paid nature of these internships reflects the Sutton Trust’s commitment to boost social mobility through increasing access to competitive professions.  Our new research, published today, reinforces the Trust’s belief that the persistence of unpaid internships can only serve to reduce chances for social mobility for those from more modest backgrounds.

The Sutton Trust’s research brief, “Internship or Indenture?” highlights the costs faced in undertaking an unpaid internship. We calculated the minimum costs that a young person would need to meet to complete a six-month unpaid internship whilst renting a room in London’s cheapest borough, Lewisham.  When the costs of rent, essential bills, travel expenditure and spending on food are added up, the total comes to £6,061.  Given that most employers do reimburse interns for their travel expenses, we adjusted this original figure, but total outgoings would still amount to £5,556, or £926 per month.

Although much of the attention around intern pay focuses within the capital, the high costs of unpaid internships are not limited to London.  Our research found that in Manchester, while cheaper rental costs reduced the total cost of a six-month unpaid internship, the cost still amounted to £5,078 (£4,728 excluding transport costs).

Coming from a state school background in Liverpool, I can easily recognise how these costs restrict internship opportunities to many of my friends, who do not have access to savings or financial support from family members to afford the costs of living in a city like London over a long period without pay.

Our research shows that the public understand these problems. Solid majorities of respondents across all income groups believe that unpaid internships are unfair, and that interns working for more than four months should be paid at least the minimum wage.  Thankfully, there is growing evidence that many professions are responding to this call for greater corporate social responsibility over paying interns.  For example, the Economist reported in September how investment banks such as Goldman Sachs and Morgan Stanley are using their internship programmes (aimed at undergraduate students) as a serious mechanism for finding more than half of new recruits, reimbursing successful applicants accordingly.

Given the connection between internships in a number of competitive industries and permanent employment (as highlighted by Linkedin last year), ensuring highly-able young people from low-income backgrounds are able to access such opportunities without fear of the financial repercussions is essential to unlocking social mobility, and to diversifying intake in the most competitive professions.

Jonathan Canty is a Programmes and Communications Intern at the Sutton Trust. 

The research brief, “Internship or Indenture?” was authored by Dr Robert De Vries, Research Fellow at the Sutton Trust, and can be accessed on our website here.