The majority of employers are in favor of cracking down on unpaid or low-paid internships, as a new study suggests that there is a growing divide between classes when it comes to accessing these schemes.
According to a study conducted by the Sutton Trust, a social mobility charity, nearly two-thirds (38%) of respondents believe that unpaid schemes must be banned and 30% would like to see existing minimum wage laws enforced better.
Nearly half (49%) of companies pay their interns the minimum wage. The percentage offering schemes that pay less than this has increased to 17% from 11%. Employers who offer unpaid internships have also slightly increased in the last year to 9%.
According to three-quarters of firms that offer internships, a ban would not have any impact on the number they provide. Only 8% said they would be forced to drastically reduce the amount they offer.
Nick Harrison, CEO of the Sutton Trust said that internships are increasingly important for getting the best jobs. It’s shocking to see how many employers pay interns less than the minimum wage or worse yet, nothing. “They should be ashamed.”
A class divide
The study also revealed a growing gap between middle-class and working-class graduates when it comes to accessing internships that are vital for careers.
The Sutton Trust believes that this is because employers are either not advertising internships or giving them to family members and friends instead of advertising the positions. They may also be continuing to pay interns too little at a time where tighter controls will soon be announced on illegal practices.
Public First conducted a poll for Sutton Trust that showed 51% of graduates had completed an internship. This is a 12 point increase since 2018. 27% of respondents have done multiple internships. London graduates were more likely than those in the West Midlands or in Scotland, Wales, and Yorkshire to have undertaken an internship.
A survey of HR decision makers by YouGov conducted for the Sutton Trust found that 59% of employers currently offer internships compared to just 48% last year. One in three graduates believe they were only able to achieve their current position because of an internship.
The findings show that the gap between middle-class and working-class graduates has increased from 12 to 20% points since 2018. 36% of middle-class graduates completed an internship, compared to only 55% of working-class individuals.
Ineffective enforcement
According to employment law, if interns are classified as “workers”, they have the right to receive the National Minimum Wage (NMW), among other benefits. According to the Sutton Trust some businesses get away with breaking laws because there is confusion and lack of enforcement. The Sutton Trust claims that most unpaid or underpaid schemes in existence are illegal. However, interns are expected to inform employers who are not paying.
In the survey, 61% of recent graduates were not paid or were underpaid. 23% received wages below minimum wage. One in six schemes (17%) offered only expenses and a similar percentage (21%) did not offer any compensation.
Results showed that graduates from the middle class are more likely to have completed an unpaid or low-paid internship than those from the working class, 37% versus 28. Graduates who took part in unpaid schemes did so due to funding from their parents (40%) or because they were staying with friends or family for free (39%) or using their savings (29%).
Harrison stated: “The government pledged to prohibit unpaid internships. This is the right thing for them to do. It is clear that not all young people are able to get financial support from their parents, so banning the outdated practice of unpaid internships will help level the playing fields for these valuable opportunities. It’s an obvious decision that should be made without delay.”
Data also showed that internships were not advertised widely. One in five (20%) found placements at organizations through family and friends, compared to only 11% via advertisements.
Harrison said: “There’s a lot more employers can do, including advertising internships, to ensure they have access to a larger pool of talent. For example, instead of hiring family members and friends, or their biggest customers, they should advertise internships.”
