Unpaid internships: just the job, if your parents can afford it

Foot in the door: after his three-month City internship in 2005, Prince William opted to continue his career as heir to the throne. Clarence House/PA

The recent news that Westminster School has opted to raise money by auctioning off internships at merchant banks and law firms should come as little surprise. Internships are such a valuable way of getting a foot in the door of a desirable profession that people are prepared to pay hundreds of pounds to give their offspring the chance to work, without pay, at the employer of their choice.

Undergraduate students have two problems not faced by preceding generations: they have to pay for their higher education, and they are expected to leave it with “employability skills” as well as a degree. This means they often need to work alongside their studies, both to earn money and to gain practical and commercial skills and experience.

The boundaries between employment, work and education have been becoming increasingly blurred, as we found when we tracked a large national cohort of UK students from application in 2005-6 until 2012. Almost four-fifths of the Futuretrack graduates we surveyed between 18 and 32 months after they had completed their courses had some type of work experience during their studies. For 28 per cent of respondents, work experience had been part of their course, either as a sandwich placement or a shorter structured placement.

A quarter had undertaken unpaid work in order to gain career-related experience. But who were those who did unpaid work, and was it worthwhile?

Where are interns working?

The incidence of unpaid work varied according to subject studied, as shown in the graphic below.

Incidence of unpaid work during and after graduation by broad subject studied. Futuretrack Stage 4, all UK domiciled economically-active graduates (weighted): ({Purcell et al.2013:p.109)

The majority of graduates did no unpaid work at all - and of those who did undertake it, most did so during their undergraduate degree only. The subject group with the lowest incidence of unpaid work was mathematical and computer sciences. At the other end of the spectrum, social studies and law, medicine and related and education had the highest proportions of respondents reporting unpaid work during their degrees.

Graduates from creative arts and design subjects had the highest proportion of respondents who only worked unpaid after graduation. Graduates with interdisciplinary degrees that had included a STEM (science, technology, engineering, and maths) subject were less likely to have done unpaid work than those whose courses did not.

In addition to showing differences among the broadly-grouped subjects, our research also found that most unpaid work was done prior to graduation: unpaid graduate internships and work experience are relatively recent developments, not unrelated to the impact of the 2008 recession and subsequent market stagnation.

Focusing on those who had embarked on their courses aged 20 or younger, we found that women were more likely than men to have worked unpaid. There was a strong correlation between socio-economic background and participation in unpaid work. Graduates from professional and managerial backgrounds were most likely to have done so, while those from routine and unskilled backgrounds were least likely.

System favours the better-off

Those with graduate parents, those who had been privately educated and those at universities with the highest entry qualifications – in short, those with the greatest social and educational advantages – were also most likely to have been able to take advantage of unpaid work experience opportunities during their courses and least likely to have worked unpaid after graduation.

These were also the respondents most likely to have reported satisfaction with their current job, their career so far and be most optimistic about their longer-term career prospects.

This raises the equal opportunities issue. It is clear that unpaid career-related experience prior to labour market entry enhances access to professional employment, particularly in those areas of employment where there is an over-supply of qualified candidates. These typically include journalism, the law, arts management and the not-for–profit charity and development sectors where unpaid and voluntary work have become established as prerequisites to gaining a place on shortlists for paid jobs or training contracts.

Of course, to be able to do such work, it is necessary to have financial support or subsidy, which is where unpaid graduate work has become increasingly controversial because it offers advantages to those graduates whose families can support them through their internships (although Futuretrack also talked to several graduates who were supporting themselves through internships with paid work in other sectors, typically hospitality).

The government has promoted the introduction of low-paid and subsidised graduate internships to reduce graduate unemployment and skills attrition and to encourage innovation. Since the onset of the recession, more employers beyond “the usual suspect” industries have become aware of the potential supply of students and graduates willing to work unwaged or for low pay to enhance their CVs.

Opportunity or exploitation?

Unfortunately, it is clear that in some cases they offer internships where there is little likelihood of progression to paid jobs – so that even the relatively fortunate graduates who have been able to accept these have been becoming disillusioned. Concern has been expressed about both the efficacy of unpaid internships in meeting the objectives of the graduates and that such work is exploitative, increasing inequality of opportunity.

Both the Chartered Institute of Personnel and Development (CIPD) and the Association of Graduate Careers Advisory Services (AGCAS) have produced statements attempting to introduce codes of good practice to guide employers in formulating graduate internship agreements. In addition, many universities are refusing to publicise unpaid internships, and a Bill is to be debated in parliament next year to make the advertising of unpaid internships illegal.

Meanwhile, top public schools such as Westminster are auctioning school-age internships with prestigious “top employers” to the highest bidders among their pupils’ families and the internet is full of information about “great graduate internships”, many unpaid.

Because they do not constitute employment, these are an invisible part of labour market activity; in effect, private relationships between employers who are not really employers and the job-seekers who have not found jobs.

Who benefits? Certainly, employers get free work and can “test-drive” potential employees; some job-seekers gain useful experience and a few of these progress to “real jobs”. But it is hard to avoid the conclusion that equal opportunities are being eroded.

The Conversation UK offers unpaid internships of up to one month.