THE BLOG

Unemployment May Be Down, But Unpaid Internships Keep Underemployment Up

22/09/2014 12:21 BST | Updated 20/11/2014 10:59 GMT

I would like to congratulate the Conservative government for the latest figures published by the Office of National Statistics (ONS) identifying that unemployment has fallen 6.2% since 2008, the largest drop since 1984. I am sure this will be another 'notch' in the government's election campaign for 2015, which we will hear about in the coming months, along with reducing the deficit left by the last... (I don't think I need to complete this sentence, I'm sure you have heard it many times before).

A recent publication by the House of Commons, shows that the unemployment rate for 16-24 year olds is down 4.5% and long-term youth unemployment is down 77,000, both on the previous year respectively. To rebut the argument put forth by analysts that the figures have only fallen due to an increase in part time work; the ONS evidence that even underemployment is down by 66,000. Though the figures are to be commended, underemployment is heavily rife amongst graduates taking on internships alongside part-time work, in the hope it will lead them to their chosen career. But as the job market is so fierce, are organisations that provide internships helping candidates to compete or are they exploiting the growing need to be competitive?

Working for free: experience or exploitation?

Based on the analysis of LinkedIn who analysed 300m profiles, the Economist identified certain sectors that provide permanent employment for interns; namely finance. This can be compared to internships in charities or NGOs where interns are less likely to be offered employment. Firms and organisations are aware that internships are a lucrative way to keep costs down and provide keen graduates with experience to help them on their way to a white-collar position. Comparing this against a salaried employee, it is weighted against benefits such as pensions, health care and maternity leave.

An appealing alternative are unpaid internships, which are increasingly becoming the norm, not only in the UK but in America too where in 2010 the figure for journalism students finding paid internships fell to 34%, from 57% years previously. HM Revenue and Customs have recognised a growing exploitation from organisations recruiting unpaid interns in return for completing qualified work, with no prospect of future employment and are encouraging employers to pay the minimum wage. A positive step indeed, however, the national minimum wage contains an exemption for charities, where workers are not entitled to a minimum wage if they are classed as a volunteer. Though this would legally entitle charities to accept help voluntarily without incurring a substantial loss on funding, there is a growing concern whether this exemption is being exploited by large charities to circumvent paying them. The Charted Institute of Personnel Development published a report which recommends that there should be tighter guidelines on how a volunteer is defined, or that the employer should advertise the duration of time they are expected to work on all graduate vacancies - failing to do so would trigger a training wage.

Despite payment, many graduates do feel their internship was a valuable experience, as they receive opportunities to network and meet professionals within the field. But because it is a valuable experience, charitable organisations should not take advantage of the legality behind being a volunteer and show their appreciation through payment, to ensure that the individual feels their self-worth during their time as an intern. To highlight this a poll was conducted by the Guardian, showing that 67% of unpaid interns felt exploited or undervalued.

Social mobility

This of course is subject to the individual being able to live in the required location to work and by having an exemption from payment, it heavily reduces social mobility. According to a YouGov survey in 2011, 39% of people who were offered an internship had to turn it down because they were not able to work for free. Though youth unemployment has decreased, many 18-24 year olds are still eager to have a competitive edge in the job market and short term unpaid positions provide an opportunity to the fortunate few who are able to accommodate themselves during this time. Cancer Research recruit interns on a rolling basis throughout the year, giving them vital experience in various departments and in return they would have the opportunity for flexibility so they can work part time or study simultaneously. Though this option is common for large charities, it still creates a barrier for highly capable individuals who do not have the opportunity to reside in a particular location for no pay. Take for example Urban Outfitters, where in 2013 £2.7 billion was made on sales and revenue, yet ludicrously still advertised for an unpaid internship lasting 9 months, covering only lunch and travel expenses. Since renting a room in Central London can cost roughly around £500 per month, I strongly feel this opportunity is unfairly targeted and restricted to the few who are able to endure this exploitation-for-non-fiscal-means for such a long period of time.

An internship can be a crucial learning curve for a student or graduate, bridging the gap between theoretical work and practical application. It is also an investment in the talent of tomorrow, where today's interns can be tomorrow's employers. If the internship is carefully constructed with a clear objective and fiscal reward reflecting the rising inflation of living costs, only then can the barriers of circumstantial privilege be broken. There is a great opportunity for the next government to make a real change for future interns by creating a fairer society, where payment for labour is mandatory, the definition of volunteer is better defined and unpaid internships are a thing of the past.

Now all that is left to do is to convince certain MPs in government to actually pay their interns...