01/08/2011 07:15 BST | Updated 01/10/2011 06:12 BST

The Real Problem With Internships

Last week, David Willetts - the Universities Minister but also the Chair of the Government's Gateways to the Professions forum - launched a new government code for Internships.

The code, which it is hoped will be adopted by most professional organisations, aims to make high-quality internships - long the finishing school of the middle-classes - more accessible for young people from less affluent backgrounds. Currently, the thinking goes, unpaid internships are contributing to stagnating social mobility by blocking access to those without money or contacts.

Broadly, the code has two approaches. First, to encourage ample remuneration for interns, the rallying call of the unions and others who cry exploitation at the unpaid nature of internships. This approach, though well-intended, is misguided. Second, to make such crucial placements openly advertised with a fair, rigorous recruitment process. Fortunately, this addresses the real problem with internships.

The code points to the National Minimum Wage Act, which stipulates that any worker - that is, someone with set tasks and deadlines - must be paid. However, there are, as the code points out, exceptions: volunteers, for example. Willetts knows he is on slippery terrain. So do thousands of employers, especially in sectors such as the creative industries where small businesses reign, who regularly advertise for "voluntary interns".

Luckily, research from the Social Market Foundation suggests the majority of young people from all social backgrounds and regions are not put off from the unpaid nature of internships. In fact, most have done unpaid work experience at some point in their lives. They are exercising choice when undertaking internships, seeing it is as an investment which will accrue greater returns in the long-run: and they're right to make this call, since studies demonstrate that those with work experience have greater employability.

The fact is internships in our top professions are incredibly competitive. You'd expect ambitious, well-qualified young people to apply. So the reason for poor social representation in these internships, first and foremost, is because of the well-documented poorer prior educational attainment of those from less privileged backgrounds. Research suggests that if someone from a less affluent background does do a high-quality unpaid internship, they are hungry for success and so tend to find imaginative ways of being able to afford their placement. Many do part-time jobs in the weekends or evenings or use a bank overdraft.

The unpaid nature of internships is not really the problem. Where internships could be hindering social mobility is that they are still quite informal. If a placement is not properly advertised, those who are better connected - children of parents already in professional occupations - have an advantage, since they can find out about and secure these opportunities through word of mouth. Worse, if internships are not promoted as a formal part of the steps towards securing a career, those who aren't as well-connected will not realise how vital these experiences are.

The best thing employers can do is make sure work experience is open to as wide a pool of young people as possible, by advertising on a single gateway, ensuring fair and rigorous recruitment, and reaching out to as many young people and making them aware of the importance of internships, as proposed by the SMF in our report Disconnected.

Considering young people are making an investment by undertaking an unpaid internship, its vital employers provide a high-quality experience which justifies a lack of pay and offers good returns in the long-term. Again, SMF proposed that best practice internships include inductions, performance reviews, a guaranteed reference letter and the opportunity for a final stage-interview. It's good to see the government highlighting these practices for employers looking to sign up to this new code.

Let's stop fixating on trying to wipe out the unpaid nature of internships. This could do much harm in fact, by reducing the number of employment experiences young people, particularly those from less privileged background with lower educational attainment, can engage with to get a foot in the door.

Instead, let's tackle the real problems: fighting the nepotism that still determines access to our top professions and, much more importantly, improving the educational performance of young people from less privileged backgrounds.