The New Normal?

28th March 2014

Across the country, around 200,000 final year students are considering their career options. Jennifer Lipman investigates an increasingly common first step on the ladder: the internship.

Last summer, there was shock and outrage when a German intern, Moritz Erhardt, dropped dead mid-way through a gruelling internship at Bank of America Merrill Lynch in London, having worked until 6am for three consecutive days.

Would this be, some wondered, the tipping point: the moment at which employers began to question the legal and moral virtues of hiring interns to perform tasks once completed by paid, contracted staff members and enabling a culture of long hours and little sleep.

Six months on, there is no sign that the internship has taken its last gasp. In truth, though, the financial services industry is no villain here. Banking interns stand to earn several thousand pounds, with the real prospect of a lucrative full-time position at the end. Yet many in the UK’s army of interns take on similarly tough placements without much likelihood of a job – and with no pay at all in many cases.

And army it is, indeed. Of those who have graduated since the recession, only the lucky few walk straight into an entry level job, and even they will likely have spent a summer interning. More and more will spend the first years after graduation bouncing between companies as an intern, either unpaid or for little compensation. “It is now expected that young people should undertake a period of unpaid work before they can enter a career,” says Mark Watson, a long-time campaigner for interns’ rights.

Work experience has long been a way in to certain careers, with journalists and TV set runners, for example, starting out without pay for the promise of a foot on the ladder. But there is a sense of a culture shift, whereby it’s no longer simply about paying your dues or gaining exposure to different industries. Particularly in the arts, but increasingly in fields like marketing and politics, unpaid/low-paid internships have been formalised: as crucial for your employability as A Levels and a university degree. Says Rosie, an unpaid intern in her mid-20s at a small digital media firm: “Looking at similar career trajectories on LinkedIn, it seems internships have become the new normal.”

“There has always been exploitation, but this term ‘internship’ does feel new,” agrees James Hopkirk, editor of arts charity Ideas Tap. “Certainly unpaid internships seem to be increasingly common. People see a way they can get a menial job done for free with this sort of distant carrot of jobs that don’t actually exist.”

So what is an internship, precisely – Unpaid work? A small, barely liveable wage? – and how long should one last? “It’s a word that is now being used to describe everything from work experience to one year contracts,” says James. “Sometimes to dress up unpaid work and imply a training opportunity.”

Part of the confusion stems from the absence of any set legal definition. According to the Arts Council, an internship is not any of the following: volunteering, voluntary work, a student placement, an apprenticeship or work experience. It is, however, any role that makes someone a ‘worker’, which is defined by the Government as anyone with an obligation to perform work for the employer, and thus meaning that interns are legally entitled to the minimum wage – more, that is, than courtesy expenses. As the Arts Council warn, changing the name of an internship does not change the legal position.

Unsurprisingly, many employers ignore the rules; according to the Institute for Public Policy Research (IPPR), thousands of UK organisations ‘rely on unpaid workers’. Given the economic climate, the benefits for bottom-line motivated businesses are clear: free labour and the moral highground of helping someone get their start in business, make contacts and even secure a job.

Mark argues that the growth of the free intern economy is not necessarily a product of the recession, dating it back to at least 2006. “But it seems likely that, at a time when businesses are trying desperately to find ways to survive, this is one of the routes. And it is a tough climate. When one organisation sees another using unpaid labour, you can understand why they might be tempted.”

And for some young people, internships – even unpaid – are genuinely useful to work out if they’ve chosen the right industry. “As the company is small, I was somewhat thrown in the deep end,” says Rosie. “There’s no spending all day making coffee. And I’m gaining some experience, though some days this feels limited.”

More importantly, it’s the Holy Grail for a CV. “I was turned down for internships from the huge agencies solely because I lacked intern experience,” she explains. “Apparently you now need an internship in order to land an internship!”
But the possibility of a permanent job with the company “seems somewhat uncertain”. Worse, she’s got no job security; the internship is for “perhaps a few months then a review”. Yet, depressing as this is, her experience is hardly unusual, and for today’s young graduates, it’s often the only option.

The criticisms of internships have been well-documented of late: unpaid roles are open only to the few – those who have the means to work without a liveable salary, either because they live locally or come from a wealthy background, or who have the connections to secure the best placements in the first place. And, as John Major pointed out recently, ‘the upper echelons of power are held overwhelmingly by the privately educated or the affluent middle class.” According to the Sutton Trust, almost a third of MPs went to Oxbridge, while 54% of top journalists were privately educated. As the IPPR emphasise, ‘many of the sectors in which unpaid interns are most widespread also wield enormous power’, not least politics and the media. Yet internships actively encourage this status quo.

The argument put forward by employers is that an internship strengthens someone’s chances of gaining a job at that company or another. And faced with two CVs, which employer would choose the less experienced candidate? The problem is that it’s often a way for employers to avoid training new recruits – bad for the employee, and not necessarily good for the health of the labour market.

Further areas of concern come when interns spring from placement to placement. “If those are paid positions I think that is totally reasonable, as they are giving lots of people some paid experience,” says James. “But if they keep taking people unpaid, cynically, with no hope of a real job, that’s dreadful. And that’s a real problem at the moment.”
The intern economy also depresses wages, emphasises Mark, because it enables businesses to keep the cost of labour down. “If the person underneath you is an unpaid intern, that is bound to have a negative effect on what you are paid – you are only one step away from being unpaid.”

Sadly, there’s little expectation that things will change. “The minimum wage legislation has been around since 1997; it’s the application [that’s at fault],” says James. “In some cases it’s awareness, companies just don’t know what is legal.” In other cases, it’s done more nefariously.

According to a survey by the Chartered Institute of Personnel and Development in 2010, while around half of organisations pay at least the minimum wage, 28% pay less than the minimum wage and 18% pay nothing. There have been Government attempts to encourage compliance – the taxman sent letters to nearly 500 employers last year warning them that their schemes breached the law – but movement is slow.

“It takes someone bringing people to court over unpaid wages to change things,” James acknowledges. “We’ve seen a few and the companies have lost, but do you want to be that person?” Rosie, who is paid only for travel and lunch, admits “we are both turning a blind eye to any legalities.” Everything she gets comes in cash.

James remains hopeful that when there is a recovery in wages, and it becomes more an applicant’s market, “we may see a change.” Mark, though, is less optimistic. “Unethical employers did this before the recession. It will continue well after the economy has picked up, until someone in authority scrapes that line in the sand.”

Ultimately, of course, the laws of supply and demand prevail, and as long as interns accept the status quo, employers will take advantage. The key is good, well-managed internships with fair access routes, which offer training, a living wage and the real possibility of a job at the end.

And, says Mark, in the past few years “the voices against this situation have got louder”, with groups like Intern Aware and Graduate Fog ensuring that interns are aware of their rights. “What did Bob Dylan say? The times, they are changing – well, maybe!”

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