New research published today by the Sutton Trust reveals a growing gap between working-class and middle-class graduates in getting into increasingly important internship routes into careers.
This, they say,is driven by employers continuing to underpay interns and to give opportunities to family and friends rather than advertising them.
The research comes as the Government is expected to announce tighter controls on the illegal practice of companies asking interns to work for free or below the minimum wage.
A poll of recent graduates, conducted by Public First for the Sutton Trust, shows that over half have undertaken an internship, a growth of 12 percentage points since 2018. A quarter have taken part in multiple internships. Graduates in London were significantly more likely to have undertaken an internship than those in the West Midlands, Yorkshire, Scotland and Wales.
Polling of employer HR decision-makers conducted by YouGov for the Sutton Trust reveals that almost three fifths of those surveyed 56 per cent now offer internships, up from 48% in 2018, indicating the growing importance of internships as a route into professional careers. Almost a third of graduates say they were only able to access their current job thanks to their internship.
However, the gap between working-class graduates and their middle-class peers in accessing internships has widened substantially since 2018, now standing at 20 percentage points compared to 12 percentage points in 2018. The proportion of working-class graduates completing an internship is now 36% compared to 55% for their middle-class peers.
Internships are currently covered by general employment law, which states that an intern is entitled to the national minimum wage (NMW), as well as other entitlements, if they are classified as a ‘worker’. The definition of a worker includes somebody who has a contract and is carrying out any work as opposed to just observing.
However, confusion over the law and a lack of enforcement means some employers are escaping sanction for offering unpaid or underpaid internships for work that should be covered by minimum wage law. Most current unpaid or underpaid internships are likely illegal under existing regulations, but the current system relies on interns themselves reporting non-paying employers.
Despite the legal position, around three fifths of internships undertaken by recent graduates were ‘unpaid or underpaid’, down only slightly since 2018.
Just below a quarter were paid less than the minimum wage, while 17% came with expenses only and 21% had no compensation at all. Middle-class graduates are more likely than those from working-class backgrounds to have completed an unpaid or underpaid internship (37% compared to 28%).
Graduates who undertook unpaid internships were able to do so because they received money from parents (40%), lived at home or with family or friends for free (39%) or used savings (29%).
Almost half of employers say they offer internships paid at least at the minimum wage, while the proportion offering internships paid below the minimum wage has increased from 11% in 2018 to 17%. 9% say they offer internships without any compensation, a slight increase since 2018.
However, three quarters of those providing internships say a ban on unpaid internships would not impact the number of opportunities they provide, and just 8% say they would need to substantially reduce the supply of opportunities. The majority want to see change on this issue. 38% would like to see unpaid internships banned while 30% would like to see better enforcement of current minimum wage legislation.
Today’s data also shows that the majority of internships are not openly advertised for anyone to apply to. Internships were almost twice as likely to have been found through family and friends in an organisation (20%) compared to an advertisement (11%), while a fifth were sourced via proactive approaches to an organisation. Working-class graduates and those with less social capital were less likely to access internships via networks.
Nick Harrison, Chief Executive of the Sutton Trust, said:
‘Internships are an increasingly critical route into the best jobs, and it’s shocking that in this day and age, many employers still pay interns below the minimum wage, or worse, nothing at all. They should be ashamed. The Government has pledged to ban unpaid internships, which is absolutely the right thing to do. Clearly not all young people can get support from the bank of mum and dad so banning this outdated practice will help to level the playing field for these valuable opportunities. It’s a no brainer and should be implemented without delay.
‘As well as paying interns properly, there’s also a whole lot more that employers must do to make sure they’re accessing a wider pool of talent, such as advertising internship opportunities rather than taking in family and friends of their existing staff or biggest customers.’
