Employers and MPs taking advantage as graduates struggle to find jobs
A government watchdog is to investigate whether companies are exploiting thousands of graduates by employing them on unpaid, long-term internships during the recession, the Guardian has learned.
The Low Pay Commission is expecting to include recommendations on internships in its annual review in the new year amid concerns that companies are taking advantage of the tough jobs market.
A Guardian inquiry has also discovered that MPs could be breaking the rules. Ministers have estimated that unpaid interns work up to 18,000 hours a week inside parliament, a saving of more than £5m a year on the national minimum wage. MPs are each given a staffing allowance of £104,000pa.
Concern has become acute because of the huge numbers leaving university this year without a job. Official figures are likely to show one million young people in total out of work by the autumn.
Under the National Minimum Wage Act, interns who work rather than observe should be paid, but employers have taken advantage of a legally grey area, and the willingness of young people, to pay just expenses, or nothing at all.
This year there has been a rapid expansion of advertisements for internships. The government itself is arranging 4,000 placements for this year’s graduates who face the harshest employment conditions in a generation.
On websites companies routinely recruit for internships, some unpaid or offering expenses only. There were 162 adverts on Gumtree.com featuring the word internship in just one week last month — up 390% on the same week last year. There are also 185 ads for work experience placements compared with 17 in the same week last year.
Wes Streeting, president of the National Union of Students, said: “My concern is about employers exploiting students and graduates for cheap labour. I’m worried about the quality of internships and the way in which people are given opportunities to take them up. People who aren’t supported by the bank of mum and dad are excluded.”
Brendan Barber, general secretary of the TUC, added that employers in the most “glamorous” careers were the worst abusers of internship schemes, which he said excluded those from less well off backgrounds. “Unpaid work has grown in recent years and the recession risks making it an even more attractive proposition for employers,” he said. “In most cases, people doing work experience have a right to be paid the minimum wage.”
David Lammy, the universities minister, said that internships were valuable tool when used correctly. “Internships help graduates kick-start their careers. They are also a good way for companies to identify fresh talent.”
He said that people taking part in the government’s Graduate Talent Pool internship scheme from the autumn, would be fairly rewarded. “We encourage employers to pay a wage which reflects both the value of the intern’s contribution and the level of training and support offeredbut ultimately graduates will need to weigh up the potential benefits,” he said.
The commission’s last two annual reviews have highlighted the problem on exploitative work experience but a spokesman said that the issue would be considered again this year in light of the recession and the increasing potential for exploitation.
Additional reporting by Ben Carter
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