The government should do more to ensure that all interns are paid the national minimum wage, as new research finds employers are continuing to use free interns despite the cost-of-living crisis.
Three employers who entered the Social Mobility Employer Index 2023 offered unpaid internships – a surprising finding since the scheme measures how employers promote social mobility. The Social Mobility Foundation, which compiles the annual index, did not name them but said that it raises fears that the practice is more widespread across the UK.
This year, PwC tops the list for the third time since it was launched in 2017. The Social Mobility Employers Index is once again dominated by the legal and financial services sectors, which account for more than half of entrants.
Thirteen per cent of employers were in the public sector but only two government bodies, the Department for Work and Pensions (DWP) and the Cabinet Office, made the top 25. A total of 143 organisations entered, employing more than a million people.
Alan Milburn, chair of the Social Mobility Foundation, said: “Britain has a problem. Compared with other developed nations we have high levels of child poverty and low levels of social mobility. The perma-crisis of the last 15 years – the global financial crisis, the pandemic, the cost-of-living crisis – has made things worse, not better and it is the younger generations who are paying the price.
“The index shows more employers like PwC, this year’s top-ranked company, recognising that talent is everywhere, but opportunity is not. Their efforts are commendable and are making a difference. But it is shocking to learn some employers are still not paying interns a fair day’s wage for a fair day’s work. The government must take action to clamp down on this practice to ensure opportunities are open to all young people.”
Research by the Sutton Trust in 2018 found that around 100,000 interns working in the UK of whom 58,000 were unpaid.
The National Minimum Wage Act 1998 states that workers are entitled to the minimum wage provided that they have reached school-leaving age and ordinarily work in the UK. The main issue is whether they qualify as a “worker” which they likely will, unless they are only observing or shadowing employees. The act also exempts voluntary workers but this is unlikely to cover most interns who work in commercial organisations.
Alongside this year’s index, the Social Mobility Foundation polled 1,000 young people from lower socioeconomic backgrounds and found that over half (56%) of young people said that making sure internships are paid would allow them to access opportunities away from home, so making the professional jobs market fairer.
Sarah Atkinson, chief executive at the Social Mobility Foundation, said: “The employers represented in this year’s index recognise that the workplace is as important as the classroom for improving social mobility. They are doubling down and are rightly continuing to prioritise social mobility as an investment in the talent of the future.”
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“We urge those sectors who are least represented such as technology, the creative industries and engineering to start taking action. The SMF stands ready to support employers of all sizes in their social mobility journey.”
Kevin Ellis, senior partner at PwC UK, said: “Social mobility, or lack of social mobility, is not only a societal issue but an issue for business and the economy. If opportunity narrows, labour markets shrink, and workforces become one-dimensional.
“We’ve seen first-hand the benefits of improving the diversity of our workforce and are committed to doing more. It’s positive to see so many employers enter the index as we can all learn from each other.”
Ciaron Tobin, 20, who took part in an unpaid internship at a think tank in March this year said: “I had to quit my internship two weeks early as I was unable to afford the cost of living in London as I am from Nottingham.
“This meant I couldn’t gain the experience I needed in the field I am interested in working in. If think tanks want to become more diversified they need to make sure they pay all their interns correctly. For me, this has meant I am now considering working in a different sector that is able to pay me as I now know that I couldn’t take part in another unpaid internship.”
The Social Mobility Employer Index evaluates employers across seven areas: their work with young people, routes into the employer, the attraction of staff, recruitment and selection, data collection, progression of staff and experienced hires, and advocacy.
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