21 March 2016

An internship has, for many young people, become the first step on the road to employment. Yet the value of these experiences can greatly vary between internships. From the perspective of hopeful students, getting their ‘foot in the door’ of a dream job can be a tantalising prospect. However, from the perspective of profit-driven corporations, a rotation of unpaid interns can replace several paid jobs and need not necessarily give any tangible benefit to the intern.

According to advocacy group Interns Australia, the Australian intern landscape is plagued with exploitation. Approximately 86 per cent of internships are unpaid. 60 per cent of internships did not contribute to the student’s formal education. Furthermore, almost 80 per cent of internships did not lead to permanent employment with the internship provider. This paints a bleak picture of the economic utility of the average internship.

Executive director of Interns Australia, Adi Prasad, has publicly expressed concern about how potentially valuable experiences are being eroded by corporate greed.

“An internship can be a fantastic opportunity for an individual to get experience, gain new skills and form new networks, but it cannot be an excuse for an employer to get what amounts to free and cheap labour,” he says.

Students are increasingly willing to undertake internships even if they are unpaid, as they are also increasingly desperate to gain industry experience in a harsh employment environment. It is taking an average of five years for students to transition from full-time study to full-time work. In 2015, only 65 per cent of university graduates were in full-time work compared to 85 per cent in 2008. The prospect of students landing their dream job is, for many, becoming just that – a dream.

Unfortunately, unpaid internships have become an expected part of the working world. In an age where the average entry level position requires several years worth of experience, anyone with any hope of making it in their chosen field is potentially subjected to the greedy and exploitative culture often present in unpaid internships.

It’s an insidious culture that has only recently reared its ugly head. The rate of job creation has fallen well behind the increase in job seekers, with youth unemployment reaching a high of 13.9 per cent in February last year – its highest point since 1998. The tragic state of the current job market coupled with an ageing workforce means that, like seagulls fighting over discarded chips at the beach, people will take anything they can get.

Unpaid internships being undertaken outside of formal education is legally questionable. The Fair Work Act 2009 (Cth) states that internships may only be unpaid if they are a mandatory requirement of an education or training program. The only exempt organisations are not-for-profits. Therefore, the vast majority of internships undertaken by students appear to be technically illegal.

The Fair Work Ombudsman also states that internships should be a learning experience primarily for the benefit of the intern. If the intern is undertaking tasks which would normally be undertaken by a paid worker and therefore the benefit is primarily to the employer, then it is not legally considered an internship.

Additionally, unpaid internships can only be lawful if they form a compulsory part of an education course or if there’s no “employment relationship”. This means, amongst other things, the main benefit of the arrangement must be to the intern, the placement should be of a relatively short duration and the work performed by the intern shouldn’t be integral to the functioning of the business.

Assuming that interns not receiving credit for their degree should be paid at least the minimum wage, an unpaid intern forfeits an average of $5,913.18 in wages during their internship. The impact of that loss is also far greater on young people, as their income tends to be significantly lower, sporadic and subject to significant fluctuation These sound like completely reasonable terms, right?

Companies are being set a fairly low bar here and yet they still manage to limbo under it. In fact, media broadcaster Crocmedia was fined $24,000 earlier this year after severely breaching these guidelines, when a number of interns spent stints of up to a year carrying out work for the company, including producing radio programs and regularly working overnight shifts. One was paid a meagre $2,940 for his efforts, while another wasn’t paid at all. Judge Rietmuller described the actions of the employer as “exploitative.”

This should have been a landmark case but we’ve seen no change. We continue to accept these positions as an entirely normal part of career progression, despite the obvious contravention of both basic morality and federal law.

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There is also ambiguity around the clause that internships may only be unpaid if they are a ‘mandatory’ part of a course. Whilst this could theoretically prohibit unpaid internships taken as elective subjects, universities, including the University of Melbourne, proceed with the assumption that elective internships may still be unpaid if they contribute course credit to the student’s degree.

In some instances, companies have actually begun charging students to undertake prestigious internships. Internships Australia offers to organise internships for students with major Australian and overseas companies for as much as $2,060. This raises concerns about the accessibility of internships for lower and middle class students who cannot afford to spend such large amounts of money gaining workplace experience and possibly undermining a meritocratic job market.

For all the exploitation that has crept into the internship market, there is still a lot to recommend quality, structured internships. Internship programs where the intern is learning and gaining practical experience, whether or not they are paid or contributing to a higher education course, are generally accepted across the business community, with only internships which replace regular paid work raising the ire of unions and advocacy groups.

Many internship programs have been found to demonstrably increase the skills of interns and many have in-built pathways to employment for suitable candidates. For instance, major Australian firms such as KPMG, Ernst & Young and Deloitte, as well as the Commonwealth and state public services all have structured internship programs which lead directly to employment for suitable candidates.

Furthermore, an internship is an impressive addition to a resume which will stand students in good stead for future job applications. A UK study has found that over 50 per cent of employers would not give a job to a graduate with no experience, meaning industry exposure is essential for young graduates.

So the issue is not the potential benefits of internship programs, but the unfair and exploitative manner in which many are implemented. It is easy to argue that people should expect to make sacrifices in order to get where they want to be. But it’s abundantly clear who’s being made to suffer the most here and that’s students from lower socioeconomic brackets – the ones who can least afford to make these sacrifices. Furthermore, with a slew of dodgy deals leaving students out of pocket and with little to show for it, students are right to be wary of the potential for exploitation in a complex and evolving educational space. It’s indefensible that the chances someone has in life should be contingent on their wealth. We like to view Australia as a land of equal opportunity but we’re facing a blatant inequality of circumstance, where these chances are made available to only a privileged few.

The real kicker is, there’s no way to opt out of this system. If you’re a conscientious objector to the idea of unpaid labour, then too bad, so sad. Someone else will take the position and you’ll be left to fall behind the rest of the pack, effectively rendered unemployable. As students, we have no choice but to be complicit in an increasingly toxic culture.

Many opportunities which demonstrate the evolution of this ‘internship culture’ legitimately contain most of the hallmarks of slave labour. Is the work unpaid? Check. Is it work that someone would normally be paid to perform? Check. Are the labourers being coerced into doing it for free, essentially left without any choice? Make that a whole damn trio of checks.


Disclosure: Ben Clark is currently undertaking an unpaid internship at Oxfam Australia.


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