Unpaid interns: modern day slaves?

Katie Morley outlines the scale of the challenges faced by graduates looking for their first break

"Wow! You're doing an even better job than you should be if I was paying you," were the words that first made Faye White* want to tell her boss where to stick her travel expenses. She is a Russell Group university graduate receiving £6 per day. But just like thousands of other businesses that choose not to pay their interns during tough economic times, Faye's boss is probably unaware that by failing to pay her the minimum wage, he is breaking the law.

Still living with her parents and having not bought any new clothes or shoes for almost a year, the 22-year-old PR executive is one of around 100,000 unpaid interns in the UK. Around 2 million Brits are employed in creative industries, but as a frightening new acceptability around free labour creeps out from the cracks in the failing UK economy, graduates who choose to enter it share concerns they could spend the best part of their young working lives struggling to make ends meet. Pursuing their "dream job" has never come at such a cost.

Since the UK entered recession in 2008, the job market has been knocked for six. The dwindling number of entry-level roles has been swamped by the swathes of young people who want to fill them. And in the stagnant year leading up to this year's double dip recession, the imbalance has become so extreme that working for free has become the norm, with a huge pool of graduates who would once have strolled straight into paid roles, battling it out for a limited number of unpaid internships. In the last year the number of advertised unpaid internships represents nearly a third of the total 280,000 intern positions up for grabs in the UK - a figure that's robustly increasing year on year.

Meanwhile, youngsters in other lines of work face also face a jobs squeeze but continue to make good money. Tim Walker, a 24-year-old plumber from Essex, says these difficulties some graduates are facing only make him more relieved he chose to avoid university. "I know I made the right decision not going," he says. "These kids doing unpaid stuff have student debts - but I don't. People will always need a plumber whether we're in a recession or not, and they wouldn't dare ask us to fix their pipes for free!"

And surprisingly, a number of graduates in other sectors have come out on top - scooping jobs as a direct result of the recession leaving companies with less cash for staff. 23-year-old Richard Booth, a recent graduate and friend of Faye, was offered a £27k per year legal role at the Ministry of Defence, only to discover he'd been brought in as a "cheap replacement" for a highly paid senior worker who'd been made redundant. "I just got on with it," he says.

Faye confesses to feeling like she is being left behind. "Most of my mates who work are earning decent salaries. They rent their own flats and then when we go out drinking I can't even afford to keep up with the rounds of Jager bombs and cocktails they buy. It's depressing."

In her ideal world, Faye would earn £22k per year, but she doubts her current employer - a celebrity PR firm that manages Z-list personalities"¯- could afford to pay her anything close to this if she demanded it. And yet she believes the company would be unable to function properly without free interns (like herself), who currently constitute almost 50 per cent of its staff. "The company is clearly going through tough financial times, but I think it's so unfair that us interns should have to make up their shortfall by not getting paid. I find it demoralising," she admits.

But Lily Lightbrown*, who is currently halfway through a six month unpaid internship at a luxury travel PR firm, says its business appears strong, despite the recession. She's adamant the company could afford to pay her far more than the £50 per week she currently receives. When asked if she thinks she's likely to be offered a paid position after completing the six month period, she says: "I don't know. There's a new girl who's coming in next week, who they seem really excited about - and they say she's perfect for the job. I wouldn't be surprised if they give it to her. That would suck." Lily speaks three languages and graduated from UCL last year - one of the world's top ten universities, according to league tables.

Wage-less working is not something the movers and shakers of today had to endure when they started out, and this might explain their apparent numbness towards it. Unpaid internships were virtually unheard of five years ago, according to Ben Lyons, co-director of Internaware, an organisation campaigning to combat this issue. He says: "Companies have greater financial strains on them than they used to, and they're increasingly looking at new methods to cut costs. This is just one of those methods." And Faye complains that her boss is unable to empathise with the situation and with those like her. "He knows we're all desperate for work, but he doesn't seem to consider why," she says.

So this phenomenon may be new, but a glance back in time reveals how easily the creative industry can crack under fiscal strain. The recession in 1990-92 saw the number of jobs in the creative sector fall by 2.5 per cent, and while the effects of 2008's crash saw losses of"¯3 to 3.5 per cent, the double dip is set to shrink the number of opportunities even further. Economists say this downturn will bring ordinary people a higher dose of pain. It is expected to gouge a much larger chunk of flesh out of the real economy than the last, meaning a reduction in the number of paid jobs. The average forecast for growth is just 0.4 per cent for 2012, with the gloomiest forecasters predicting a decline of 1 per cent. This might not sound much, but compared to the bounce back of up to 5 per cent analysts were expecting after 2008, it looks relatively abysmal.

The Bank of England has even downgraded Britain's 2012 growth forecast, essentially undoing any positive steps the coalition thought they'd made towards reducing unemployment up until now. The real fear among politicians is stagflation - a period in which zero economic growth and inflation occur together - potentially slowing recovery beyond the ten years financial analysts believe it will take to get back to normal.

Unfortunately for Faye, she only has until October before it's crunch time for her career. The money she saved up from a year working as a charity fundraiser will run out, and she'll be forced to take a "reasonably paid", low-level administration job if she hasn't been snapped up by a PR firm willing to pay her a decent wage. But with a glimmer of optimism, she says: "I'm hoping the economy improves so more jobs come up. Then, employers wouldn't think they could hire people like me for free because we're so desperate for the few roles that are there."

Sadly if expert opinion is anything to go by, Faye, along with the thousands of others in her position, could be in for a long and fruitless wait before the job market finally regains its health. They could also find themselves on the wrong side of a stark income divide not only between themselves and their older employers, but also between themselves and peers working in more lucrative sectors of the economy.

The more proactive among them are beginning to take matters into their own hands. In a letter to their boss, demanding improved working conditions for future interns, a girl Faye works alongside writes:

"I pay an extra £10 on top of our £6 a day expenses so I can work here. I'm sure you would not be pleased if you were in our position to pay £50 a week to come in and pick everyone's rubbish from their desks, collect their dishes and do their washing up, more often than not without a word of thanks."

But others feel more despondent, saying they can't imagine a job market where everyone gets paid fairly, so long as they can smell a whiff of austerity in the air. This mood signals that creative industries could be on course for a brain drain if the brightest youngsters cotton onto the gaping pay difference between creative and other careers. Many will get out while they can, while others won't bother at all. And if the ones who persist do strike lucky, then perhaps their friends in paid jobs might buy them a drink to celebrate.

*Names have been changed