The hidden costs of unpaid internships

Unpaid internships cost young Europeans over €1,000/month, deepen social inequalities, and exclude vulnerable youth; the EU needs to implement binding laws to ban unpaid internships and provide quality internships for everyone, writes Mark McNulty.

Mark McNulty is a Board Member of the European Youth Forum.

What would you do if your dream job would require two academic degrees, a year of prior experience, and more than €12,000 available to cover your own salary and costs? 

In the decades since the 2008 financial crisis, internships have become a rite of passage for many young people across the world. The European Parliament estimated that approximately half of all 15-34 year-olds have gained work experience in at least one traineeship in their careers. 

But as unpaid internships outside of educational curricula are becoming increasingly pervasive, so does the harm that they inflict on our societies. 

In a new study by the European Youth Forum, “The Costs of Unpaid Internships”, 77% of the respondents said they have undertaken unpaid internships. Among this group, one in three young people carried out two unpaid internships.

The research also found that, on average, young people suffer a loss of over €1,000 for each month of unpaid work they take on. In 11 EU countries, this figure was even higher, including Italy (€1,067 per month), France (€1,263), Belgium, and Ireland (around €1,300 each). Luxembourg is topping the list, with a cost of €1,841 per month. 

This monthly cost of unpaid internships was calculated based on the estimated lowest-possible expenses of a single young person on a budget (a “ramen noodles only” budget). But the bill does not stop there. 

Unpaid internships also cost our societies, since they are deepening social inequalities. Young people from vulnerable backgrounds – people with disabilities, with lower education levels, with a migration background or those living in a single-parent household – are eight times less likely to be able to afford unpaid internships. 

Employers who offer unpaid internships effectively discriminate against young people from vulnerable backgrounds, by blocking them from entering professions and sectors which rely heavily on internships as the first career step. 

Ultimately, internships also impact the employers themselves, who are missing out on the talent and perspective of a more diverse group of employees.

In 2014, the Council of the European Union adopted a non-binding recommendation on a Quality Framework for Traineeships, aimed at promoting several principles, notably ensuring that every trainee received a written agreement, the support of a mentor and clear learning and training objectives. 

At the time, the EU failed to include clear recommendations on remuneration and social security protection. The non-binding nature of the Quality Framework also undermined its effectiveness and impact.  

Today, after two years of lockdowns and a cost of living crisis, the situation of young people remains dire. One in four European youngsters is at risk of poverty and social exclusion. 

To make up for the lack of income some unpaid interns rely on their families for financial support or continue to live with their parents to reduce costs, while others find additional jobs in the service or gig economy, leading to excessive working hours. Either way, unpaid work has a negative impact on young people’s well-being and mental health. 

The survey respondents reported a strong sense of exploitation, causing stress and burnout. S., one of the participants shared: “What nobody thinks about is the chronic state of stress and how many sacrifices I did to get myself afloat both mentally and economically.”

S. is not alone. In 2018, the Sutton Trust identified that 27% of young people in the UK were taking paid work alongside their unpaid internships. 

Lack of awareness of their rights, fear of retaliation and of limiting career progress also make it harder for young people to report abusive practices. This negatively affects young people’s mental well-being. 

Unpaid internships are holding back an entire generation, while employers are enjoying the fruit of free labour. Interns are a highly motivated workforce, as they wish to quickly adapt and demonstrate their knowledge and skills in the hopes of getting a job contract afterward. 

The principles set in the Quality Framework already lay the foundation for better internships across Europe, but there is so much more that still needs to happen. 

Remuneration is the key criteria defining a high-quality traineeship. 

According to the European Commission’s review of the Quality Framework, 84% of the interns surveyed considered being paid the national minimum wage important or essential. 

For the next generation to escape the crushing impact of the cost-of-living crisis, Europe has to act fast. We cannot afford to set the cost of this crisis on young people, as they struggle to secure dignified jobs. It is in everyone’s interest to ban unpaid internships and ensure equal access to the labour market for all young people.