Alvin Hall: Success for sale through celebrity internships

Internships with companies owned by superstars like Jay-Z can be bought for thousands of dollars

Work experience is vital for first-time job seekers looking to impress potential employers but does the trend to sell high-profile internships mean only the privileged get the top jobs?

In their light, open-plan office on New York's Fifth Avenue, the young staff working for online auctioneer, Charity Buzz, are silent and focused on the progress of bids for a placement with the hip-hop artist Jay-Z's record company, Roc Nation.

"People wait until a couple of minutes before it closes," says the company's chief executive, Coppy Holzman.

"It could go for $5,000 (£3,100) or $50,000 (£31,000)."

After some recent success in offering London-based internships through its website, the company is set to open a permanent base in the UK.

In these times when young people are set to be in a worse economic position than their parents, with rising education costs, high house prices and an increasingly competitive job market, buying an early career advantage could become more common in the UK.

"We expect the number of internships to expand exponentially," says Coppy Holzman of Charity Buzz.

"Our highest price for an internship was working with both Sir Richard Branson and hip-hop mogul Russell Simmons, and it sold for $85,000 (£53,000).

"The person that won it has a deep social conscience."

And certainly deep pockets.

The growth of internships in Britain where young people or their families pay for the experience has been controversial - earlier this year Prime Minister David Cameron and Deputy Prime Minisiter Nick Clegg publicly disagreed on the way internships are awarded.

The Labour leader, Ed Miliband, also criticised the Conservative Party for auctioning placements with city banks and hedge funds at a fund-raising dinner.

PM David Cameron and Deputy PM Nick Clegg have different views on access to internships

And in April, the Deputy Prime Minister, Nick Clegg, promised to ensure fairer access to internships as part of his social mobility strategy.

Ben Lyons, from the campaign group Intern Aware, says there is evidence some employers favour the friends and family of existing employees.

The group recently obtained a copy of a letter written to a student who had contacted the legal department at HSBC about an internship or work experience which said:

"HSBC does not have a structured work experience programme although, occasionally, arrangements are made for sons and daughters of HSBC executives, particularly if they work in the Legal or Compliance departments."

"This student was on track for a first class degree from Oxford in Law and yet she wasn't considered," says Ben Lyons.

"This is clearly troubling because a big, big company like HSBC, one would think, would be the most responsible and the best behaved when it comes to this."

The bank told the BBC that it does run paid internships for undergraduates, which are advertised on its website, and paid internships in the legal department open to students of Greenwich University.

They also said there was a clear difference between work experience and internships.

"HSBC recruits from a variety of sources, including referrals from employees. Inevitably there is more demand for jobs than the supply of them. Merit is absolutely always the basis of recruit selection."

Compensation for interns

For young students and graduates lucky enough to find their own placements but without parents to support them, it is becoming increasingly hard to get on the path to paid work.

Twenty-four-year-old James McKay has just started a three-month stint with a graphic design company in east London but he is not sure the £100 a week expenses he will be getting will be enough to support himself.

"I've worked out the figures for the three months and they just don't add up," he says.

"So if the worst comes to the worst, I am going to have to give up this placement and move back north."

And even if James does last the three months, he says he is likely to need more unpaid work before he is offered a salaried position.

"I didn't foresee that what would happen was that placements would come in place of a graduate job," he says.

"They're running these unpaid things 12 months a year, and I think in many cases in place of what would have been a paid job."

Some interns who have given their labour for free are beginning to take action against employers.

Nicola Vetta, 27, made history in 2009 as the first intern to take an employer to an employment tribunal to argue she should have been paid the minimum wage.

She had worked as an unpaid art department assistant for a small film production company but felt the hours required and the responsibility she took on justified a wage.

"A lot of people were very frightened that if they did support me, their career in TV and film would be over," she says.

"But they had put me into a corner so much financially that I didn't think I was able to ever work in this industry again."

In November 2009, Nicola Vetta won her case and was awarded more than £2,000 ($3,250). She now works as a teacher.

In response to that ruling, the National Union of Journalists launched a campaign called Cashback for Interns and it says more than 100 people have been in touch about claiming back wages.

Back in New York, the final bids have come in for the Jay-Z internship, with the winner paying more than $5,000 (£3,100).

But are such internship opportunities working in high-profile companies only available to young people with wealthy parents?

Company chief executive officer Coppy Holzman has a well-rehearsed answer for his critics.

"These people may have deep pockets but they also have a social conscience," he says.

"I sleep really well at night knowing that we provide unusual access to people that do have deep pockets but it's an opportunity for them to give back."

But there is perhaps a final irony.

The proceeds from this auction granting privileged access to the job market are going to a charity supporting young women from disadvantaged backgrounds.

Poorer Than Their Parents will be broadcast at 1200 BST on BBC Radio 4 on Saturday, 23 July and at 1500 BST on Wednesday, 27 July. You can listen again on the BBC iPlayer or by downloading the Money Box podcast.