These are tough times for young people relative to the easy years of the long post-war boom. (Let's remember that these are still good times for young British people relative to other historical eras and many other countries.)
First, there's the squeeze on university places after a decade of rapid expansion. Lucy Tobin describes this well in an Evening Standard comment piece.
Then there's the over-supply of graduates that has devalued a degree in the eyes of some employers. The answer has been to gain a degree along with relevant work experience, hence the growing popularity of internships, as discussed by Jon Kelly for BBC Magazine.
Two problems arise from this. How to pay for higher education, and should students be paid for work experience internships.
The graduate tax suggestion is coming under fire before it's even been proposed (Lord Browne still has to make his recommendations on student fees). One way or another, students will have to contribute more for their education: two benefits of this are that successful universities will continue to compete internationally, and students will value their education more and should expect more of their tutors and institutions, so driving up standards.
A difficult jobs market has encouraged students and graduates to work for no pay. Up to a point, there are mutual benefits to be gained from a 'try before you buy' arrangement – but employers may need reminding to pay up. So a refreshing solution to this problem has been proposed by Michael White, himself a PR student currently on a (paid) work placement.
He suggests paying interns after a certain time period because beyond that they have become experienced workers rather than work experience students. So here's my proposal on a time limit:
Full-time internships should be unpaid for a maximum of three months. After that, the opportunity should be offered to someone else or the intern should be kept on and paid. Part-time arrangements (eg one day a week) could run for six months before pay became expected.
For more on this discussion, here's the recently-updated CIPR work placement charter.
PR Studies 
It’s a tricky situation and I’m shocked at the number of agencies (especially small regional ones) where unpaid interns almost outnumber the paid workers.
However, I don’t think time limits are the answer. My MA students, who carry out a compulsory four-week work placement, reckon that it takes about a month to really get their feet under the table at an organisation. So, with a three month time limit on placements, I can seen some organisations willing to take a month of low productivity in order to benefit from two months of good, solid – and free – work from a hapless intern before tossing them asunder and taking on someone else for three months.
I don’t think that time limits or minimum wages for interns are enforceable or will solve a problem. It’s actually up to clients to probe and question agencies about their use of interns – and to go elsewhere if they feel that the people working on their account are being exploited. Although with my cynical/realist hat on, it would be impossible to organise such a disparate group such as ‘clients,’ who can range from global brands to local pizza restaurants and ball bearing manufacturers.
Thank you for linking to the internship article I wrote.
I think it may take some of the bigger agencies to step forward to take the initiative on this so smaller boutique firms follow.
This way the talented PR graduates get paid, smaller agencies will have to offer some sort of stipend (£800 seems fair). It’s a win/win situation for everyone. Clients get motivated individuals ready to work on something they are passionate about AND get rewarded for it, and graduates get a brilliant experience without being completely broke in cities like London.
Co-sign with Liz that clients is a disparate group.
Kagem Tibaijuka
Founder
vox-popPRcareers
Thanks, both. It’s certainly not easy – and not all employers of PR ‘interns’ are PR agencies/consultancies. Some are large businesses or public sector bodies who are more responsive to following rules and norms.
At present, the debate is polarising into a binary choice in an attempt to outlaw unpaid internships. I agree with Liz that this would be damaging, so the proposal above is an attempt at compromise.