Many young people become trapped in unpaid internships amid widespread confusion over whether they should receive a wage, according to a report.
More than one in four graduates have worked an unpaid internship, despite them offering little career benefits, the Sutton Trust said.
The research comes as MPs face a bill to ban unpaid internships that lost for longer than four weeks.
The internships leave them having to rely on their family or friends for money, while many have to get a second job.
Most are unpaid in industries such as the media, fashion, theatre and TV.
New research found that almost a third of staff who work for MPs and peers had done unpaid work.
Both jobseekers and employers are confused about the law, the foundation said.
But under national minimum wage laws, interns must be paid if they work set hours or on set tasks.
Sir Peter Lampl, founder of the Sutton Trust, said: Unpaid internships prevent young people from low and moderate-income backgrounds from accessing careers in some of the most desirable sectors such as journalism, fashion, the arts and law.
This is a huge social mobility issue. It prevents these young people from getting a foot on the ladder.
In order to help tackle this situation internships should be advertised, not offered through informal networks. This locks out the many young people who dont have connections.
The legal grey area around internships allows employers to offer unpaid internships with impunity. That is why the law should be changed.
We are advocating that all internships over four weeks should be required to pay at least the national minimum wage and preferably the living wage.