There may be more subtle effects as well. In an information economy, productivity is based on the best people finding the jobs best suited for their talents, and interns interfere with this cultural capitalism. They fly in the face of meritocracy  you must be rich enough to work without pay to get your foot in the door. And they enhance the power of social connections over ability to match people with desirable careers. A 2004 study of business graduates at a large mid-Atlantic university found that the completion of an internship helped people find jobs faster but didn't increase their confidence that those jobs were a good fit.
This was a problem I encountered back when I was a bright-eyed collegiate, hoping that working for little to no money was a surefire way to get a job at the magazine/television network/corporate company of choice. Except I only took internships that offered at least SOME pay, meager though it was. But I had friends who worked on movie sets, for politicians, at art galleries, etc. for absolutely nothing. And many of them never saw the fruits of their labor, in the form of an actual paid position, or even by gaining viable work experience. I felt then, as I do now, that New York is a big culprit in this deception. Many undergrads flock to the city for the summertime internship at HBO/Conde Naste/Marketing/Finance and feel that the glory of living in Manhattan is enough to get on the fast track to success.
But if Kamenetz is correct, and these internships reinforce the "power of social connections" over merit, than won't the economy eventually purge itself of such a faulty system? Her conclusion is sensible - the only internships worth having are those that offer some sort of compensation, but that doesn't change the fact there will always be a line out the door of young co-eds waiting to work for Anna Wintour/Sumner Redstone/Ted Tuner for free.
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