Anya Kamenetz, the author of the book Generation Debt, has an op ed piece in today's New York Times about unpaid internships.
This fits in with a theme of my recent blog posts, that young people are worse off today than they were in the past. In the past, students' summer jobs would pay them money. Today they work at unpaid internships, or sometimes even pay for the privilege of working for free. Ms. Kamenetz is correct that a pool of educated but inexperienced laborers willing to work for free will depress wages for the educated but inexperienced who actually seek to make money.
Given the importance of one's first job, it's a sensible career strategy to take an unpaid internship. Young people need to do whatever it takes to build up their resume so they can get on the correct career track. Ms. Kamenetz is therefore wrong to advise young people not to take unpaid internships. (Although if everyone refused to work for free then everyone would benefit: an example of a prisoner's dilemma.)
The new trend towards unpaid internships creates another class divide because rich parents can afford to pay for their children to work for free in expensive cities like New York while children of middle class parents have to work in a paid job which doesn't advance their career. Furthermore, the middle class values of the middle class, who believe in the virtues of "hard but honest work," tend to torpedo the future career prospects of their children.