Like most recessions, the current one has hit younger folk and lesser experienced folk harder. Typically, companies do not fire more experienced, higher-paid employees in the face of a recession and replace them with cheaper, less experienced workers. Instead, they usually fire and then freeze hiring. It is the younger college graduates that feel the impact of this. The unemployment rate among young folks has risen much higher than among the middle-age. Some young people are trying to get experience by doing unpaid work. they figure that once they have the experience, they will be in better shape to get a paying job.
The NY Times reports that governments of various states are clamping down, fining employees for using unpaid interns. The department of labor has put out guidelines that would make most internships a breach of the minimum-wage laws. In particular, if the internship is not focussed on learning for the intern, but instead is focussed on a benefit for the business, it is in breach of the law. If it can be shown that the work being done by the intern means less work being done by some paid employee, then it is in breach.