Comedian Stephen Colbert and guest Ross Eisenbrey, vice president of the Economic Institute, discussed the growing use of unpaid internships as free labor on Tuesday's show. While Colbert treated the issue with his usual satirical approach, Eisenbrey pointed out the real problem of more and more companies exploiting interns as a way to not pay for a growing portion of their workforce.

"When people work for free employers get the idea that they don't have to pay for labor. If Stephen Colbert can get away with it, if everyone can get away with it, I won't pay all of the entry level labor. . . . We have bigger and bigger profits and more inequality than we've ever had in our experience... in the Gilded Age...."

The New York Times reported that the practice is clearly on the rise, although the exact numbers are hard to come by. Numerous reports of unpaid interns fighting back have surfaced in recent years, including a potential class action lawsuit at Hearst publications.

Many, if not most, of the newer unpaid internships are probably illegal:

“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.

Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.

In a separate article, Eisenbrey pointed out that unpaid internships exacerbate class divisions and tend to exclude minorities:

Unpaid internships, in particular, exclude students from poorer families who can’t afford to work for nothing for a summer or a semester, especially after they graduate from college with tens of thousands of dollars of student loan debt. The children of affluent families, on the other hand, can afford to live in the most expensive cities in the U.S., such as New York and Washington, making contacts, building their resumes, and sometimes even learning skills, while their parents pay for their room and board, travel and entertainment. Before even taking into account the family connections that reserve some of the best opportunities for the sons and daughters of the affluent, the $4,000-$5,000 cost of, for example, moving to Washington and living for 10 weeks prevents almost any working class kid from taking an unpaid internship.