I know I will have a very unpopular opinion here (at least from a management perspective), but let me go ahead.
If this is a true internship, that is a a step on the education ladder, and you are NOT just using the person as “cheap” labor, then I think sub-minimum wage payment could be acceptable - but, there better be someone there who is looking out for the education and the growth of that intern, there should be some sort of official educational component for their time there, and there should be a strict supervisor of their work and some sort of limitation on the hours and level of their involvement. If you are relying on the intern to do the project, that is you can’t do the project without them, then perhaps you should be getting someone else.
After many years of hiring interns for regional theaters, I became a little torn about the purposed of these programs . . . are they just a cheap labor pool in the guise of “learning”? (Luckily, both of the programs I was PSM had a pretty good educational component, and I felt did a good job of moving them along their development). I actually started to change they way I was looking for candidates; rather then hiring the best candidates for the job, often candidates who could get PA positions or ASM positions at other theaters, I would look for Stage Managers Interns with potential, but who were not the complete package - they needed to have room to grow and needed to be ready to work seriously on that growth.
I am flat out against theatre companies hiring an “intern” as the low man on the totem pole for free/cheap labor with out some sort of “official” educational system put in place, and someone looking out for the education - and to be honest, that person should not be the SM of the show (perhaps the PSM of the theatre, but not he SM of the show).
I think one of the ways we can begin to place value on what we do, is to place value on all the members of our team - would minimum wage be too much to ask for for a college educated member of the management team? (Hell, would minimum wage be too much to ask for a college educated leader of the management team on some contracts?)
This is why I think the credit component for the internship is important - it help underlines the importance of the educational nature of the position, but also helps tie to the educational years. When you are a student, you already have other financial support in place to help support you, and you are not relying on the paycheck for the internships (mom and dad, student loans, etc.) I know it’s a pain to transfer . . . and can lead to endless complications. Due to the amount of educational theatre I did outside of school, when I graduated from undergrad I had enough credit to 1.75 times the credits needed to graduate . . . and I was flag as a “career” student - even though I was I only an undergrad for six years - putting myself through school with a child. Not bad.
Now, those first positions after school, often called internships, are still an issue, but many of these either pay enough to eek out a meager life or include housing, and are part of your continued education - but I still feel like they need to have a strong educational component to warrant the low pay.