As a recent graduate of an archives and records mangement course I would suggest that even today it is possible to acquire good work experience and improve your employability without undertaking exploitative 'internships'.
Many repositories have strong volunteer and work experience programmes that allow you to volunteer one day, or even half a day, per week; allowing graduates of archive/records management courses or potential graduates (or even well-intentioned do-gooders) to improve employability while also working.
Perhaps instead of offering one person a full-time unpaid 'internship', five people could be offered one day a week. Or shorter one-two week blocks could be arranged over the 3 month period. These options wouldn't solve the problem of too many graduates, or even guarantee interns finding paid work, but would avoid outright exploitation.
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