Rather than worrying about if he should get benefits I feel outrage that an employer can pay someone less than minimum wage. I don't care how great the connections or experience is - all employment offers "experience." If getting experience is a reason to pay an illegal wage, every employer could argue that they offer "experience" and "connections" to their employees. It's exploitive and wrong.
I realize none of this related to the OP and the issue of housing. General recommendation would be to live further away near metro stop or bus route, and have multiple house mates.
I need to stop reading this thread because it gets me pissed off every time I think about it. >:(
As others have mentioned, it's about who benefits more. They can use his help for small jobs around the office, and in turn he gets to get a good look at real-life work in that field. If Uncle Sam stepped in and said "Hey, pay all these interns minimum wage" then these companies would just stop hiring interns. They are not critical to the survival of the company. Now the companies don't get a test run with a potential employee, and the interns don't get experience, and it becomes even harder to find a job unless daddy has some friends.
I think internships regardless of pay amount are extremely valuable to the intern. Yeah getting paid more is great, but ultimately the experience is worth more than the paycheck. Not to mention, the employer doesn't get a whole lot added to their bottom line by having an intern. The interns usually are not skilled enough to save the company buckets of money.
And remember, these are temporary jobs that usually have time limits of about 3 months. Should they offer healthcare and 401k for the three months they work there too? Because not doing so could be considered "exploitive and wrong" as well.