What state is the job in? Is it possible that $12/hr is actually under the minimum wage?
The issue is that the university here has quite the poor CS curriculum, and pumps out a lot of sub par programmers. This company is probably used to taking in interns with zero web dev experience and paying them a low wage (because the student doesn't know better)
My case is a bit different, I feel comfortable with web technologies and will be able to give a lot more. Problem is their proposed salary is just toooooo low.