PRISON LABOR: SAVIOR, DEMON, OR DUD?
Another important piece of the prison industrial complex is the exploitation of prison labor by private and state-owned companies. Convict labor, seen as efficient economics and moral just deserts, has developed some powerful champions in recent years, among them Senator Phil Gramm, who said he wants "to turn every federal prison in this country into a mini industrial park." Edwin Meese, former US Attorney General and architect of the Reagan-era war on drugs, has also taken up the cause, editorializing in the Wall Street journal that "The time is ripe to reduce the cost of incarceration by expanding inmate work programs." As early as the 1970s, the conservative Supreme Court justice Warren Burger was calling for prisons to become "factories with fences." Are we poised for a mass expansion in convict labor? Is prison labor driving the big round-up?
Already American convicts toil for private firms making copper faucets, blue jeans, circuit boards for nuclear power plants, and stretch limousines. In San Diego prisoners working for CMT Blues were employed tearing "made in Honduras labels" off T-shirts and replacing them with labels reading "made in USA." Other convicts take reservations for TWA, work at telemarketing and data entry, and slaughter ostriches for export to Europe. In Washington State, Prison Legal News's Paul Wright uncovered evidence that a company called Exmark uses a "flexible" pool of prison laborers to package everything from Microsoft Windows 95 to Starbucks Coffee products, to JanSport gear, and undertake "literature assembly" for telecommunications giant US WEST. Subcontractors for Eddie Bauer and Victoria's Secret have also used inmate workers. Meanwhile in Louisiana, CCA has teamed up with the work-clothes manufacturer, Company Apparel Safety Items (CASI), in the nation's first partnership between a private prison and a private manufacturer.
This current wave of prison labor began with the Federal Prison Industries Enhancement (PIE) Act of 1979, which allowed private corporations to enter 'Joint ventures" with state prisons for the first time since the New Deal. During the 1930s, labor militancy and the moral scandal of Southern convict leasing inspired Congress to pass the Hawes-Cooper and then the more stringent Ashworth-Summers Acts, which imposed local regulation on convict leasing and made it a felony to transport or sell prison-made goods across state lines. But in the two decades since the advent of the PIE program, over fifty different joint ventures have begun in thirty-two states. According to PIE rules, a joint venture must consult local unions before starting up, pay "prevailing wages" (which in practice usually means minimum wage), and must not displace existing employment. Most work in prison pays only pennies per hour, but even in PIE joint ventures 80 percent of the convict's remuneration is taken by the state in the form of taxes, room and board, victim restitution, court fines, and mandatory savings or family support payments. So while PIE inmate workers are "paid" minimum wage they usually only receive between 65 cents and $1.50 an hour.
More numerous than these PIE joint ventures are the state-owned "Prison Industries" which make everything from furniture and clothing, to food, road signs, and computers. Unlike the public-private joint ventures, the stateowned prison industries can only sell to other government agencies. Some stateowned firms, unable to sell to the private domestic market, can pitch their products internationally: one of the few that does is Oregon's UniGroup which sells convict-made jeans called "Prison Blues" in Japan and Italy.
The largest single employer of prison labor - with 18,000 convicts making ISO different products - is Federal Prison Industries, also known as Unicor. The company is state owned and can only sell to other federal agencies, but those markets are guaranteed, carved out for Unicor by law. Currently Unicor makes everything from safety goggles and wiring for Air Force fighter jets, to body armor for the Border Patrol and road signs for the Park Service; in 1998 the firm produced $512 million in goods and services.
Given all this hard work going on in the big house it would appear that America's 1. 8 million prisoners are becoming a Third World within, a cheap and bountiful labor source already being tapped by big business and Uncle Sam alike. Some observers even imply that the corporate desire to harness prison labor is driving prison expansion. But closer examination complicates this picture.
As of March 1998, after almost twenty years in operation, all of the nation's PIE joint ventures combined still had only 2,539 convicts working for private firms. Adding in Unicor workers and all the inmates who work in state-owned industries and local jail industries, and the total number of working inmates swells to 72,000. That is a big number, but it is still less than 5 percent of the entire incarcerated population; and proportionally fewer inmates work today than in 1980. In other words, prison labor, while expanding, is not keeping pace with booming incarceration rates. Thus it is not driving the lockup binge. Given the small number of inmates working and the wide array of products they make, plus the massive amount of press the subject receives (the Internet is filled with hundreds if not thousands of stories about "the new slavery"), and prison labor starts to look a mile wide and an inch deep.
This is not to suggest that prison labor is unimportant; politically and ideologically it is very important. And for the inmates who do the work, issues of fairness and safety are absolutely paramount. But in terms of explaining why the state, at every level and in every place, is so eager to plow people into prison, prison labor is a side show. In short, prison labor is not a great source of profit. For example, in the state sector most prison industries end up costing the government money, or at best break even. This is surprising considering that public prison industries usually pay wages as low as 15 cents to $1.12 per hour. Despite these Third World wages penitentiary work programs - from Unicor to the California Prison Industry Authority (PIA) - almost always require hidden state subsidies and elaborate protections like guaranteed contracts and preferential bidding rules. For example, Unicor's contract "set asides" with federal agencies ensure it up to 50 percent of the market for federal office furniture. In this respect and others, Unicor operates under ideal business conditions; it is guaranteed a labor supply at absurdly low wages, it is given direct subsidies, and has a guaranteed market. Yet Unicor is an economic basket case. If forced to compete with the private sector, it would collapse in a matter of months. Unicor products provided to the Department of Defense, on average, cost 13 percent more than the same goods supplied by private firms . Navy officials say that, compared to the open market, Unicor's "product is inferior, costs more and takes longer to procure." The federal prison monopoly delivers 42 percent of its orders late, compared to an industrywide average delinquency rate of only 6 percent. A 1993 report found that Unicor wire sold to the military failed at nearly twice the rate of the military's next worst supplier. "The stuff was poor quality," said Derek Vander Schaaf, the Pentagon's Deputy Inspector General, adding: "If you can't compete at So cents an hour for labor, guys, come on."
At the state level, 25 percent of correctional industries reported net losses in 1994. But this unflattering number is actually unrealistically low, because many industries that boast of profits in their annual reports fail to disclose the massive subsidies they receive. For example, California's PIA claims to be in the black, but state auditors tell a different story. In 1998 the PIA employed 7,000 of the state's 155,000 prisoners, in everything from dairy farming to computer refurbishing, and operated with the usual pampering of guaranteed markets and obscenely low wages; and like Unicor, the PIA was unable to meet its costs. In fact the PIA is kept on life support, with operating subsidies and handsome capital outlay funding from the state worth more than $90 million.
Nor can the PIA offer savings to other state agencies. The California Legislative Analyst Office found that "state agencies could save $12 million annually if they were free to make purchases from other sources instead of the PIA." Virginia's prison industries, which have become PIE-certified but cannot maintain many contracts, have also been blasted by state auditors for inefficiency and corruption. The financial hemorrhaging of Virginia Corrections Enterprises reaches mind-boggling proportions. For example VCE made pants at an average of $28.19 per pair, but was contracted to sell them to a private firm for $2.50 each. VCE made similar losses on numerous other products."' The company that purchases the pants did quite well but it was taxation, not convict labor, that provided the subsidy.
Even in Texas - where all prisoners must work and none get paid a cent subsidies are the name of the game: the Texas Corrections Industries, with 8,000 convict laborers, is unable to pull its own weight and depends on financial reinforcement from the state. Nor can state prison industries which have sidestepped the PIE program lure in many private partners. In short, prison industries are inefficient.
Such schemes can make money for the private firms that dare to venture inside but returns are rarely generous enough for many businesses to want to stick around. It remains easier and more profitable to do business on the outside. At first this seems puzzling. Decried as slavery by the left, boosted as super-efficient tough love by the right, and exaggerated in scale by both, prison labor is actually a small, not very profitable, part of the American gulag.
There are several concrete reasons why capital avoids the penitentiary. The first is lack of space. In many states day rooms and gymnasiums are filled with bunks, while the yards are full of prefab-dorms, so finding space for business workshops is difficult. Another hurdle is the morally tainted nature of prison-made products. For large corporations with retail profiles, the economics that might be gained in using prison labor are outweighed by the risk of generating bad publicity. Montgomery Ward, for example, has a company charter prohibiting the use of child, slave, or prison labor. Thus most firms that do exploit prison labor are small startups or subcontractors. But even these little fish find that the stigma of using captives as labor can blow UP in their faces. One example of this was the short lived, poorly conceived, apparel company "Inkarcerated" that tried to market prison-made sportswear bearing the slogan: "fitness is a life sentence." Unfortunately for Inkacerated, few retailers cared to be associated with convict labor. The only business to sell the prison-besmirched merchandise was 24 Hour Fitness, the west coast McDonald's of exercise salons. Eventually, Inkarcerated collapsed due to disinterest in its "controversial product."
Fear of lawsuits also keeps business away from prisons; inmates are seen as aggressive and vexatious litigants. Another set of obstacles blocking capital's path into the big house are the COs. In California, business lobbies and the CCPOA often find themselves on the same side of the legislative battlefield. But at the level of specific businesses conducting day-to-day operations in actual prisons, this unity breaks down. Entrepreneurs with manufacturing and telemarketing operations in prison - especially small firms in emerging industries - need flexibility, mobility, and speed. They must move materials and equipment quickly without being searched. Likewise laborers need to operate in a flexible yet punctual fashion. Prison provides none of this. Instead, it provides the exact opposite: a world where bureaucracy, hierarchy, delay, snafus, searches and more searches, and surly centralization of power defines every detail of daily life. Guards are in large part responsible for this culture: they want total control of everything, all the time. As one CCPOA representative put it: "We want to help defray costs and keep inmates busy, but it's our backs that get stuck with the homemade knives when things get out of control."
Thus work in prison is punctuated by frequent pat-down frisks, strip searches, long delays for "count," and arbitrary periods of lockdown in which inmates are confined to their cells for days or weeks at a time. Forget overtime shifts running until midnight, the screws have a schedule all their own.
There are other safety oriented problems that also get in the way. In California, for example, many prisons are surrounded by at least two gates, but CO-supported rules prevent both gates from ever opening simultaneously. This means firms doing business in prisons can never ship products or materials in long tractor trailer trucks, and instead must use smaller delivery trucks. This automatically drives up production costs. Location is also a factor. Many new prisons are in isolated rural areas far from metropolitan markets and transportation hubs. Doing business in such a place means higher transportation costs and more difficulty providing oversight. Even the weather can be a crisis in prison. In California, when it rains hard, drowning out sound, or thick fog rolls in, obscuring vision, all activity on prison grounds halts.
Many of these picayune and invasive rules are the function of prison procedure, but they are exacerbated by the security concerns of the guards. And the prison culture of control can become self-amplifying: control for safety's sake soon breeds control for its own sake. For example, a San Francisco firm called DPAS, after a long and arduous cooperation with the CDC, finally abandoned its data processing and "literature assembly" operations in San Quentin State Prison when COs refused to allow the convict workers to collate slightly pornographic material.
And if such overbearing and puritanical interventions were not enough, there is simply too much cheap, militarily disciplined labor on the outside to make the hassles and irrationalities of doing business in prison worthwhile. With wages as low as 40 cents an hour in Honduras, and generous tax breaks to boot, why open a sweatshop inside some bureaucratic hellhole where you have to pay minimum wage?
The final nail in the coffin of profitable prison work is the poor quality of slave labor. Or conceived another way: the high price of convict resistance on the shop floor. True, many joint ventures can skim the demographic cream and get highly motivated, skilled workers inside prison, but there are just as many malingerers and saboteurs who aren't impressed by 15 cents to $1.50 an hour and who, with some justification, waste their time, steal materials, break equipment, and occupy themselves with their own little side projects on company time. This is particularly true in the state sector, where wages are abysmal. On the outside we catch glimpses of convict dissatisfaction in the form of suits for minimum wage, strikes, and criminal scams run over business phones.