BY WARREN COHEN
December 9, 1996
The factory in Stillwater, Minn., has all the trappings of the modern manufacturing workplace. Dirt-free floors. Sunny exhortations to remember "safety is no accident" and "attitude is a little thing that makes a big difference." Boxes of metal bike racks stacked up and ready for shipment. Yet there are many not-so-subtle differences. Every employee wears the same gray and white clothing. No one ever arrives at work late or takes a vacation. The pay? Entry-level workers take home about 40 cents an hour. But they enjoy the convenience of a very short commute: It's just a few minutes' walk from the cellblock where they live to the factory housed inside the 15-foot-high iron fences of the Minnesota Correctional Facility.
Through the long centuries in which America has operated prisons, inmates have always worked. Yet for most of this century, selling the fruits of their labor has been restricted to government or nonprofit agencies, to avoid having prisoners competing head-on with American workers on the outside. This accounts for inmates' well-known dominance of license plate production.
But all that is now changing. The explosion of both the prison population (1.1 million today vs. 316,000 in 1980) and the cost of corrections ($25 billion a year) has states scrambling for ways to reduce the burden on taxpayers. Most of the wages inmates earn in prison are taken by the state to help offset the cost of feeding and housing them. But as prisons change from correctional centers to profit centers, the jobs of law-abiding citizens on the outside may be threatened.
Under a pilot project administered by the Justice Department, more than 100 companies have contracted out the use of thousands of prisoners in 29 states. Some of the goods and services involve America's best-known firms. A Washington company used prisoners to wrap software for Microsoft. Inmates in South Carolina made lingerie for Victoria's Secret and graduation gowns for Jostens. IBM has purchased electronic circuit boards made by Texas prisoners, and TWA allows California inmates to take airline reservations over the phone.
In other states, corrections offices themselves are becoming entrepreneurial. In Oregon, the prison authority markets a line of blue jeans. They've even crafted a catchy slogan that would make Calvin Klein proud: "Made on the inside to be worn on the outside."
Today, an estimated 4,000 prisoners work for the private sector. That's a minuscule proportion of the total prisoner population, but the numbers could grow rapidly. There are about 70,000 federal and state inmates currently working on public and nonprofit projects like clothing and furniture who could start producing for the private sector if existing prison labor laws are changed.
Hard labor. New legislation that would do just that may appear in the next Congress. There are already such pressures at the state level. For example, a 1994 ballot measure requires Oregon to employ 100 percent of its prison population. So far, the state has found enough projects to employ only about half of all inmates, but officials are vigorously seeking more private-sector partners. In Minnesota, the $5 million budget for work projects will disappear in the next several years as legislators try to make prison industries self-sufficient.
The existing program requires that prison ventures don't siphon jobs from workers on the outside. In general, companies adhere to the letter of the law, but only because prisons are often located in remote areas where there is no local workforce to compete with. Supporters of the prison labor program argue that the jobs performed by inmates would fall mostly in manufacturing sectors that have gone abroad seeking cheap labor anyhow. "In select industries where America has lost jobs overseas, like shoes and textiles, you could bring these jobs back," says Andrew Peyton Thomas, deputy counsel to Arizona's governor.
But critics contend that job stealing is inevitable. In one notable case, a Texas company, U.S. Technologies, sold off its electronics plant in Austin, Texas, effectively leaving 150 workers unemployed. Then, 45 days later, the same owners opened a facility using prison labor in nearby Lockhart. "This policy is going to take business away from those companies that pay good and drive wages down," says Ed Sills, communications director of the Texas AFL-CIO. "We're trying to be proactive on this issue . . . before jobs are lost."
To prevent private businesses from moving jobs en masse to the prison, companies are required to pay inmates the area's prevailing wage. Even so, because there are no employee benefits to pay, prisoners are a source of cheap labor. For their part, inmates are obligated to return up to 80 percent of their pay to the state. The money goes toward the cost of room and board, child support and victim restitution. Inmates pocket what's left; many buy items that prisons don't supply, like shampoo and deodorant.
Jobs also keep prisoners busy. At Stillwater, officials say the inmates in the facility's east wing are tired at night and much easier to control. In the west wing, where inmates don't have jobs, there are more assaults and more noise. Prison officials also say that work helps the rehabilitation process. Moreover, inmates learn valuable skills that could help them find a job once they leave prison. Ray Meeks, convicted of multiple murders, is grateful for the chance to work. "No one wants to sit in a cell 23 hours a day," says Meeks, who repairs broken tools in the wood shop. "When you put a product together, you get a good feeling that you've done something well." But Meeks, for one, will have to wait to apply his newfound talents in the real world: He isn't eligible for parole until 2034.
Forcing state correctional agencies to become entrepreneurial is not without potential risks. If prison-run business ventures fail, taxpayers could end up spending even more money on corrections. When Wisconsin lured the Fabry Glove and Mitten Co. to its Green Bay prison last June, it used the state's money to purchase cutting machines and industrial sewing machines worth $239,000. The company is paying the state back, but if the venture fails, Wisconsin taxpayers could be left holding the bag. The pressure is on state officials not to let that happen: "If we lose money, then it drains the general fund of the state and I'd lose my job," says Richard Clasby, head of Utah's prison industry operations.
As prison labor becomes more widespread, the bigger concern is that inmates will begin to steal--jobs, that is. Reports that companies are leaving the outside world to set up prison factories could leave American workers wondering if they have to go to prison to find work. After all, 20 years with hard labor--and pay--might not sound so bad to some jobless souls on the outside.
BY WARREN COHEN IN CHICAGO
Copyright 1996, U.S. News & World Report. All rights reserved.