Albion Monitor /News
[Editor's note: see also "Doing Time, 9 to 5" elsewhere in this issue.]

Prison Labor Boon for Employers, Report Says

by Jeff Elliott

In some situations, the companies "lease" prisoners from the state

Claiming that "everyone benefits from joint ventures," a new report published by the National Institute of Justice calls for American manufacturers to use more prison labor to keep costs low and stay competitive, as well as providing inmates with a taxable income.

The report, "Work in American Prisons: Joint Ventures with the Private Sector" reviews companies that employ convicts in California, Connecticut, and South Carolina. In some situations, the companies "lease" prisoners from the state, much like a temp agency. Other companies operate branches of their businesses behind jailhouse walls, with space provided by the prison. Still other companies contract with prisons to have inmates produce piecework at a set price.

"We can put a 'Made in the U.S.A.' label on our product"

In successful programs, the report states, prison officials show their committment by "going the extra mile to solve the practical, everyday problems" of using prison labor.

For a South Carolina prison, that means relaxing security rules so that delivery trucks could drive on prison grounds instead of waiting at the main gate. In California, educational courses were added specifically to prepare inmates for operating TWA reservation terminals.

All companies interviewed by report author George E. Sexton, President of Criminal Justice Associates (CJA), said they were pleased with their prison workers. According to the study,

Companies are attracted to working with prisons because inmates represent a readily available and dependable source of entry-level labor that is a cost-effective alternative to work forces found in Mexico, the Caribbean Basin, Southeast Asia, and the Pacific Rim countries. "Domestic content is an important benefit of using a prison-based work force compared with using an offshore labor market," says one industry executive. "We can put a Made-in-the-U.S.A. label on our product. In fact, our sales staff told us that the retention of these jobs in the United States influenced purchasing agents at two large organizations to buy our product rather than a competitor's whose product is made offshore."
Escod Industries, a division a Fortune 400 company, uses prison labor in South Carolina to assemble electronic cables. Last year, inmates produced $16 million worth of electronic cables that were purchased by corporations like IBM and the Canadian-based Northern Telecom Corporation.

Before a state official contacted the company, Escod was planning to have the work done in Mexico, "that would use the country's highly productive and low-cost Maquiladora work force." Instead, the state showed the company that prisoners could produce the cables cheaper, with a total cost of $6.04 per hour including expense of shipping final products back to the company.

Another company satisfied with their incarcerated workers is TWA, who uses about 70 inmates at California Youth Authority's Ventura Training School.

The report quotes Jeff Black, TWA's Director of Area Reservations as saying, " Ventura, once we've trained an agent in this kind of specialized service we know that he is more likely to show up regularly for work... we know that they are not going to be late for work because of a traffic jam on the freeway. That kind of dependability is important to us."

Black points to the riots that followed the 1992 Rodney King verdict as an example of why this dependability is important. In the two days while the main Los Angeles office was closed, "61 youthful offenders worked 718 hours processing calls from travelers who would have otherwise been lost to TWA's competitors."

Laws changed in 1979

According to the report, private sector involvement in prison industries was common during the early part of this century, as prison factories turned out goods for businesses. Competitors and labor unions protested, and open market sale of prison-made goods was prohibited in the 1930's.

The current revival of private sector prison industries was made possible in 1979 when Congress lifted its ban on the interstate transportation and sale of prison-made goods, the study notes. Prisons were required to follow rules set by the specially created Private Sector Prison Industry Enhancement Certification Program (PS/PIEC), such as that inmate workers were paid local prevailing wages, and that the interests of other parties that could be adversely affected by the joint venture were protected.

Between 1979 and 1992, inmates employed in joint ventures certified by the U.S. Department of Justice earned $28,668,450.

Justice Department statistics show that $.41 out of every dollar earned was returned to society. Of that 41 cents, roughly 20 cents went to pay for their own incarceration and 11 cents went to state and federal taxes. The remaining dime was split fairly evenly between victim compensation and support of the convict's family.

The full report can be found at the National Institute of Justice web site.

Comments? Send a letter to the editor.

Albion Monitor March 10, 1996 (

All Rights Reserved.

Contact for permission to reproduce.

Front Page