5
The Nation January 29,
1996
Business finds the cheapest labor of all:
MAKING PRISON PAY
Christian Parenti
No sooner had California's tough new "three
strikes, you're out" law been passed in 1994 then the
RAND Corporation rolled out reams of dire financial
warnings. Instead of costing $1.1 billion to $1.8
billion a year, "three strikes" would, according to
RAND, cost more than $5.5 billion annually. Endless
prison building would break the bank in California and
nationally.
But now California Governor Pete Wilson and other
officials around the country think they have found a
way out: Harness the vast pool of idle inmate labor in
the hope that overcrowded prisons can soon pay for
themselves. Since 1990, thirty states have legalized
the contracting out of prison labor to private
companies. In Arizona -- where, according to the San
Francisco Chronicle, 10 percent of all inmates work for
private companies and make less than minimum wage --
prisoners test blood for a medical firm and raise hogs
for John's Meats. In New Mexico prisoners take hotel
reservations by phone. In Ohio inmates do data entry;
they made Honda parts as well until political pressure
from labor unions forced an end to that particular
arrangement. Spalding golfballs are packed by
imprisoned labor in Hawaii. In Lockhart, Texas, inmates
held in a private prison owned by the Wackenhut
Corporation build and fix circuit boards for L.T.I., a
subcontractor that pays $1 a year in rent and supplies
companies such as Dell, I.B.M.and Texas Instruments. In
1994 a Chicago-area Toys R Us used a night shift of
prisoners to restock shelves. The list goes on.
Some of these companies pay minimum wage, but
prisoners see only about 20 percent of it; the rest
gets siphoned off by state governments or private
prison managers -- mostly for room and board,
restitution to victims, family support and taxes.
"We have a captive labor force, a group of men who
are dedicated, who want to work. That makes the whole
business profitable," says Bob Tessler, owner of DPAS,
a company based in San Francisco that three years ago
sold a maquiladora in Tecate, Mexico, and opened up a
data processing operation in San Quentin State Prison.
DPAS is one of many firms that are taking advantage of
cheap inmate labor and tax breaks under California's
five-year-old Joint Venture Program.
Proposition 139, approved by voters in 1990, first
allowed private firms in California to use imprisoned
labor to make and sell products on the open market. In
the past, prison labor was confined to producing goods
for government consumption; the sale of prison-made
commodities on the open market had been illegal in the
state since the 1890s. But since 1991, when the law was
formally changed, joint ventures with private industry
have made millions of dollars in profits for business
and have provided the California Department of
Corrections with $1.3 million in room and board from
working prisoners' wages and taxes. Still small in
scale -- employing 200 inmates under contracts with
thirteen firms -- the Joint Venture Program touts
itself as "the future of corrections."
The kinds of work now contracted out to prison
labor run the gamut from high-tech drudgery to
shoveling hog manure. DPAS, for example, employs
eighteen prisoners in San Quentin doing data entry and
"literature assembly" for firms such as Chevron, Bank
of America and Macy's. In Ventura, young inmates make
telephone reservations for T.W.A. at $5 an hour; the
same work on the outside, when unionized, pays as much
as $18 an hour. In Folsom, prisoners work for a private
recycler, a plastics manufacturer and a brass faucet
maker. They also make steel tanks for micro-breweries.
In Aveala State Penitentiary, twenty-nine inmates on
minimum wage raise hogs and slaughter ostriches in a
custom-built abattoir for export to Europe at $40 a
pound. Incarcerated workers also make circuit boards,
do telemarketing and operate a message service. In
other states inmates make everything from custom
limousines to underwear, from military uniforms to
Salvadoran license plates.
The benefits of such joint ventures to private
industry are numerous, as businessmen like Tessler
readily point out: "We don't have to pay health and
welfare on top of the wages; we don't have to pay
vacation or sick pay." DPAS also gets a 10 percent tax
credit on the first $2,000 of each inmate's wages.
Inmates working in the California Joint Venture Program
receive minimum wage, $4.25, minus the 80 percent that
is garnished. In other states, prison wages are even
lower. In Colorado, AT&T paid fifty inmate
telemarketers $2 an hour. In Washington State, thirty
female prisoners sew a thousand sweatshirts a week for
prison-labor contractor Joan Lobdell, who makes deals
with clothing companies like Eddie Bauer and Union Bay.
The incarcerated women are paid a per-piece rate that
is supposed to equal minimum wage but, as on the
outside, this depends on a worker's speed. What is
skimmed from the women's wage "helps offset the cost of
corrections," says Lobdell.
Many states, most notably Florida and Oregon, are
also making their own profits from prison labor. In
Oregon prisoners are now forced to work because of a
1994 state constitutional amendment called the Inmate
Work Act. "The taxpayers love it," says Brad Haga,
former spokesman for Oregon Prison Industries. "We've
got guys paying six thousand bucks a year in rent for
their cells."
Oregon Prison Industries, otherwise known as
UniGroup, is a state-run company, but unlike most state
prison industries it does not limit itself to making
desks for federal bureaucrats. Last year, according to
Haga, UniGroup's aggressive marketing tactics sold $4.5
million worth of "Prison Blues", a convict-made line of
blue jeans. The California Department of Corrections is
also trying to find a niche in Japan's jeans market
with its new line of "Gangsta Blues." In an odd twist,
the much deplored hip-hop culture of African-American
and Latino youths is now being appropriated, glamorized
and sold back to the public by the very criminal
justice system that claims to wage war on the insidious
threat of gangsta culture.
UniGroup's Prison Blues catalogue is enough to
leave even the most cynical mouth agape. Printed on
"100% recycled paper," the catalogue -- its cover
portraying an escape rope of knotted blue jeans hanging
from a prison window -- is a combination of hip,
socially conscious business babble and blatant MTVesque
gangsta glorification. Tastefully muted images of
handsome ("real") inmates (tattoos and all) are
juxtaposed with large white- on-black quotes: "I say we
should make bell-bottom jeans. They say I've been in
here too long." Charles Denight of Dalbey & Denight,
UniGroup's marketing agency, says, "We try to stay away
from the bad-guys jeans sort of thing. We'd rather
people felt like they're doing the right thing buying
these jeans."
As you might suspect, it is cheap labor, not
social responsibility, that fuels the rise of for-
profit prison labor. While wages in Mexico or Adrian
countries, where DPAS sent half its work from the
Tecate maquiladora -- are far lower than the U.S.
minimum wage, joint-venture businessmen say that
prisons offer other incentives. "Here we don't have a
problem with language, we have better control of our
work and, because it's local, we have a quicker
turnaround time," says Tessler, comparing his San
Quentin operation with the one in Tecate.
There is yet another benefit: no strikes or union
organizing. In fact, prison labor has been used to
break or avoid strikes. T.W.A.'s reservations operation
in the Ventura Youth Facility -- which predated
Proposition 139 but was allowed to open because
juvenile prisons are exempt from many state laws -- was
set up during a strike by T.W.A.'s unionized flight
attendants in the mid-1980s. The extra capacity
provided by the Youth Facility's labor scheme allowed
the airline to transfer ticket agents to flight-
attendant positions. According to Richard Holober,
assistant research director for the California Labor
Federation, "This indirectly, but very definitely,
allowed the airline latitude in replacing strikers. The
prison labor, and therefore the state, subsidized the
strike-breaking effort."
More broadly, prison labor further undercuts an
already deteriorating wage market. Jack Henning,
executive secretary-treasurer of California's
Federation of Labor, charges that in the Bay Area the
prisoners' minimum hourly wage for data entry
destabilizes higher-paid labor on the open market. The
1991 law authorizing joint ventures stipulates that
industries first consult local unions before setting up
shop in a prison. But, according to Henning, "they
rarely do."
It is precisely prisoners' lack of political
rights that makes them such a profitable labor force.
In San Francisco, Vincent Schiraldi of the Center for
Juvenile and Criminal Justice worries that the
"continuing hardening of criminal justice" will lead to
prison labor abuses: "All over the country states are
stripping inmates of their rights. They're losing
everything from TV to First Amendment rights. What
other labor pool has no access to the media, labor
organizers or other community groups?" Luis
Talamantez, one of the San Quentin Six, has been a
prisoners' rights activist from both the inside and the
outside. He says that political organizing in prison is
almost impossible: "If you don't work [in prison] you
can count on violent retaliation. I struck and was
thrown in the hole. You can't unionize under conditions
like that. Prisoners want to work, but nobody wants to
be exploited."
The inmates employed by DPAS doing data entry are
indeed grateful for the chance to work. "The [state-
run] prison industries pay 30 cents an hour, and a can
of tuna fish costs 95 cents at the commissary," says
John, an unlucky drug dealer now working at DPAS's San
Quentin shop. "The food at the chow hall is really
outrageous, so if you want to eat well or smoke you're
thankful to get a joint-venture job." One DPAS employee
said he had saved almost $7,000 in the past two and a
half years while working at two different joint
ventures in San Quentin.
Indeed, compared with the rest of life in San
Quentin, labor in the Joint Venture Program is
attractive. Many cells in the prison are a mere four
feet wide and ten feet deep. Built to house one, all of
these contain two men and a double bunk with only a
narrow walkway, the width of a man's shoulders, to the
toilet at the back of the cell. The prison is at 200
percent capacity. To prevent communication between
cells the bars are covered with a dense metal grill,
leaving most cells dim and stale. Under such
conditions, working all day at a computer for the take-
home pay of $150 to $200 a month strikes most prisoners
as a good deal.
Private contracting of prison labor has not taken
off quite as quickly as its more ardent proponents had
hoped. The California Department of Corrections still
subsidizes the Joint Venture Program to the tune of
$980 per inmate per year, according to the Office of
the Legislative Analyst, though J.V.P. expects to break
even as soon as it lures a few more firms and raises
its roster of incarcerated workers to 300. However,
Oregon's UniGroup is turning a profit, thus beginning
to realize the goal of self-sustaining prisons.
In the end, prison labor is unlikely to save
government from the overwhelming cost of the
incarceration explosion. States will always run prisons
at a tremendous loss, but a few firms like DPAS will be
making out like -- excuse the phrase -- bandits. In the
meantime, prisons are rapidly becoming maquiladoras in
our midst.
