The Journal of History     Summer 2008    TABLE OF CONTENTS


Prison Industry Exploits Inmate Labor

By Bob Sloan
Prison Reform Activist
Member of LOLITS
February 8, 2008

Submitted by: gndlf1 on Thu, 02/07/2008.

In the United States state and federal prisons have utilized inmate labor for decades. In the past this labor consisted of making license plates, cleaning up roadsides and manufacture of mundane products such as brooms, mops and food products used by the prisons and other state/federal agencies. Until 1979 these industries were prohibited from selling, distributing or otherwise making their prisoner made products available to the average consumer - commercial or private. The reason for the restrictions on sale or distribution of prison made goods was to keep prison industries from competing against private sector businesses on the open markets. Prison products were manufactured using unpaid inmate labor and as a consequence the products were cheaper and private sector companies would not be able to compete with pricing. Federal laws then - and now - that control the sales and shipments of prison made goods are the Ashurst-Sumners Act (18 U.S.C. 1761(a)) and the Walsh-Healey Act (41 U.S.C. 35). Both of these federal Acts prohibit the sale of prisoner made goods across state lines, outside the U.S. or sale of products in excess of $10,000 to the U.S. Government or any of it's agencies. In 1979 the U.S. Congress enacted legislation to loosen the restrictions on sale and shipments of prisoner made goods, products and services. This legislation was the: Justice System Improvement Act of 1979 (Public Law 96-157, Sec. 827) and continued indefinitely by The Crime Control Act of 1990 (Public Law 101-647 and Title 18 U.S.C. 1761(c)). The program is the Prison Industries Enhancement Certification Program (P.I.E.C.P. or commonly referred to as PIE Program).

The PIE Program allows participating prison industries to offer their wares and products to individual companies, corporations and general consumers, where previously their sales had been restricted to state/federal agencies, departments or qualifying state/federal affiliated non-profits. In order to participate in the PIE program, the industries must comply with nine (9) mandatory requirements:
1. Legislative authority to involve the private sector in the production and sale of prison-made goods, and administrative authority to ensure that mandatory program criteria will be met through internal policies and procedures.
2. Legislative authority to pay wages at a rate not less than that paid for similar work in the same locality's private sector.
3. Written assurances that the PIE Certification Program will not result in the displacement of workers employed before program implementation.
4. Authority to provide worker benefits, including workers' compensation or its equivalent.
5. Legislative or administrative authority to take deductions not to exceed 80 per cent of gross wages for room and board; taxes (federal, state, local); allocations for support of family pursuant to state statute, court order, or agreement by offender; and contributions of not more than 20 per cent, but not less than 5 per cent of gross wages to any fund established by law to compensate the victims of crime.
6. Written assurances that inmate participation is voluntary.
7. Written proof of consultation with related organized labor before PIE Certification Program startup.
8. Written proof of consultation with related local private industry before PIE Certification Program startup.
Compliance with the National Environmental Policy Act and related federal environmental review requirements.
The foregoing mandatory requirements were included in the PIECP Act to ensure that prison industries and private sector industries would compete on a "level playing field" in both the manufacture and sales of goods and products. This allowed the "unfair competition" that had been complained of by private sector businesses to be overcome. The program was to encourage private sector companies to "partner" with prison industries and thereby allow prison labor to be used by these partner companies to manufacture their goods or provide their services. Under the partnership aspect of the PIE program, numerous private sector corporations closed their private sector plants and facilities and moved their operations inside prisons. This closure of operations often resulted in the loss of jobs in the private sector(s) causing an increase in applications for state and federal aid via Medicaid, unemployment benefits and other state offered benefits.

On the surface the typical person would applaud this program as covering all bases. Inmate idleness is reduced, inmates are trained and prepared for release, private sector manufacturers can participate by allowing inmates to learn while making their products, a wider variety of products are made available to the public, private corporations and the Government and the taxpayers save money by allowed deductions for room and board from inmate wages.

However, the PIE program is being abused by the Prison Industries themselves, their private sector business partners and the organization chosen by the Department Of Justice to oversee the program. The DOJ's Office of Justice Programs (OJP) has authority to operate and oversee the PIE program. They utilize the services of the Bureau of Justice Assistance (BJA) to actually run the program. The BJA is responsible for determining Certificate eligibility of the various prison industries that wish to participate, oversight, handling non-compliance investigations and enforcement of the mandatory criteria.

The BJA - through a grant - has funded a private, non-profit organization, the National Correctional Industries Association (NCIA) to perform all of the duties assigned to the BJA for the PIE program: oversight, investigations of non-compliance or violations and annual assessment reviews of the prison industry programs operated under the program.

The NCIA is composed of a huge membership of individuals and groups who represent the various prison industries -state and federal, and the vendors and suppliers of prison industry materials and services. Individual prison industry administrators, industry supervisors and other prison industry staffers sit upon the NCIA Board of Directors. They establish policies, conduct reviews and actually inspect associated prison industries for compliance.

The "partnership" between the BJA and the NCIA has resulted in the "fox guarding the henhouse." The prison industry employees and their vendors are responsible for overseeing the operations and compliance of their own industry programs. Consumer complaints of violations of the program to the DOJ, OJP and the BJA are all referred to the NCIA by those agencies. The NCIA ignores all complaints of non-compliance, refuses to investigate allegations and ultimately refuses to enforce the mandatory criteria of the program.

The second mandatory requirement is for the payment of prevailing wages to the inmate workers in the PIE program. The industries fail to abide by this requirement. Instead of prevailing wages, they insist that payment of the federal or state minimum wage satisfies this requirement. The 1999 PIECP Final Guidelines addresses this wage issue in depth and finds that paying the minimum wage does not fulfill the requirement mandated by the law. Disregarding this finding by the BJA, the NCIA continues to find prison industries in compliance when minimum wage rates are paid to inmate workers regardless of length of employment in the industry, experience or knowledge of the operation(s).

In many cases the prison industries now use the PIE program to authorize the partnership with private sector manufacturers that sell products within the states where the prison industries are located. Ignoring the mandatory provisions, the prison industries insist that PIE products sold within the state borders are exempt from the mandatory requirements of prevailing wages, and they or the "partner" pay the inmates between $.20 and $1.00 per hour for their work. In addition, they lease the factory space to the "partner" for as little as a dollar per year. These two violations clearly provide the prison industry "partners" to enjoy a considerable advantage over competitors who manufacture their goods using non-prisoner labor and have to pay expensive property or building leases or mortgages. As an example read: "PRISON LABOR A Factor In Shutdown Of Plant," This article clearly demonstrates that prison industries ignore the requirement that their operations not affect private sector manufacturers or result in the loss of private sector jobs.

In conclusion, it is apparent that the Prison Industry has created a workforce comprised of incarcerated inmates who are required to work for wages determined by the prison industries themselves. Where payments of prevailing wages are required, the industries and their partners pay pennies on the dollar for the labor of the inmate workforce. While it would be easy to shrug and say, "These are convicted felons, why should we care about how little they are paid to work?"…the result of the program violations affect us all. If we work in the manufacturing field, our jobs are slowly being taken over by the prison industries. While this is happening, our wages are decreasing due to the inability of our employers to compete with the prison industry that offers the same products for less.

In addition, each of us as taxpayers, make up the difference between what should be paid to the inmates and what is actually paid by the prison industries. We do that in the form of public tax dollars paid through appropriations for the annual operations of the state prison system(s). This is a direct result of the prison industries not abiding by the mandatory PIE program requirements. The individual state prison systems receive approximately 40 per cent of the total wages earned by the prison workers for room and board compensation under the PIE program. When $.50 per hour is paid to an inmate when he should be receiving $18.50 and hour, the room and board deductions are seriously reduced and the DOC is forced to increase demands for operating expenses from the state coffers. This has just happened in Florida. The Secretary of the DOC resigned from the prison industry board and demanded they pay the DOC $1.4 million in room and board deductions owed the department under the federal PIE program.

See: So I assert that the "new" prison industries are in fact utilizing nothing more than slave labor to increase their profits and the profits of their PIECP partners.


The Journal of History - Summer 2008 Copyright © 2008 by News Source, Inc.