« The Economics of Terrorism | Main | An Insider's View of the Bretton Woods Negotiations »

Thursday, September 14, 2006

Prison Labor

Brad Plumer on prison labor:

The Joys of Prison Labor, by Brad Plumer: ...I just happened across a great story by Chris Levister about prison labor. The prison-industrial complex, Levister reports, now employs an incredible 750,000 people—"more than any Fortune 500 corporation." And most of those workers earn less than minimum wage [Update from comments: Small correction (which I fixed in my original post, because the article was unclear) -- prisons across the nation employ 750,000 people total. 80,000 of those are prisoners (making less than the minimum wage). The article was a bit unclear about that. (And in any case, GM and Wal-Mart employ more than 750,000 people.)]:

For the tycoons who have invested in the prison industry, it has been like finding a pot of gold. They don't have to worry about strikes or paying unemployment, health or worker's comp insurance, vacation or comp time. All of their workers are full time, and never arrive late or are absent because of family problems; moreover, if prisoners refuse to work, they are moved to disciplinary housing and lose canteen privileges. Most importantly, they lose "good time" credit that reduces their sentence.

Bonanza! Now one might reasonably wonder whether this captive, ultra-cheap labor force might be pulling down wages and standards for everyone else. After all, while inmates making goods for domestic consumption must be paid a "prevailing wage," that law doesn't apply to exports. So companies can outsource production to the local penitentiary and pay their "workers" next to nothing:

Prisoners now manufacture everything from blue jeans, to auto parts, to electronics and furniture. Honda has paid inmates $2 an hour for doing the same work an auto worker would get paid $20 to $30 an hour to do. Konica has used prisoners to repair copiers for less than 50 cents an hour. … Clothing made in California and Oregon prisons competes so successfully with apparel made in Latin America and Asia that it is exported to other countries.

The whole racket seems rather perverse—prisons have effectively become domestic sweatshops. But what should be done about it? Well, the government could obviously require that prisoners who manufacture exports be paid a prevailing wage too. That could result in fewer companies contracting with prisons altogether, which might be bad for prisoners, seeing as how these programs are popular and purportedly help them build job skills and the like. But this sounds exactly like the standard argument against raising the minimum wage, a fear that sounds sensible in theory but almost never pans out in practice. Plus, who says prison sweatshops are the best way to "help" prisoners out anyway?

(Then again, seeing as how popular opinion currently tilts so overwhelmingly against anything smelling like "rehabilitation," maybe the only way prisoners will ever actually receive job-training and the like is if corporations can make a buck off it. Cynical thought, but perhaps not unrealistic.)

Of course, the real moral of the piece is that way too many people are in prison. There are currently two million prisoners in the United States, and "some experts believe that the number of people locked up in the U.S. could double in the next 10 years"—many for minor, non-violent drug crimes and the like. The War on Drugs: truly the gift that keeps giving. But now that businesses are finding it so lucrative, what are the odds of that changing anytime soon? I wonder if corporations have ever lobbied for "tough on crime" policies because they need the cheap labor. Seems a bit paranoid, but hardly impossible.

    Posted by on Thursday, September 14, 2006 at 11:41 AM in Economics | Permalink  TrackBack (0)  Comments (9)


    TrackBack URL for this entry:

    Listed below are links to weblogs that reference Prison Labor:


    Feed You can follow this conversation by subscribing to the comment feed for this post.