21st-Century Slaves

How Corporations Exploit Prison Labor

In the eyes of the corporation, inmate labor is a brilliant strategy in the eternal quest to maximize profit.

By Rania Khalek
July 21, 2011
Courtesy Of "Alter Net"

There is one group of American workers so disenfranchised that corporations are able to get away with paying them wages that rival those of third-world sweatshops. These laborers have been legally stripped of their political, economic and social rights and ultimately relegated to second-class citizens. They are banned from unionizing, violently silenced from speaking out and forced to work for little to no wages. This marginalization renders them practically invisible, as they are kept hidden from society with no available recourse to improve their circumstances or change their plight.

They are the 2.3 million American prisoners locked behind bars where we cannot see or hear them. And they are modern-day slaves of the 21st century. 

Incarceration Nation

It’s no secret that America imprisons more of its citizens than any other nation in history. With just 5 percent of the world’s population, the US currently holds 25 percent of the world's prisoners. In 2008, over 2.3 million Americans were in prison or jail, with one of every 48 working-age men behind bars. That doesn’t include the tens of thousands of detained undocumented immigrants facing deportation, prisoners awaiting sentencing, or juveniles caught up in the school-to-prison pipeline. Perhaps it’s reassuring to some that the US still holds the number one title in at least one arena, but needless to say the hyper-incarceration plaguing America has had a damaging effect on society at large.

According to a study by the Center for Economic and Policy Research (CEPR), US prison rates are not just excessive in comparison to the rest of the world, they are also substantially higher than our own longstanding history. The study finds that incarceration rates between 1880 and 1970 ranged from about 100 to 200 prisoners per 100,000 people. After 1980, the inmate population began to grow much more rapidly than the overall population and the rate climbed from about 220 in 1980 to 458 in 1990, 683 in 2000, and 753 in 2008.

The costs of this incarceration industry are far from evenly distributed, with the impact of excessive incarceration falling predominantly on African-American communities. Although black people make up just 13 percent of the overall population, they account for 40 percent of US prisoners. According to the Bureau of Justice Statistics (BJS), black males are incarcerated at a rate more than 6.5 times that of white males and 2.5 that of Hispanic males and black females are incarcerated at approximately three times the rate of white females and twice that of Hispanic females.

Michelle Alexander points out in her book The New Jim Crow that more black men are in jail, on probation, or on parole than were enslaved in 1850. Higher rates of black drug arrests do not reflect higher rates of black drug offenses. In fact, whites and blacks engage in drug offenses, possession and sales at roughly comparable rates.  

Incentivizing Incarceration

Clearly, the US prison system is riddled with racism and classism, but it gets worse. As it turns out, private companies have a cheap, easy labor market, and it isn’t in China, Indonesia, Haiti, or Mexico. It’s right here in the land of the free, where large corporations increasingly employ prisoners as a source of cheap and sometimes free labor.

In the eyes of the corporation, inmate labor is a brilliant strategy in the eternal quest to maximize profit. By dipping into the prison labor pool, companies have their pick of workers who are not only cheap but easily controlled. Companies are free to avoid providing benefits like health insurance or sick days, while simultaneously paying little to no wages. They don’t need to worry about unions or demands for vacation time or raises. Inmate workers are full-time and never late or absent because of family problems. 

If they refuse to work, they are moved to disciplinary housing and lose canteen privileges along with "good time" credit that reduces their sentences. To top it off, the federal government subsidizes the use of inmate labor by private companies through lucrative tax write-offs. Under the Work Opportunity Tax Credit (WOTC), private-sector employers earn a tax credit of $2,400 for every work release inmate they employ as a reward for hiring “risky target groups” and they can earn back up to 40 percent of the wages they pay annually to "target group workers."

Study after study demonstrates the wastefulness of America's prison-industrial complex, in both taxpayer dollars and innocent lives, yet rolling back imprisonment rates is proving to be more challenging than ever.  Meanwhile, the use of private prisons and now privately contracted inmate labor has created a system that does not exactly incentivize leaner sentencing.

The disturbing implications of such a system mean that skyrocketing imprisonment for the possession of miniscule amounts of marijuana and the the expansion of severe mandatory sentencing laws regardless of the conviction, are policies that have to potential to increase corporate profits. As are the“three strikes laws” that require courts to hand down mandatory and extended sentences to people who have been convicted of felonies on three or more separate occasions.  People have literally been sentenced to life for minor crimes like shoplifting.

 The Reinvention Of Slavery

The exploitation of prison labor is by no means a new phenomenon. Jaron Browne, an organizer with People Organized to Win Employment Rights (POWER), maps out how the exploitation of prison labor in America is rooted in slavery. The abolition of slavery dealt a devastating economic blow to the South following the loss of free labor after the Civil War. So in the late 19th century, an extensive prison system was created in the South in order to maintain the racial and economic relationship of slavery, a mechanism responsible for re-enslaving black workers. Browne describes Louisiana’s famous Angola Prison to illustrate the intentional transformation from slave to inmate:

“In 1880, this 8000-acre family plantation was purchased by the state of Louisiana and converted into a prison. Slave quarters became cell units. Now expanded to 18,000 acres, the Angola plantation is tilled by prisoners working the land—a chilling picture of modern day chattel slavery.”

The abolition of slavery quickly gave rise to the Black Codes and Convict Leasing, which together worked wonders at perpetuating African American servitude by exploiting a loophole in the 13th Amendment to the US Constitution, which reads:

“Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”

The Black Codes were a set of laws that criminalized legal activity for African Americans and provided a pretext for the arrest and mass imprisonment of newly freed blacks, which caused the percentage of African Americans in prison to surpass whites for the first time. Convict leasing involved leasing out prisoners to private companies that paid the state a certain fee in return. Convicts worked for the companies during the day outside the prison and returned to their cells at night. The system provided revenue for the state and profits for plantation owners and wasn’t abolished until the 1930s.

Unfortunately, convict leasing was quickly replaced with equally despicable state-run chain gangs. Once again, stories of vicious abuse created enough public anger to abolish chain gangs by the 1950s. Nevertheless, the systems of prisoner exploitation never actually disappeared.

Today’s corporations can lease factories in prisons, as well as lease prisoners out to their factories. In many cases, private corporations are running prisons-for-profit, further incentivizing their stake in locking people up. The government is profiting as well, by running prison factories that operate as multibillion-dollar industries in every state, and throughout the federal prison system, where prisoners are contracted out to major corporations by the state.

In the most extreme cases, we are even witnessing the reemergence of the chain gang. In Arizona, the self-proclaimed “toughest sheriff in America,” Joe Arpaio, requires his Maricopa County inmates to enroll in chain gangs to perform various community services or face lockdown with three other inmates in an 8-by-12-foot cell, for 23 hours a day. In June of this year, Arpaio started a female-only chain gang made up of women convicted of driving under the influence. In a press release he boasted that the inmates would be wearing pink T-shirts emblazoned with messages about drinking and driving. 

The modern-day version of convict leasing was recently spotted in Georgia, where Governor Nathan Deal proposed sending unemployed probationers to work in Georgia's fields as a solution to a perceived labor shortage following the passage of the country’s most draconian anti-immigrant law. But his plan backfired when some of the probationers began walking off their jobs because the fieldwork was too strenuous.

There has also been a disturbing reemergence of the debtors’ prison, which should serve as an ominous sign of our dangerous reliance on prisons to manage any and all of society’s problems. According to the Wall Street Journal more than a third of all U.S. states allow borrowers who can't or won't pay to be jailed. They found that judges signed off on more than 5,000 such warrants since the start of 2010 in nine counties. It appears that any act that can be criminalized in the era of private prisons and inmate labor will certainly end in jail time, further increasing the ranks of the captive workforce.

Who Profits?

Prior to the 1970s, private corporations were prohibited from using prison labor as a result of the chain gang and convict leasing scandals. But in 1979, Congress began a process of deregulation to restore private sector involvement in prison industries to its former status, provided certain conditions of the labor market were met. Over the last 30 years, at least 37 states have enacted laws permitting the use of convict labor by private enterprise, with an average pay of $0.93 to $4.73 per day. 

Federal prisoners receive more generous wages that range from $0.23 to $1.25 per hour, and are employed by Unicor, a wholly owned government corporation established by Congress in 1934. Its principal customer is the Department of Defense, from which Unicor derives approximately 53 percent of its sales. Some  21,836 inmates work in Unicor programs. Subsequently, the nation's prison industry – prison labor programs producing goods or services sold to other government agencies or to the private sector -- now employs more people than any Fortune 500 company (besides General Motors), and generates about $2.4 billion in revenue annually. Noah Zatz of UCLA law school estimates that:

“Well over 600,000, and probably close to a million, inmates are working full-time in jails and prisons throughout the United States. Perhaps some of them built your desk chair: office furniture, especially in state universities and the federal government, is a major prison labor product. Inmates also take hotel reservations at corporate call centers, make body armor for the U.S. military, and manufacture prison chic fashion accessories, in addition to the iconic task of stamping license plates.”

Some of the largest and most powerful corporations have a stake in the expansion of the prison labor market, including but not limited to IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom's, Revlon, Macy's, Pierre Cardin, Target Stores, and many more. Between 1980 and 1994 alone, profits went up from $392 million to $1.31 billion. Since the prison labor force has likely grown since then, it is safe to assume that the profits accrued from the use of prison labor have reached even higher levels.  

In an article for Mother Jones, Caroline Winter details a number of mega-corporations that have profited off of inmates:

“In the 1990s, subcontractor Third Generation hired 35 female South Carolina inmates to sew lingerie and leisure wear for Victoria's Secret and JCPenney. In 1997, a California prison put two men in solitary for telling journalists they were ordered to replace 'Made in Honduras' labels on garments with 'Made in the USA.'"

According to Winter, the defense industry is a large part of the equation as well:

“Unicor, says that in addition to soldiers' uniforms, bedding, shoes, helmets, and flak vests, inmates have 'produced missile cables (including those used on the Patriot missiles during the Gulf War)' and 'wiring harnesses for jets and tanks.' In 1997, according to Prison Legal News, Boeing subcontractorMicroJet had prisoners cutting airplane components, paying $7 an hour for work that paid union wages of $30 on the outside.”

Oil companies have been known to exploit prison labor as well. Following the explosion of the Deepwater Horizon rig that killed 11 workers and irreparably damaged the Gulf of Mexico for generations to come, BP elected to hire Louisiana prison inmates to clean up its mess. Louisiana has the highest incarceration rate of any state in the nation, 70 percent of which are African-American men. Coastal residents desperate for work, whose livelihoods had been destroyed by BP’s negligence, were outraged at BP’s use of free prison labor.

In the Nation article that exposed BP’s hiring of inmates, Abe Louise Young details how BP tried to cover up its use of prisoners by changing the inmates' clothing to give the illusion of civilian workers. But nine out of 10 residents of Grand Isle, Louisiana are white, while the cleanup workers were almost exclusively black, so BP’s ruse fooled very few people. 

Private companies have long understood that prison labor can be as profitable as sweatshop workers in third-world countries with the added benefit of staying closer to home. Take Escod Industries, which in the 1990s abandoned plans to open operations in Mexico and instead moved to South Carolina, because the wages of American prisoners undercut those of de-unionized Mexican sweatshop workers. The move was fueled by the state, which gave a $250,000 "equipment subsidy" to Escod along with industrial space at below-market rent. Other examples include Ohio's Honda supplier, which pays its prison workers $2 an hour for the same work for which the UAW has fought for decades to be paid $20 to $30 an hour; Konica, which has hired prisoners to repair its copiers for less than 50 cents an hour; and Oregon, where private companies can “lease” prisoners at a bargain price of $3 a day.

Even politicians have been known to tap into prison labor for their own personal use. In 1994, a contractor for GOP congressional candidate Jack Metcalf hired Washington state prisoners to call and remind voters he was pro-death penalty. He won his campaign claiming he had no knowledge of the scandal. Perhaps this is why Senator John Ensign (R-NV) introduced a bill earlier this year to require all low-security prisoners to work 50 hours a week. After all, creating a national prison labor force has been a goal of his since he went to Congress in 1995.

In an unsettling turn of events lawmakers have begun ditching public employees in favor of free prison labor. The New York Times recently reported that states are enlisting prison labor to close budget gaps to offset cuts in federal financing and dwindling tax revenue. At a time of record unemployment, inmates are being hired to paint vehicles, clean courthouses, sweep campsites and perform many other services done before the recession by private contractors or government employees. In Wisconsin, prisoners are now taking up jobs that were once held by unionized workers, as a result of Governor Scott Walker’s contentious anti-union law.

Why You Should Care

Those who argue in favor of prison labor claim it is a useful tool for rehabilitation and preparation for post-jail employment. But this has only been shown to be true in cases where prisoners are exposed to meaningful employment, where they learn new skills, not the labor-intensive, menial and often dangerous work they are being tasked with. While little if any evidence exists to suggests that the current prison labor system decreases recidivism or leads to better employment prospects outside of prison, there are a number of solutions that have been proven to be useful. 

According to a study by the Pew Charitable Trusts, having a history of incarceration itself impedes subsequent economic success. Pew found that past incarceration reduced subsequent wages by 11 percent, cut annual employment by nine weeks and reduced yearly earnings by 40 percent. The study suggests that the best approach is for state and federal authorities to invest in programs that reconnect inmates to the labor market, as well as provide training and job placement services around the time of release. Most importantly, Pew says that in the long term, America must move toward alternative sentencing programs for low-level and nonviolent offenders, and issuing penalties that are actually proportionate with real public safety concerns.

The exploitation of any workforce is detrimental to all workers. Cheap and free labor pushes down wages for everyone. Just as American workers cannot compete with sweatshop labor, the same goes for prison labor. Many jobs that come into prison are taken from free citizens. The American labor movement must demand that prison labor be allowed the right to unionize, the right to a fair and living wage, and the right to a safe and healthy work environment. That is what prisoners are demanding, but they can only do so much from inside a prison cell.  

As unemployment on the outside increases, so too will crime and incarceration rates, and our 21st-century version of corporate slavery will continue to expand unless we do something about it.  

Rania Khalek is a progressive activist. Check out her blog Missing Pieces or follow her on Twitter @Rania_ak. You can contact her at raniakhalek@gmail.com.