Background
Background on Private Prisons
In a public prison, all of the actions and jobs are mandated by the government. Though services may still be contracted out and fulfilled by private companies, the federal government still oversees everything. In a private prison, the government's role is different. They don’t oversee any of the operations taking place inside the prisons, but simply pay the prison in order to house prisoners there. The first private prison dates back to 1852, however it wasn't until the 1980s that privatization of prisons became abundant. Following President Reagan's "war on drugs", the amount of people being incarcerated exponentially increased. Government run prisons were unable to cope with the overcrowding and rising costs associated with this influx of prisoners. The government then turned to private prisons as it provided a way to handle the overcrowding that was more cost effective than opening additional government run facilities.
Background on Inmate Labor
The exploitation of inmate labor dates back to the civil war era. After the abolishment of slavery, the South lost the free labor it’s economy was built upon. The incarceration rate sharply increased in order to continue to supply the low cost labor force. Jaron Browne, an organizer with People Organized to Win Employment Rights, notes that “an extensive prison system was created in the South in order to maintain the racial and economic relationship of slavery”. Freed slaves were incarcerated for petty crimes or failure to comply with their sharecropping commitments. Following their incarceration they were hired out by private companies to build railroads, work in mines, or harvest the fields.
Though the typical notions of slavery may be outdated, laws surrounding inmate labor have only flourished in the modern era and provided a contemporary definition of slavery. A group called the American Legislative Exchange Council has collaborated on state laws that allow the creation of private for-profit prisons. In 1979, The American Legislative Exchange Council created a federal program called the Prison Industries Enhancement Certification Program. This program “was designed to encourage states and units of local government to establish employment opportunities for prisoners that approximate private sector work opportunities” as is published on the Prison Rehabilitative Industries and Diversified Enterprises website. This mandates that inmates work during their incarceration period, and allows private companies to capitalize on the venerable workforce that is inmate labor, as they provide a cost effective, almost never-ending supply of labor.
How Private Prisons Make Money
Selling Prison Beds
When considering the implications of private prisons, we must consider the intent of sending people to jail. In a scenario where the purpose of sending a person to jail is to rehabilitate them so they are able to re-enter society as a productive individual, prisons wouldn’t be at maximum capacity due to greater emphasis being placed on taking actions to ensure they can effectively be educated and rehabilitated. With private prisons we see the opposite. Much like any business, private prisons aim to maximize profits. In this case profits are maximized by filling cells. Keeping a prison at maximum capacity requires an inflow of inmates to counteract the outflow of those have served their sentence. This conflict of interest by for-profit prisons contributes to the increasing rate of incarceration, and the extension of sentence length. Further, the government offers these companies subsidies for utilizing this type of labor. Abe Young, a writer for The Nation explains that “Under the Work Opportunity Tax Credit, private-sector employers receive 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.’”Selling Inmate Labor
Slavery was officially abolished by the Thirteenth Amendment. However, Section 1 of such says the following: ““Neither slavery nor involuntary servitude, except as punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” Essentially this states that those who are incarcerated are exempt from the labor laws concerning the abolition of slavery, and can be forced to work as due punishment. Part of the reason this exploitation of labor is able to exist is based upon the fact that prisoners, despite the fact that they work either for prisons or are contracted out to work for companies, are not considered employed as stated in Section 26 U.S.C. 3306(c)(21) of the tax code. Due to this section in the tax code, any service performed in a penal institution isn’t considered employment. If the definition of employment were expanded to include prisoners, companies that use inmate labor through the Prison Industries Enhancement Certification Program would be required to uphold the same worker rights policies as other companies, as well as provide unemployment taxes and benefits when prisoners reentered society.
It is important to note that prisoner work is divided into two categories. The first category is inmates who work for the prison. This includes janitors, cooks, hairdressers, library or canteen workers, etc. The prison does not directly make profits off of these types of jobs, however they save a multitude of dollars by paying those workers substantially less than if they hired employees from outside the prison. The second type is those allowable by the Prison Inmate Enhancement Certification Program. As stated above, this program allows private businesses to contract with prisons in order to utilize the low cost labor of inmates. A study done by the Prison Policy initiative stated that the average inmate’s wage was $0.93 per hour, however some wages were as low as $0.16 per hour in cases where inmates worked for private companies. An additional factor that contributes to the shockingly low wages of prisoners is the deduction of “Legal Financial Obligations”. The obligations pertaining to criminal processing, room and board, taxes, and other incarceration fees. The prisoners have no choice as to the amount they pay in LFO’s, and these deductions can sometimes amount to an 80% cut off of their paycheck.
Inmates involved in private contracting are stripped of rights normal workers have access too. Their prisoner status prohibits them from unionizing, which in turn only reinforces the marginalization they face. Workers that lack the ability to unionize, lack the ability to speak out for better worker rights or wages. Further, if these workers strike or refuse to work they are often threatened with losing canteen privileges or being moved into solitary confinement housing. In contrast, those who obey these slave like wages and conditions are incentivized by promises of shorter sentencing.
The Beneficiaries of Inmate Labor
Companies utilizing inmate labor are incentivized for a multitude of reasons. Due to the nature of prison labor, these companies need not worry about offering their workers vacation or sick days. They don’t need to worry about their workers being late or unreliable, as all inmates are full time and are held to very strict schedules. Over 37 states have made it legal for corporations to contract out workers in private prisons. These corporations include 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, as well as numerous others. This proves to be a vicious cycle, as the profits these private prisons obtain from both cutting back on legitimate employees and the income the receive from private companies fuels the desire to increase sentence length. According to a study in Mother Jones, if prison labor hadn’t been used to fulfil the duties of normal employees GEO would spend over $125,000 a month in benefits and wages. The amount, however, they actually pay per month amounts to less than $1700 a month. States that utilize private prisons save over $15 million a year.
Intervention
Past Attempts
Future Intervention Strategies
Due to the nature of prisons, their inhabitants are voiceless. Because these people don’t have a voice and those governing them oppose all forms of unionization and organization, I don’t think attempts to strike by the prisoners would be that beneficial to the cause. If prisoners were able to unionize to advocate for worker and health rights, there is a greater change they would be able to advocate for themselves however that seems harder to achieve than alternative options.
I feel as if the best way to change the economic model of private prisons is by policy amendment. Private prisons were originally created to handle the mass influx of prisoners in the in 70s, and have since turned into a massive business. Altering laws so that the subsidies and profits private prisons make are solely to keep them up and running is the only way to counteract the mass incarceration of people for profit that we see today. The nature of businesses is to maximize revenue, therefore I feel as if for-profit prisons will continue to “sell” beds in their prisons as long as there are incentives in place that allow them to model their business after a company.
In order to intervene in the exploitation of prison labor, we must lobby for policy change. Changing laws to that inmates can be seen as “employees” for private companies will help prisoners in the long run, as they will be eligible for unemployment benefits and job placement help when they return to society. Corporations are only able to use prison labor as an due to the Prison Rehabilitative Industries and Diversified Enterprises, an act which has had consequences far from rehabilitating people. The laws I’m suggesting must address minimum wage for workers both inside the prison and for private contracting companies. A tangent of this law would need to govern the extent to which Legal Financial Obligations can be subtracted from inmate pay and there must be a concrete way for calculation of what those fees are. In any economic scenario where workers are being exploited, the negative effects concern everyone. Though many policy makers and citizens may not have much empathy for prisoners, it is critical to see the effects of cheap labor of the rest of the employment market. As is evident from my arguments above, prisoners do not benefit from being contracted out to private companies. Nor is this contracting beneficial to the general public, as these jobs could go to other American workers. The wages prisoners are being paid affect the entire workforce, much like sweatshop, because low wages push down equilibrium wages for everyone.