Corporations using prison labor to grab even more cash

Big business is always looking for a cheaper way to build a widget. And they have found a disturbing solution right here in the U.S. – prison labor.

Inmates at the private Lockhart Texas prison, for example, took over the production of circuit boards used by companies such as IBM and Compaq. Meanwhile, at San Quentin State Prison in California, prisoners are handling work previously done at an assembly plant in Mexico.

These practices are wrong for many reasons, as a Global Research report details. For one, it puts productive employees earning fair market wages out of work. That was the case for those workers whose factories were shuttered in Texas and Mexico when their jobs were moved to prisons. Additionally, it "employs" inmates much of the time at slave labor wage levels, all in the name of bigger profits for some of the nation's largest corporations.

Such arrangements are not limited to Texas and California, the report explains:

At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies contains the cream of U.S. corporate society: 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. 

All of these businesses are excited about the economic boom generation by prison labor. Just between 1980 and 1994, profits went up from $392 million to $1.31 billion. Inmates in state penitentiaries generally receive the minimum wage for their work, but not all; in Colorado, they get about $2 per hour, well under the minimum. And in privately-run prisons, they receive as little as 17 cents per hour for a maximum of six hours a day, the equivalent of $20 per month. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour for what they call “highly skilled positions.” At those rates, it is no surprise that inmates find the pay in federal prisons to be very generous. There, they can earn $1.25 an hour and work eight hours a day, and sometimes overtime. They can send home $200-$300 per month.

It has also been a boon for the private prison industry over the last few decades, the report notes:

Profits are so good that now there is a new business: importing inmates with long sentences, meaning the worst criminals. When a federal judge ruled that overcrowding in Texas prisons was cruel and unusual punishment, the CCA signed contracts with sheriffs in poor counties to build and run new jails and share the profits. According to a December 1998 Atlantic Monthly magazine article, this program was backed by investors from Merrill-Lynch, Shearson-Lehman, American Express and Allstate, and the operation was scattered all over rural Texas. That state’s governor, Ann Richards, followed the example of Mario Cuomo in New York and built so many state prisons that the market became flooded, cutting into private prison profits.

After a law signed by [former President] Clinton in 1996 – ending court supervision and decisions – caused overcrowding and violent, unsafe conditions in federal prisons, private prison corporations in Texas began to contact other states whose prisons were overcrowded, offering “rent-a-cell” services in the CCA prisons located in small towns in Texas. The commission for a rent-a-cell salesman is $2.50 to $5.50 per day per bed. The county gets $1.50 for each prisoner.

The Teamsters have long advocated against the creation of private prisons. Last year, we successfully helped stop Florida from privatizing nearly a third of the state's prisons. We've frequently detailed the abhorrent conditions at the nation's first privately-run state correctional facility in Ohio.

It's time to take the profit out of prisons and put it back in the hands of hard-working Americans.