Factories Behind Bars

Studies | Crime

No. 206
Sunday, September 01, 1996
by Morgan O. Reynolds


Introduction: Idle Hands behind Bars

Prison inmates working inside the prisons for private-sector businesses assemble cables for electronic equipment and sew graduation gowns in South Carolina, make baseball caps in Connecticut and book travel reservations for airline customers in California. But fewer than 2,000 prisoners nationwide are employed by private enterprises. The prisons themselves employ prisoners to make such products as office furniture and license plates and to grow food for inmate consumption. But the prisons have jobs for no more than half of those imprisoned.

Despite a consensus of the American public that prison inmates should be gainfully employed, most are idle. Their idleness contrasts sharply with the circumstances of their 19th-century counterparts. Three-fourths worked and two-thirds of the workers were contracted to private entrepreneurs and farmers to produce goods for the general marketplace.

Under this system, many prisons posted financial surpluses rather than burdening taxpayers. Few prisoners served more than one term, suggesting much lower recidivism than today. Yet the success of prison labor was repeatedly attacked by prison reformers, trade unionists and business owners who opposed the possibility of competition from prison-made goods.

The attacks were successful. Over the years a series of federal and state laws made it increasingly difficult for either prison authorities or private firms to employ prisoners productively by banning the transport and sale of virtually all prison-made goods except to state and federal agencies. During World War II, prohibitions on inmate labor were relaxed, prison industries produced much-needed war materiel, prison morale rose and some prisons became self-supporting. But restrictions were reimposed when the war ended.

Providing access to productive jobs in the labor market for the state and federal prison population, now grown to 1.1 million, and reducing the burden of their upkeep on taxpayers requires removing the legal limitations on work by prisoners. It further requires involving the private sector in creating productive jobs and improving the productivity of the prisoner workers and the quality of their work.

If one in four prisoners could be put to work for private enterprise over the next five to 10 years, during which time the prison population is projected to increase to 1.6 million, that would mean 400,000 new prison jobs. Allocating 60 percent of their earnings to taxpayer compensation could reduce taxpayer costs by $2.4 billion per year, or somewhat less than 10 percent of the total cost of prison support. Further, this would increase the possibility of obtaining restitution for crime victims. Thus far, however, only halting steps have been taken to remove restrictions or to create jobs.

In 1979, Congress relaxed some strictures by passing the Percy Amendment. This amendment created the Private Sector/Prison Industry Enhancement Certification program, better known as the PIE program, which allows private companies to employ prison labor under very strict conditions.

  • Since 1979, the PIE program has certified 37 jurisdictions to engage in joint ventures with private enterprises to employ inmates.
  • The program has generated gross earnings of $63 million for convicts, including room and board payments of $13 million.
  • At the end of the first quarter of 1996, 1,944 prisoners were employed in PIE projects and earnings were at an annual rate of $13 million, with about half of the earnings going toward support of the prisoners' families, restitution to victims, taxes and incarceration costs.

Despite the success of the PIE projects, less than 2/10 of 1 percent of prisoners are part of the program. Clearly more needs to be done.

This study analyzes the American experience of private employment of prisoners and concludes that the advantages far outweigh the disadvantages. Expanding the role of the private sector in prison work would reduce crime, increase economic growth and reduce the burden of the criminal justice system on taxpayers. Among the steps that must be taken to make prisons hum with productive activity are:

  • Repeal the various state and federal laws that restrict trade in prison-made goods.
  • Repeal the laws that compel government agencies to buy prison-made goods in favor of competitive bidding for government purchases.
  • Create prison-enterprise marketing offices in prison and jail systems.
  • Allow private prison operators to profit from the gainful employment of convict labor.

Such reforms would overwhelmingly benefit American taxpayers, consumers, workers and businesses.


Introduction: Idle Hands behind Bars


The cost of operating the nation's prisons is soaring, along with the number of people in prisons.

  • Since 1980 the state and federal prison population has increased from 316,000 to 1.1 million.
  • By the year 2002 the inmate population is expected to increase by another 43 percent.
  • The expense has reached about $25 billion a year, or $250 a year for every household in America.

One of the most promising proposals to reduce the cost of criminal justice is to increase the amount of productive work by prisoners. Yet, despite a long-standing consensus in favor of gainful employment for convicts, idleness in prison remains the norm.

Perhaps half of all prisoners do some kind of work, counting housework (prison maintenance chores) and vocational training programs in the prisons themselves. Most of these jobs, however, are part-time and produce no income for room and board, restitution and other ends.

Things used to be different. In 1885, three-fourths of U.S. prison inmates were involved in productive labor, the majority working under prison contract and leasing arrangements with private employers. However:

  • Fifty years later, only 44 percent worked, and almost 90 percent of those who did worked in state rather than private programs.
  • A 1994 survey of 46 correctional systems in the United States and seven in Canada found that only 9.4 percent of female and 7.75 percent of male inmates worked at jobs other than housekeeping and maintenance.
  • According to the Correctional Industries Association 1995 Directory, only about 70,000 inmates were employed in state and federal prisons in 1994.
  • Fewer than 2,000 prisoners (less than 2/10 of 1 percent) worked for private companies in joint prison ventures in 1996.

As Figure I shows, a 1990 census found that only 7 percent of prisoners worked in prison manufacturing industries and another 4 percent in farming, a fall from 11 and 5 percent, respectively, six years earlier. These figures suggest that prison employment did not keep pace with the enormous run-up in prison population since 1980.5 The same census did report, however, that the proportion of prisoners working at maintenance chores like laundry and food increased from 32 to 41 percent of inmates during the same period. Fewer than 1 percent were in programs that allowed them to leave the prison during working hours for a regular outside job, and nearly 9 percent were enrolled in the prisons' vocational training programs.

Prison industries produced more than $1 billion worth of goods and services in 1994, mostly for other government agencies. Much of prison industry output is shoddy, overpriced merchandise that state agencies are forced to buy from the prison industry monopoly.6 The largest prison supplier was the Federal Bureau of Prisons with $433 million in output for federal agencies, yet the system employed only 16,000 inmates out of 61,000 inmates eligible to work (e.g., those not in solitary confinement, considered dangerous or being transferred) from its total of 85,000 inmates.7 Texas has been a leader in state-run prison industries, yet in 1994 employed only 7,500 inmates (one in 10) in 42 factories and another 6,500 in the prison agricultural division.8

Over the years, federal and state laws - often promoted by those opposed to competition from prison-made goods- have reduced the opportunities for employment, as discussed below. Halting steps have been taken recently to allow prison-made goods in the marketplace and to create private-sector jobs for prisoners, but legal restrictions that still remain have hampered progress.

In 1985, the late Chief Justice Warren E. Burger urged repeal of all statutes limiting the amount of prison industry production and discriminating against prison-made goods. Burger urged the cooperation of business and organized labor to use prison labor productively. Burger proposed an immediate increase in the number of prisoners working from 10 percent of the prison population to 20 percent, with a 10-year goal of "a full 50 percent of inmates working."9 More than 10 years later, Burger's proposed goal is little closer to realization than it was then.


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