Factories Behind Bars

Policy Reports | Crime

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

Answering the Critics

From the earliest days of prison industries, complaints have surrounded work by prisoners - complaints about prison-made goods competing with those produced on the outside; about physical abuse of prisoners, especially those leased to private businesses; and about security. The objections to competition from prison-made products were largely responsible for the restrictive state and federal laws that play a big part in the idleness of so many prisoners today. Are these objections and concerns serious enough to keep productive work for prisoners to a minimum, or can they be dealt with in ways that allow the use of this resource?

Does Prisoner Work Create
Unfair Competition for Free Labor?

From an economist's perspective, newly created value - whether produced inside or outside prisons - is a social boon, not a curse. Production by prisoners creates rather than destroys jobs. For example, if prisoners make filing cabinets, the task requires someone to manufacture sheet metal, to transport it to the work site and to transport the finished product. These and the demands for other goods and services create new jobs. But certain firms and local labor might be hurt more than helped, at least in the short run.

Case Studies. It is not difficult to find complaints about prison labor on the outside. For example, an article in the December 1995 issue of Furniture Design and Manufacturing magazine criticized a Federal Prison Industries (FPI) proposal to expand its production of furniture. The FPI is a wholly owned government corporation created in 1934 to produce goods for sale exclusively to the federal government. The FPI is responsible for employing 25 percent of sentenced federal inmates and is required to diversify as much as possible to minimize its market impact. In response to industry criticism, the FPI argues that its overall economic impact is positive, especially since 73 cents of each sales dollar is spent directly on materials, equipment and services purchased from private businesses. The competitive impact on the furniture industry is minimal, and if anything, creates net jobs in the industry, according to FPI analysis.

Other cases that have given rise to complaints, especially from organized labor, are as follows:

Lockhart Technologies. Lockhart Technologies, Inc. closed its Austin, Texas, branch, laid off 150 workers and moved its operations into a state prison located in Lockhart, Texas, that is operated by Wackenhut Corporation. The prisoners are paid the federal minimum wage to assemble circuit boards, provided no health or other benefits (they have them already) and allowed to keep 20 percent of their wages. The products go to computer industry giants like IBM, Compaq and Dell. Joe Gunn, president of the Texas AFL-CIO, complained that Wackenhut violated federal law by not consulting with organized labor and declared this kind of prison labor "absolute indentured slavery. [Wackenhut] puts people to work under conditions that we criticize China for." The Texas Employment Commission, on the other hand, said that the only economic impact was in largely rural Caldwell County, where the prison is located and where there were no unions to be considered.
Weastec Corporation. The United Automobile Workers union (UAW) pressured Honda in 1992 into discontinuing a contract with Weastec Corporation for parts assembled by jail inmates in Ross County, Ohio. "Honda backed off," says Ohio UAW official Warren Davis, "because they didn't feel the negative publicity was worth it."

Toys R Us. A union protest stopped a Chicago-area Toys R Us store from using inmate labor to stock shelves at night in 1994.

Hog Slaughtering in Arizona. A hog-slaughtering plant was closed, putting United Food and Commercial union members out of work, and the Arizona Department of Corrections and the Pork Producers Association subsequently opened a joint venture plant.

According to Jack Henning, executive secretary-treasurer of California's Federation of Labor, joint ventures using prison labor are obligated to consult local labor unions but "they rarely do." Opponents of profit-and-loss prison labor projects - sometimes termed "enterprise prisons" - argue that cheap labor, not social responsibility, fuels the movement toward private employment for prisoners. Some critics admit that prisoners are eager to work, especially since they can save thousands of dollars over a few years, but object that prisoners are exploited without the right to organize politically or unionize.

Overall Economic Benefits. In the competitive fray, one person's productive success often harms or even ruins another supplier financially. Yet we tolerate competition, even celebrate it, because its advantages vastly outweigh its disadvantages. Despite sometimes visible and poignant costs, competition is good rather than bad. As gymnastics coach Bela Karolyi put it, "No competition, no progress." Economist Joseph Schumpeter (1883-1950) called the innovations that continuously render obsolete old inventories, ideas, technologies, skills and equipment "gales of creative destruction." The only alternative to consumer sovereignty and free markets is producer sovereignty and guaranteed monopoly. This would serve us very badly as a society because competition allows us to discover the cheapest and most efficient or effective way to do any job, sparing productive resources for new tasks.

Comparing Prisoner Work to Workfare for Welfare Recipients. Consider a related issue: welfare reform. Getting able-bodied adults off welfare and into jobs is widely viewed as progress rather than as a threat to the livelihood of others. Work for prisoners, by contrast, has been treated as a competitive threat. What is the economic difference? To be sure, community hostility toward convicts emerges from the fact that they are criminals, and the welfare recipients are merely dependents. Yet there appears to be little concern over the competitive impact of large numbers of welfare recipients going to work. With 15 million persons receiving Aid to Families with Dependent Children, 6 million receiving Supplemental Security Income, 27.5 million on food stamps and millions more on Medicaid and other welfare programs, the potential impact of a large expansion in work and production among welfare recipients would dwarf that of putting 1.1 million prisoners to work.

Comparing Prisoner Work to the "Dumping" of Goods in Foreign Trade. Fear of prison production resembles the debate over the so-called dumping of goods by foreign producers. Economists argue that we should let foreigners "dump" all the valuable goods they want. If others wish to give us their goods, they add to the opportunity and wealth in our community. Adversely affected business owners and displaced workers are seldom so sanguine. Yet interest groups like the U.S. Chamber of Commerce and the AFL-CIO are on record in general support of private-sector prison industries.

Minimizing Adverse Impacts. One way to minimize the adverse impact of prisoner labor is to apply it to products that have negligible domestic competitive effects. For example, Prison Blues, jeans produced by prisoners, compete primarily with jeans produced offshore. However, if domestic and free private enterprise cannot produce something at a profit, prison labor probably cannot, either. A second way is to remove restrictions on prison-made goods in interstate commerce, insuring that prison labor competes in a national market.

Finally, states should repeal requirements that prison-manufactured goods be used by state agencies or given preferences by those agencies. The federal government should do the same with its mandatory purchase requirement for federal agencies. This would give private enterprise an opportunity to compete for the business from state and federal agencies and from joint ventures employing prisoners.

Why Prison Production Is No Guarantee of Profit. Focusing only on wages can be misleading. There are other factors that make prison production more, not less, expensive than non-prison production. These factors include security problems, high turnover, lack of skills, poor work habits and remote prison locations. A large percentage of inmates are illiterate or semiliterate. Prison labor usually is suitable only for labor-intensive, low-skilled work, at least on a large scale. In general, profit is no more easily achieved in prison than out. If convict labor is cheaper than civilian labor, it probably is because the entrepreneur hiring the labor expects it to be less productive.

Does Prisoner Work Make
Prisoner Abuse More Likely?

Accounts of the abuse of prisoner workers are often mixtures of fiction and truth. Some of these accounts have come from historians who despised capitalism and sought to discredit it, especially in labor matters, in both prison workplaces and free world enterprises. Journalists are alert to any story of abuse, whether behind bars or not.

Certainly convict laborers have been killed and seriously injured on the job, especially in railroad construction and mining. The same has been true of non-convict workers. However, no systematic data exist and no one has demonstrated a "convict differential" in industrial accidents.

In a new book, Rutgers University historian David Oshinsky declares that convict leasing "would disgrace the South...serve to undermine legal equality, harden racial stereotypes, spur industrial development, intimidate free workers and breed contempt for the law. It would turn a few men into millionaires and crush thousands of ordinary lives." Oshinsky maintains that "the South's economic development can be traced by the blood of its prisoners," an unsustainable accusation in view of the fact that the rate of incarceration in the South was about the same as in the nation as a whole. In 1880, for example, Mississippi had 65 prisoners per 100,000 population and the nation's average was 61. By comparison, in 1994 the national incarceration rate was 386 per 100,000.80 While the convict mortality rate was high, the real villain was not leasing, but rather government's failure to protect human rights in the entire prison system.

Private lease deals and work behind prison walls for private employers (sometimes termed "enterprise prisons") must conform to the U.S. Constitution's Eighth Amendment prohibition of cruel and unusual punishment. Further, the state should retain ultimate control and responsibility for the treatment of convicts, whether they are leased out for profit or working within prisons. As in prison operation, the state is likely to do a better job of investigating, monitoring and auditing private enterprise than of overseeing jails and work facilities operated by other bureaucrats. [ See the sidebar on Penal Servitude .]

Does Prisoner Work Create
Unreasonable Security Problems?

Security is, rightly, a central preoccupation of prison officials. But convicts are far from equally bad or equally risky. Systematic risk classification of prisoners was one of the advances in penology during the 19th century. Among the manifestations of such progress are minimum, intermediate and maximum security prisons.

Accountability is the fundamental answer to the security question. Prison authorities and private enterprise must continue to be held liable for escapes and security. Performance bonds posted by private employers entrusted with prisoners can improve the incentives for those employers to maintain security. In some cases, contractors can hire their own guards and adopt their own innovative security methods under careful monitoring. Work release programs already operate successfully, as do joint ventures within prison walls, and no peculiar new security solutions are required before prisoners go to work either inside or outside prisons. As mentioned above, constructive occupation of prisoner time is likely to reduce security problems.


What can be done to make prisons hum with productive work? In particular, how can private-sector jobs and high-quality goods and services be radically boosted within prisons? State and federal prison systems control a huge asset - convict labor - and largely waste its productive potential. All 50 states now have prison industry programs, and in 1934 Federal Prison Industries, Inc. (trade name UNICOR) was established as a self-sustaining corporation to keep federal inmates constructively employed and provide job training. But the possibility of making a profit must be allowed if the rapidly growing population of prisoners is going to have gainful employment. This means repealing state and federal obstacles and encouraging private-sector involvement.
[See figure on Penile Servitude]
Public Policy Reforms. Among the steps that need to be taken are these:
  • Repeal the Sumners-Ashurst Act making it a federal crime to knowingly transport convict-made goods in interstate commerce.
  • Repeal the Walsh-Healy Act ban on the use of convict labor in federal procurement contracts over $10,000.
  • Repeal similar state laws restricting trade in prison-made goods and services.
  • Repeal state-use laws that compel state agencies to buy goods and services made in that state's prisons and institute competitive bidding for all state, local and federal purchases.
  • Repeal state and federal limitations on inmate pay to allow more flexible, market-determined prices for inmates' labor (compensation based on anticipated productivity).
  • Pay modest bonuses to wardens and prison officials for progress toward making their prisons financially self-sufficient.
  • Create prison-enterprise marketing offices in prison and jail systems.
  • Allow private prison operators to profit from the gainful employment of convict labor.
  • Encourage and publicize private-sector proposals for enterprise prisons.
  • Set up procedures for competitive bidding for prison labor.
  • Diminish prisoner litigation against prison work by repealing the Civil Rights of Institutionalized Persons Act and the federal habeas corpus procedure, then institute the English rule by which prisoners can lose as well as gain something of value in lawsuits.
  • Explicitly allow contracts for convict leasing for work outside prisons with responsible private enterprises, paying careful attention to legal liability, security against escape and state inspection and supervision.
  • Reallocate effort away from make-work training programs and nonprofit "doing good" and toward getting real jobs done.

Running Prisons as a Business. The proper way to mimic the free world of work as closely as possible is to encourage profit-and-loss employment of prison labor by private enterprise. Prisoner-run firms might even be allowed, provided the activity is consistent with orderly operation of the facility.

Inmates are eager to work for a variety of reasons: to relieve monotony, to earn money wages and to claim good time credit and early release. What about prisoner wages? Let them be flexible and set competitively. Prisoners and prison labor pools expected to yield low value-added will attract low offers and vice versa for high value. The evidence shows that for products that need entry-level, unskilled workers who are reliable and stable (light mechanical assembly, welding, sorting, data entry, etc.), inmates can be competitive with free world workers in terms of quality and productivity, given close supervision and clear work standards. We can put many of the problems of prison industry into better - competitive - hands.

What about the choice of businesses and markets? Two methods are available. First, allow prison authorities to innovate and choose, aided by private-sector marketing and management consultants. Second, solicit private-sector bids for contracts and leases on convict labor and choose among the proposals. Only businesses can really succeed in business. So the answers to questions about what to produce and how can be answered by the competitive marketplace.

Policy Options. Repeal of federal restrictions on prison labor would allow the states to design their own lease and contract systems. Conditions and criteria would differ among the states. States could lease labor to industries both inside and outside prisons and retain final control, inspection and auditing responsibilities. Allowing state authorities maximum latitude in negotiating prison lease deals would benefit taxpayers, prisoners and crime victims and would improve public safety over the long run. As the Houston Chronicle put it in a recent editorial, "The advantages to society of prison jobs vastly outweigh any disadvantages."

Comprehensive legislation from the U.S. Congress may be the best approach because a coherent package would make the goals and methods clear and likely would elevate the political discussion as well.

NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

1 Greg Wees, "Inmate Population Expected to Increase 43 Percent by 2002," Corrections Compendium , April 1996, Vol. XXI, p. 1.

2 Howard B. Gill, "The Prison Labor Problem," Annals of the American Academy of Political and Social Science , September 1931, pp. 83-101.

3 Alexis M. Durham, "The Future of Correctional Privatization: Lessons from the Past," in Gary W. Bowman, Simon Hakim and Paul Seidenstat, eds., Privatizing Correctional Institutions (New Brunswick, NJ: Transaction Publishers, 1993), p. 39.

4 Barbara J. Auerbach, "Listing of Certified Prison Industry Enhancement Programs," U.S. Department of Justice, Bureau of Justice Assistance, mimeo, March 31, 1996.

5 U.S. Department of Justice, Bureau of Justice Statistics, Sourcebook of Criminal Justice Statistics 1993 , p. 634, Table 6.71.

6 See, for example, the 1990 market study of the unhappy government end users of Federal Prison Industries products conducted by Deloitte & Touche for the U.S. Congress, as described by Ann K. Nicknish, "Building Furniture Behind Bars," Furniture Design and Manufacturing , December 1995, pp. 88-91.

7 Amanda Wunder, "Survey Summary: Prison Industries & Inmate-Employees," Corrections Compendium , October 1994, pp. 9-22. Federal Prison Industries (FPI) points out that it is "responsible for creating job opportunities for approximately 25 percent of the sentenced Federal inmate population," in "Addressing the Effect of Federal Prison Industries on the Private Sector in General and the Furniture Industry Specifically," FPI, March 1996, mimeo.

8 Texas Department of Criminal Justice, 1994 Annual Report , pp. 60-61; and Nelson Antosh, "Farmers in the Cell: Texas' Prison-Farm System Grows into Agricultural Giant," Houston Chronicle , November 26, 1995, p. 1D.

9 Warren E. Burger, "Prison Industries: Turning Warehouses into Factories with Fences," Public Administration Review , November 1985, pp. 754-57.

10 Gill, "The Prison Labor Problem," p. 88.

11 Ibid.

12 David Frum, "Working for the Man," American Spectator , August 1995, p. 48.

13 The Texas state comptroller's office says that the earnings of prisoners who work typically are apportioned 20 percent each to costs of incarceration, taxes and compensation to victims, and 10 percent each to personal use, savings, legal obligations and family support.

14 Felons Sentenced to Probation in State Courts , 1986, U.S. Department of Justice, Bureau of Justice Statistics, NCJ-124944, November 1990.

15 Barbara J. Auerbach, George E. Sexton, Franklin C. Farrow and Robert H. Lawson, Work in American Prisons: The Private Sector Gets Involved , U.S. Department of Justice, National Institute of Justice, May 1988, pp. 46 and 65.

16 Wunder, "Survey Summary."

17 Timothy J. Flanagan, "Prison Labor and Industry," in Lynne Goodstein and Doris Layton MacKenzie, eds., The American Prison: Issues in Research and Policy (New York: Plenum Press, 1989), pp. 135-61.

18 William G. Saylor and Gerald G. Gaes, "Interim Report: The Effect of Work Experience, Vocational and Apprenticeship Training on the Long-Term Recidivism of U.S. Federal Prisoners," U.S. Federal Bureau of Prisons, rev. November 6, 1995, p. 1.

19 William G. Saylor and Gerald G. Gaes, "PREP Study Links UNICOR Work Experience with Successful Post-Release Outcome," Corrections Compendium , October 1994, pp. 5-8.

20 Saylor and Gaes, "Interim Report," p. 3. It should be noted, however, that a 1984 Utah study and similar studies in the early 1980s in Ohio and Florida could not find a significant difference in recidivism between those who worked while in prison and those who did not. The same was true of a 1988 study in New York state. See K. E. Maguire, T. J. Flanagan and T. P. Thornberry, "Prison Labor and Recidivism," Journal of Quantitative Criminology , March 1988, pp. 3-18. Inmate release histories from the Lockhart, Texas, PIE program as of August 1996 showed that, of the 133 offenders released between September 1993 and July 1996, only seven (5 percent) have had post-release supervision revoked or escaped supervision, although a disturbing 32 (24 percent) were unemployed. Letter from Cathy Drake, assistant director of specialized supervision, Texas Department of Criminal Justice, August 22, 1996.

21 Steven Elbow, "Privatization of Prison Labor," Isthmus, Madison , WI, October 1995.

22 Peter H. Rossi, Richard A. Berke and Kenneth J. Lenihan, Money, Work and Crime: Experimental Evidence (New York: Academic Press, 1980), pp. 277-78.

23 American Correctional Association, The American Prison: From the Beginning...A Pictorial History (Laurel, MD: ACA Publishers, 1983), p. 15.

24 Ibid., pp. 2-27, and Michel Foucault, Discipline and Punish: The Birth of the Prison (New York: Vintage Books, 1978), pp. 1-20.

25 American Correctional Association, The American Prison , p. 14.

26 Gill, "The Prison Labor Problem."

27 Harry Elmer Barnes, "The Economics of American Penology as Illustrated by the Experience of the State of Pennsylvania," Journal of Political Economy , October 1921, pp. 640-41.

28 W. David Lewis, From Newgate to Dannemora: The Rise of the Penitentiary in New York , 1796-1848 (Ithaca, NY: Cornell University Press, 1965), p. 42.

29 Ibid., p. 33.

30 Ibid., p. 99, citing 48th session document.

31 Orlando F. Lewis, The Development of American Prisons and Prison Customs, 1776-1845, with Special Reference to Early Institutions in the State of New York (Montclair, NJ: Patterson Smith, 1967 [1922]), p. 332.

32 Cited in Lewis, From Newgate to Dannemora , p. 100.

33 During and after the Civil War, the piece-price arrangement developed in Northern prisons. Private contractors supplied raw materials with which prisoners manufactured goods within the prison, supervised entirely by prison officials. The contractors then paid a fixed price for each manufactured product and sold it on the free market. Responding to protectionist pressure from labor unions and some businesses in the 1870s, many prison systems turned to production processes owned and controlled exclusively by government. In the public account system, convicts worked in state-owned and -operated industry within prison walls exclusively, although products could be sold on the open market. In the public-use or state-use system, products were not only produced but consumed exclusively within the government sector as well.

34 Donald R. Walker, Penology for Profit (College Station, TX: Texas A&M University Press, 1988), p. 192.

35 Based on W.J. Michael Cody and Andy D. Barnett, "The Privatization of Correctional Institutions: The Tennessee Experience," Vanderbilt Law Review 40 (1987), pp. 829-49.

36 Except as noted, this section is based on Walker, Penology for Profit .

37 Texas Department of Criminal Justice, Statistical Report, FY 1994 , Institutional Division, p. 21.

38 In the 1890 census, only 26 percent of those in prisons and jails in the United States had served a prior prison term, and only 15 percent of those locked up in the South Central region had. Unfortunately, the prison and jail data were not separated, probably diminishing the percentage reported with a prior prison sentence. Between 1926 and 1936, the percent of prisoners received by state and federal prisons who had served prior prison sentences grew from 44 percent to 56 percent, suggesting higher recidivism. During the 1970s, about one-third of prisoners released from state prisons returned to prison within three years. See U.S. Department of Justice, Bureau of Justice Statistics, Historical Corrections Statistics in the United States , 1850-1984, pp. 62, 63. From 1895 to 1900, only 9 to 10 percent of federal offenders received from the courts had known prior commitments, but the share rose to 23 percent by 1925 and 54 percent by 1935, declined to 49 percent in 1945 and rose to 61 percent in 1970. The share had declined to 43 percent by 1984 (see p. 166 of Historical Corrections Statistics ). A pattern of higher recidivism rates is also suggested in the studies cited in Daniel Glaser, The Effectiveness of a Prison and Parole System (Indianapolis, IN: Bobbs-Merrill, 1964), p. 25, and Richard B. Freeman, "The Labor Market," in James Q. Wilson and Joan Petersilia, eds., Crime (San Francisco, CA: Institute for Contemporary Studies, 1995), p. 189.

39 Lewis, From Newgate to Dannemora , p. 187.

40 Glen A. Gildemeister, Prison Labor and Convict Competition with Free Workers in Industrializing America, 1840-1890 (New York: Garland, 1987), especially ch. 10 and 11. Herman Lee Crow argues that Texas labor camps had both high death rates and escape rates in the 1870s and 1880s. See Crow, A Political History of the Texas Penal System - 1829-1951, Ph.D. diss., University of Texas, Austin, TX, 1964, pp. 143-44.

41 Walker, Penology for Profit , p. 59.

42 Lewis, From Newgate to Dannemora , p. 197. Years earlier, discussion had swirled around which prisoners should be allowed to work, some insisting that "only felons serving life sentences should have their punishment alleviated by being allowed the diversion of labor." Lewis, p. 66.

43 Another effort at making prisons self-supporting was mounted in New York in 1877, and Lewis Pilsbury, described as an "all-powerful superintendent," cut the prison expense to taxpayers by 79 percent, from $317,000 in 1876 to $67,800 in 1878 before new legislative restrictions caused deficits to resume their growth. Blake McKelvey, American Prisons: A Study in American Social History Prior to 1915 (Montclair, NJ: Patterson Smith, 1968 [1936]), p. 98.

44 Ibid., p. 102.

45 Barnes, "The Economics of American Penology as Illustrated by the Experience of the State of Pennsylvania," pp. 619, 640-41. Barnes also observed, "While the state-use system has quite generally come to be regarded as the most satisfactory method of controlling prison labor, it has rarely been found successful unless the purchase of prison-made products, when available, has been made compulsory with state institutions." (p. 629).

46 American Correctional Association, The American Prison , p. 158.

47 By 1905, only 3,654 prisoners in the nation, or 7 percent, were leased, down from 9,104, or 20 percent, in 1885. Gill, "The Prison Labor Problem."

48 Telephone conversation with Jim Rose, Tennessee Department of Corrections, Commissioner's Office, July 31, 1996.

49 Walker, Penology for Profit , p. 185.

50 Walker reported without question the allegations of abuse. For example, he was astonished when the state branch of the Society for the Friendless, a voluntary society headed by eminent Texans and devoted to prison reform and programs to keep the young in schools, prevent lives of crime and assist released prisoners "visited [in 1907] almost every location in the state where convicts were kept and yet their descriptions of what they found bore virtually no resemblance to the horrible situation that existed. In a sense, therefore, their activities constituted a disservice to the people of Texas, particularly because the organization was headed by such a distinguished body of men." Penology for Profit , p. 183.

51 Gill, "The Prison Labor Problem," p. 88.

52 Gwen Smith Ingley, "Inmate Labor: Yesterday, Today and Tomorrow," Corrections Today , February 1996, p. 28.

53 Norval Morris and David J. Rothman, eds., The Oxford History of the Prison (New York: Oxford University Press, 1995), p. 186.

54 The courts until recently have interpreted the boundaries of the interstate commerce clause to be virtually unlimited, so the Ashurst-Sumners Act was severely restrictive on almost all prison industry.

55 "The result," writes Gwen Smith Ingley, American Corrections Association official, in something of an understatement, "was a significant drop in correctional industries' employment levels." Ingley, "Inmate Labor: Yesterday, Today and Tomorrow," p. 30.

56 Frum, "Working for the Man," p. 49.

57 A.P. Thomas, "Outdated Laws Shackle Prison Reform," Wall Street Journal, March 30, 1995.

58 Flanagan, "Prison Labor and Industry."

59 Auerbach, "Listing of Certified Prison Industry Enhancement Programs." Of the $63 million earned by prisoners in the PIE program, besides the $13 million in room and board payments, $4.5 million went to restitution of victims, $4 million to support of prisoner families and $7.3 million to taxes. The prisoners received the remaining $34 million.

60 American Correctional Association, Quarterly Financial Summary, Prison Industry Enhancement Certification Programs , March 1, 1995.

61 Auerbach et al., Work in American Prisons , p. 14.

62 Ingley, "Inmate Labor: Yesterday, Today and Tomorrow."

63 Auerbach, "Listing of Certified Prison Industry Enhancement Programs."

64 Prior to 1988, Texas law prohibited paying prisoners for working.

65 Nicknish, "Building Furniture Behind Bars." Also see Joe Davidson, "Furniture Makers Allege Prison Agency May Well Force Them Out of Business," Wall Street Journal , February 7, 1996, p. B2.

66 Federal Prison Industries, "Addressing the Effect of Federal Prison Industries on the Private Sector in General and the Furniture Industry Specifically."

67 Reese Erlich, "Prison Labor: Workin' for the Man," Arm the Spirit , Toronto, November 30, 1995. Morgan Reynolds, the author of this study, visited the Lockhart prison and found working conditions to be humane.

68 Ibid.

69 Ibid.

70 Christian Parenti, "Making Prison Pay," The Nation , January 29, 1996, p. 13.

71 Ibid., p. 12.

72 Ibid., p. 13.

73 The economist Adam Smith wisely observed, "Consumption is the sole end and purpose of production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer." Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library 1937 [1776]), ch. 8.

74 Robert Rector and Patrick Fagan, "How Welfare Harms Kids," Heritage Foundation Backgrounder , June 5, 1996, Washington, DC.

75 Auerbach et al., Work in American Prisons , pp. 2-3. For guidance on the proper work program, the unions point to their apprentice electrician program for San Quentin inmates, which has trained only six apprentices.

76 Friedrich von Hayek, ed., Capitalism and the Historians (Chicago: University of Chicago Press, 1954).

77 For a recent example, see Paul Wright, "Slaves of the State: Prison Laborers Do Time in Factories with Fences," Prison Legal News , 1995; Wright is a Washington state prisoner and coeditor of PLN, a monthly magazine reporting on prison news and legal affairs.

78 Stanley Lebergott, "Wages and Working Conditions," in David R. Henderson, ed., Fortune Encyclopedia of Economics (New York: Warner Books, 1993), pp. 503-08.

79 David Oshinsky, Worse than Slavery: Parchman Farm and the Ordeal of Jim Crow Justice (New York: Free Press, 1996), p. 56.

80 U.S. Department of Justice, Bureau of Justice Statistics, Historical Corrections Statistics in the United States , 1850-1984, p. 30, and BJS Bulletin, Prisoners in 1994 , August 1995, NCJ-151654.

81 Oshinsky, Worse than Slavery , pp. 46, 61.

82 The difference government action can make in protecting the human rights of prisoners can be seen in the transporting of British criminals to Australia in the 19th century. When the British government paid ships' captains a flat fee for each convict who embarked from a British port, the survival rate was as low as 40 percent. Edwin Chadwick, a British official, changed the payment system so that the captains got a fee for each convict who disembarked in Australia instead. Very shortly the survival rate of prisoners rose to more than 98 percent. Robert B. Ekelund Jr. and Robert F. Hebert, A History of Economic Theory and Method , third ed. (New York: McGraw Hill, 1990), p. 215.

83 The Texas Legislature, for example, passed a law in 1995 to eliminate good time credits toward early release for inmates who file frivolous lawsuits against the Texas Department of Criminal Justice. Although not in the Texas law, those convicted on plea agreements should risk forfeiting some privileges if they contest their convictions and lose.

84 U.S. Department of Justice, National Institute of Justice, Topical Bibliography on Correctional Industries , doc. 118.

85 Auerbach et al., Work in American Prisons , pp. 44-45.

86 Houston Chronicle , March 30, 1995, p. 32A.

About the Author

Morgan O. Reynolds, an NCPA Senior Fellow, director of the NCPA Criminal Justice Center and a professor of economics at Texas A&M University, received his Ph.D. in Economics from the University of Wisconsin in 1971. He has published many articles in academic journals, edited W.W. Hutt: An Economist for the Long Run (1986), and authored Public Expenditures, Taxes, and the U.S. Distribution of Income (1977), Power and Privilege: Labor Unions in America (1984), Crime by Choice: An Economic Analysis (1985), Making America Poorer: The Cost of Labor Law (1987), and Economics of Labor (1995). He has been a consultant for the National League of Cities, the U.S. Department of Labor and many private organizations. He also serves on the board of the Journal of Labor Research and the Review of Austrian Economics and is a member of the Mont Pelerin Society and an adjunct scholar of the Cato Institute.

About the NCPA

The National Center for Policy Analysis is a nonprofit, nonpartisan research institute, funded exclusively by private contributions. The NCPA developed the concept of Medical Savings Accounts, which are included in the 1996 health care bill passed by Congress and have been adopted by a growing number of states. Many credit NCPA studies of the Medicare surtax as the main factor leading to the 1989 repeal of the Medicare Catastrophic Coverage Act.

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