NCPA - National Center for Policy Analysis

Economists To Revive Prisoner-Work Issue

May 20, 1999

In earlier days, prisoners in the United States were put to work. But labor unions and reformers backed legislation at the state and federal levels which banned employment of prisoners and trafficking in prison-made goods.

Now economists are taking a new look at the issue. The Center on Crime, Communities and Culture will host a conference led by four respected economists tomorrow at Georgetown University to debate the matter.

  • Currently, 17 percent of 127,000 federal prisoners work for pay under a government program known as Federal Prison Industries and 5,000 of 1.1 million state prisoners have jobs under an experimental program.
  • Most prisoners engage in "housework" type jobs related to the functioning of their own facilities -- while a small contingent operate under the FPI program, which had sales of $600 million last year.
  • Putting every prisoner to work at the minimum wage -- which would be highly unlikely -- would add a maximum of 0.2 percent to 1998's gross domestic product, estimate Princeton University economists and panel participants Alan Krueger and Jeffrey King.
  • "Production by prisoners creates rather than destroys jobs," argues Morgan O. Reynolds, a Texas A&M economist with ties to the National Center for Policy Analysis -- who notes that prison products would have a multiplier effect, engaging other workers in such tasks as producing raw materials and transporting finished goods.

Harvard economist Richard Freedman, another panelist, would avoid having prison industries compete with private businesses by concentrating on production of products the U.S. imports -- such as cheap plastic toys that are currently imported from China.

How would compensation be handled? Currently, FPI workers are paid between 23 cents and $1.15 an hour -- of which 50 percent goes to pay any court-ordered fines or orders for restitution, with the remaining 50 percent going to the prisoner.

Source: Darren McDermott, "Economists Join Debate on Prison Work," Wall Street Journal, May 20, 1999.


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