NCPA - National Center for Policy Analysis

Oregon Tries to Make a Profit on its Prisoners

March 15, 2001

Until 1994, Oregon used its prison inmate work program primarily as a rehabilitative tool, keeping inmates busy and teaching them usable skills. But that year, Oregon voters overwhelmingly approved a measure requiring the work programs be run "to achieve a net profit." Other states have adopted similar practices.

Oregon's program, called Inside Oregon Enterprises, leases inmates to companies in need of labor.

  • Although the inmates must be paid market wages, employers offer no retirement, vacation or health benefits -- nor do they pay for Social Security, workers' compensation or Medicare.
  • According to IOE, hiring inmates can cut an employer's payroll costs by 35 percent.
  • Depending on the work performed, the state calculates it can earn a profit of between 76 cents and $1.14 for every hour of prisoner labor.
  • The Oregon Department of Corrections expects that by 2006 it will make $10 million a year from its inmates.

That prospect is so appealing the state plans to equip each new prison with built-in factory space.

Source: Joseph T. Hallinan (author of "Going Up the River: Travels in a Prison Nation," Random House), "Prison as Profit Center," Wall Street Journal, March 15, 2001.

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