Abstract

The United States has seen a recent increase in the number of private firm/correctional facility partnerships that uses prison labor to manufacture goods and provide services. On the rise since the creation of the Prison Industries Enhancement (PIE) program in 1979, prison-industry partnerships have risen 200 percent. Described by some as a program designed to fill the boring days of an inmates’ life and a way to prepare them for life after release by giving them marketable skills, PIE fills a need for cheap labor. However, many others have begun to notice the fundamental flaws with the program, among them low wages, the increased number of inmates, and the refusal by correctional facilities to allow inspectors into plants. Many businesses and unions have also begun to accuse PIE of not meeting Congressional requirements. Far from a simple domestic problem, prison labor calls into question United States’ international bans on foreign goods made by prisoners.

Description

Beyond the confines of our own nation, prison labor is making a big impact on the global marketplace. It has effected trade negotiations and has made it into international trade agreements like the GATT. Even constituting such a small portion of global GDP, prison labor deserves attention by the general public as a hot international issue. What do those opposed cite as reasons to do away with prison labor? What do others say about the benefits?

 

The History of Prison Labor

Throughout US history, there have been many laws concerning incarcerated labor. The most recent legislation, and the laws we still adhere to today, were created during the Depression to protect the fragile jobs of free citizens. The 1935 Hawes-Cooper Act and the 1940 Ashurst-Sumner Act made interstate trading of prison-made goods illegal (Miller 1). During the 1970’s, however, many of these laws were amended. In 1979 the Justice System Improvement Act allowed for privatization of prisons and for the transport of their goods across state boundaries (Miller 2). After this change in law, prison industry profits jumped from $392 million to $1.31 billion (Erlich 3). However, the Depression legislation still holds true for state and federally run prisons.

Pro Prison Labor

Prison-industry partnerships benefit both firms and inmates. Firms are provided with a stable, motivated work force, reduced overhead, an alternative to "off shore" operations, and a "made in the USA" label. Inmates are provided with income to offset the cost of incarceration, compensate crime victims and provide family support (Prison Industry Enhancement Program). In addition, studies show that inmates that work while incarcerated are 26-60 percent less likely to commit repeat offenses (CNN).

Congressional regulations must be met, thereby ensuring that the use of prison labor does not hurt the community (PRIDE Enterprises). Inmates must be paid local minimum wage and local unions must be consulted before partnerships can occur. In addition, the Federal Prison Industries employs over 22,560 inmates, and partnerships employ many members of the surrounding community (ACLU Legislative Update). For example, in Pelican Bay, a Californian community that once had an unemployment rate of over 20 percent, a new correctional facility has provided 1,500 jobs, and has an annual payroll of over $50 million. Beyond directly affecting the community, the presence of the prison and its factory has created a need for a huge Ace Hardware store, a hospital and a K-Mart (The Prison-Industrial Complex).

Con Prison Labor

While there are many regulations set on the use of prison labor by congress, acts are being created that would greatly reduce their effectiveness. Also, many prisons and firms are finding ways to work around restrictions. For example, prison-made goods such as office furniture, clothing and house goods are not permitted to be sold across state boundaries unless they are being sold overseas. Many partnerships are working around this law by sending their goods off shore to an intermediary, and then selling them to other states within the US from there (Virginia Prisons are Opening for Business).

"Prison Blues" Jeans... "Made on the Inside to be Worn on the Outside"

In 1994, the state of Oregon, by overwhelming majority, passed a constitutional amendment that requires 100% of all state held inmates to work for pay during their incarceration. The Inmate Work Act has fueled rapid expansion of Oregon prison industries in the past few years and has paved the way for many joint ventures.

In order to manage these new industries, Oregon DOC created UniGroup, which manages the different groups. As of the year 2000, UniGroup employs over 450 inmates in the production of denim clothing alone (Elbow 2). Most successful of all their denim lines is a group known as Prison Blues.

Touting the tag line “built on the inside to be worn on the outside”, Prison Blues has found a market in the United States, France, Germany, Italy and Japan where a fascination with hip hop and “gangsta” lifestyles has elevated the price of these jeans to one comparable to Levi’s… often reaching more than $80 a pair (Elbow 2). In the year of their creation, Prison Blues reached over $1.2 million in export revenues with that number rising steadily as the number of retailers carrying the brand has increased (Wright 3).

According to the official Prison Blues website, since the companies’ creation in 1989, the industry has allowed a select group of inmates to learn useful skills that will help them upon release. Work conditions model those on “the outside” including a rigorous interview process and a “bright and energetic” factory designed to increase productivity and help inmates to appreciate the time they get to spend working. This environment has led to a 33% state wide recidivism rate compared to a 46.8% national rate.

 

Related Cases

The following cases deal with the exploitation of labor in international markets. The Prisons case deals with the controversy between China and the US during Most Favored Nation talks, and is an excellent complement to this paper. The remaining cases deal mostly with the exploitation of women and children in third world countries.

© Katie Habecker

Spring 2003

Prison Labor in the International Arena

The issue of prison labor appears in many international legal arguments. From UNESCO to the WTO, the rules regading prison labor are varied. Every legal organization defines prison labor differently, and has different requirements for its products depending on its classification. For the purposes of this paper, prison labor will be defined as any labor undertaken by convicts housed within the confines of a prison, both private and public that produces either a good or a service. Within the context of international laws, these goods and services must be transported across international boundaries. The focus of the following will be the United States’ prison labor and its place in the international marketplace.

United States and the moral battle over prison labor

The United States is going through a transitionary period with regards to prison labor. Greatly restricted domestically during the Great Depression, US prison labor is currently undergoing a period of liberalization. With the creation of private prisons, laws have begun to change with regards to inmate labor.

In the past two decades, the United States Department of Correctional Assistance has created, with the permission of Congress, the Prison Industries Enhancement Program (PIE). This new program has enabled prisons to combine with private firms to market products on a wider scale. Participating industries must comply with federal regulation that state that inmates must be paid the prevailing minimum wage for local similar work and receive worker’s compensation. At the end of the day, about 80% of this money goes to costs for keeping the prisoner, victim restitution and help for their families.

While there are many domestic issues with the role of prison labor in the US and its effects on the national job market, many international laws also address this issue. However, according to international bodies, prison labor in the United States is perfectly legal.

Prison Labor in International Agreements

Many of those opposed to prison labor in the US cite article XX of the GATT which states,

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in the Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
...
e) relating to the products or prison labor.

This article states in clear terms that the GATT agreement in no way restricts the use of prison labor as long as it does not violate any other terms of the contract while at the same time leaving "prison labor" open to individual interpretation. It makes no mention of wages to be paid, labeling or human rights.

UNESCO and its affiliated organizations have also made many references and agreements on the use of prison labor, mostly in regards to human rights. For example, the Convention concerning Forced or Compulsory Labour under the ILO discussed and defined forced labor in the international marketplace. However, the Convention provided for, "the suppression of such labor in all its forms subject to exceptions relating to compulsory military service, normal civic obligations, convict labor and minor communal services" (UNESCO 72). So, this agreement, and others like it under UNESCO, makes prison labor an exception.

American protestors or prison labor often cite international agreements, but these citations are often misquoted excerpts. For example, Karen Miller writes, "Article four of the UN Declaration of Human Rights declares ‘no one shall be held in slavery or servitude’ Certainly the dehumanizing aspect of treating humans (convicted criminals or not) as ‘raw materials’ for increasing profit is the first step to slavery" (8). The role of international agreements on the use of prison labor in the US is legally very small, but significant when portions are used by activists.

Importing and exporting

One place where the role of prison labor is internationally significant for the US is in trade agreements between the USA and other nations. Perhaps most memorable is the most favored nation deliberations with China and the protests by Americans of China’s use of prison labor. Using section 307 of the United States’ Tariff Act of 1930, 19 USC 1307, which "prohibits the importation of products of forced labor from any country" (USCC Policy Paper 1) protestors argued that China should not be allowed toe export their goods to the US. The United States and China finally agreed upon a Memorandum of Understanding in which China agreed not to send those products in order to pacify the public. However, it is important to note here that most prison made goods exported from China are made by political prisoners, not criminal.

However, while the United States outlaws importing convict made goods, it does not outlaw exporting them. Companies are encouraged to ship their goods overseas to make their profits, as seen in the "Prison Blues" story above. With the creation of PIE programs, prisons are looking to make more profits on their goods and services. Due to US law prohibiting the transportation of prison made goods over state boundaries, many prison industries have begun to sell overseas instead. Websites feature automatic translators in a variety of languages, and cost cuts for international customers. According to liberal group Africa 2000, "a California prison made product known as Gangsta Blues denim jeans is marketed in Japan, a nation which, quipped a marketing director of Prison Industries, ‘has a kind of fascination with crime in California. It’s kind of strange’" (Africa 2000 1).


 

Geographic Locations

a. Geographic Domain: North America

b. Geographic Site: North America

c. Geographic Impact: United States of America

Sub-National Factors

No

Type of Habitat

Temperate

Who's Involved?

The prison industry is very complex. There are multiple levels of prisons, including state, federal and private, as well as multiple types of industries including government contracts and joint ventures. For each combination of these variables, there is different trade data, due to different laws restricting each group. There are few published statistics. However, according to Kathleen Koch of CNN, inmates working for outside contracts has increased 200% over the past few years, and looks like it will continue to grow. The main exporters of all goods and services created by prison industries are, of course, the prisons.

The New Reality of US Prisons

Both private and public prisons recruit outside businesses to begin joint ventures. Laws restricting these ventures are rigid, but many have found benefits to the arrangement. Goods produced within these ventures may be sold across state lines. Goods from all prisons may be sold overseas. Most notable among these ventures are PIE, (government run prisons with joint ventures) and private corporations such as Wackenhut Industries, which trades on the New York Stock Exchange, and owns prisons not only in the US, but in many European countries as well. However, according to Jeffrey Kling and Alan Krueger of Princeton University, prison labor constitutes such a small portion of the national economy to make any monetary argument of its effects unnecessary. Currently, prison labor GDP increases by .2% a year on its own (1).

Who Buys the Goods?


There are many importers of prison made goods. Many companies use prison labor, so it is likely that most Americans have bought goods or used services provided or created by inmates. Items ranging from clothing, such as Victoria’s Secret and blue jeans, and computers to services such as data entry and telemarketing are all made and performed by prison labor. As another bonus, prison made goods do not have to be labeled as such and often are appealing to companies who wish to be able to put "made in the USA" on their products.

Companies that Use Prison Labor

In the USA

MicroJet, Nike, Lockhart Technologies, Inc., United Vision Group, Chatleff Controls, TWA, Dell Computers, Microsoft, Eddie Bauer, Planet Hollywood, Redwood Outdoors, Wilson Sporting Goods, Union Bay, Elliot Bay, A&I Manufacturing, Washington Marketing Group, Omega Pacific, J.C. Penney, Victoria's Secret, Best Western Hotels, Honda, K-Mart, Target, Kwalu, Inc., McDonald's, Hawaiian Tropical Products, Burger King, "Prison Blues" jeans line, New York, New York Hotel/Casino, Impereal Palace Hotel/Casino, Crisp Country Solid Waste Management Authority, "No Fear" Clothing Line, C.M.T. Blues, Konica, Allstate, Merrill Lynch, Shearson Lehman, Louisiana Pacific, Parke-Davis, Upjohn

Elsewhere

Heinz-Wattie, Living Earth Co., Gala Gardens, Layton's Linen Hire, Morro Holdings, Encore Tech., Peek Displays, New Zealand Post, Ideal Print, Royal (NZ) Foundation for the Blind, Packaging Specialists, Taylor's Group, Cortex Group, Premier Bin and Pallet Supplies, Price McClaren, Stages, Larson's Concrete and Drainage, Calix Nursery, Garden City Composting, Southern Seeds Tech., Christchurch City Council. Fresh Direct, Fergusson Services

Information taken from "Prison Labor: Some Facts and Issues" by Karen Miller

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Environmental Problem Type

Rights

Resource Impact and Effect

Low and Product

Urgency and Lifetime

Moderate and 10-20 Years

Substitutes

None

Culture

No

Trans-Boundary Issues

No.

Rights

Yes.

Relevant Literature

"Court Decisions". Arizona Business Gazette. Weekly Edition 2: March 11, 1999.

"PRIDE Enterprises" September 25, 2002.

State Use Industries of Maryland. "Prison Industry Enhancement Program". March 2001.

Texas Youth Commission. "Prison Industries Enhancement Program (PIE)". May 18, 2000.

Crystal, Roger E. "Prison Labor is Unfair Competition". Geospatial Solutions v.12:1. Duluth; January 2002;11.

Friedmann, Alex. "Prison Privitazation... The Bottom Line". Corp Watch. August 21, 1999.

Hornig, Doug. "The Perils of Prison Labor". Business Week, March 19 2001.

Koch, Kathleen. "Private Employers Increasingly Tap Prison Labor Force". November 6, 1999.

Lachenauer, Karen. "Prison Labor Industry Faces Organization, Legal Changes". The Business Journal. July, 1999. Tampa: v.19:27; 29.

Murphy, Laura and Rachel King. "Letter to House and Senate Dept. of Defense..." September 16, 2002.

Parenti, Christian. "The Prison Industrial Complex: Crisis and Control". Corp Watch. September 1, 1999.

Pens, Dan. "Virginia Prisons Open for Business". Corp Watch. November 1, 1998.

Singleton, Laura. "Felons: The American Worker's Newest Competitor?" The Ultimate Field Guide to the US Economy. November 13, 2002.

Carver, Tom. "US prison population nears two million". BBC News. March 26, 2001.

Testimony of Charles W. Winwood. March 25, 2003.

Erlich, Reese. "Prison Labor: Workin' for the Man". March 4, 2003.

EPI Domestic Outsourcing Services. "Why Employ the Inmate Workforce?" February 10, 2003.

Hayden, John. "Private Prisons do not Bode Well for America". February 4, 2003

Africa 2000. "The Exploitation of Cheap Prison Labor". March 25, 2003; 1-3.

Miller, Karen. "Prison Labor: Some Facts and Issues". February 27, 2003; 1-14.

UNESCO. "A Guide to Human Rights: Institutions, Standards, Procedures; 2001". March 25, 2003; 72-73.

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