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21st-Century Slaves: How Corporations Exploit Prison Labor


This article has been updated.



Incarceration Nation

It’s no secret that America imprisons more of its citizens than any other nation in history. With just 5 percent of the world’s population, the US currently holds 25 percent of the world's prisoners. "In 2008, over 2.3 million Americans were in prison or jail, with one of every 48 working-age men behind bars," according to a study by the Center for Economic and Policy Research(CEPR). That doesn’t include the tens of thousands of detained undocumented immigrants facing deportation, prisoners awaiting sentencing, or juveniles caught up in the school-to-prison pipeline. Perhaps it’s reassuring to some that the US still holds the number one title in at least one arena, but needless to say the hyper-incarceration plaguing America has had a damaging effect on society at large.

The CEPR study observes that US prison rates are not just excessive in comparison to the rest of the world, they are also "substantially higher than our own longstanding history." The study finds that incarceration rates between 1880 and 1970 ranged from about "100 to 200 prisoners per 100,000 people." After 1980, the inmate population "began to grow much more rapidly than the overall population and the rate climbed from "about 220 in 1980 to 458 in 1990, 683 in 2000, and 753 in 2008."

The costs of this incarceration industry are far from evenly distributed, with the impact of excessive incarceration falling predominantly on African-American communities. Although black people make up just 13 percent of the overall population, they account for 40 percent of US prisoners. According to the Bureau of Justice Statistics (BJS), black males are incarcerated at a rate "more than 6.5 times that of white males and 2.5 that of Hispanic males and "black females are incarcerated at approximately three times the rate of white females and twice that of Hispanic females."

Michelle Alexander points out in her book The New Jim Crow that more black men "are in prison or jail, on probation or on parole than were enslaved in 1850." Higher rates of black drug arrests do not reflect higher rates of black drug offenses. In fact, whites and blacks engage in drug offenses, possession and sales at roughly comparable rates.  

Incentivizing Incarceration



"If they refuse to work, they are moved to disciplinary housing and lose canteen privileges" along with "good time credit that reduces their sentences,” reports Chris Levister. To top it off, Abe Louise Young reports in The Nation that the federal government subsidizes the use of inmate labor by private companies through lucrative tax write-offs. Under the Work Opportunity Tax Credit (WOTC), private-sector employers receive a tax credit of $2,400 for every work release inmate they employ as a reward for hiring “risky target groups” and they can "earn back up to 40 percent of the wages they pay annually to target group workers."



The Reinvention of Slavery

The exploitation of prison labor is by no means a new phenomenon. Jaron Browne, an organizer with People Organized to Win Employment Rights (POWER), maps out how the exploitation of prison labor in America is rooted in slavery. The abolition of slavery dealt a devastating economic blow to the South following the loss of free labor after the Civil War. So in the late 19th century, "an extensive prison system was created in the South in order to maintain the racial and economic relationship of slavery," a mechanism responsible for re-enslaving black workers. Browne describes Louisiana’s famous Angola Prison to illustrate the intentional transformation from slave to inmate:




The Black Codes were a set of laws that "criminalized legal activity for African Americans" and provided a pretext for the arrest and mass imprisonment of newly freed blacks, which caused the rate of African Americans prisoners to “surpass whites for the first time”, according to Randall G. Sheldon in the Black Commentator. Convict leasing involved leasing out prisoners to private companies that paid the state a certain fee in return. Convicts worked for the companies during the day outside the prison and returned to their cells at night. The system provided revenue for the state and profits for plantation owners and wasn’t abolished until the 1930s.


Today’s corporations can lease factories in prisons, as well as lease prisoners out to their factories. In many cases, private corporations are running prisons-for-profit, further incentivizing their stake in locking people up. The government is profiting as well, by running prison factories that operate as "multibillion-dollar industries in every state, and throughout the federal prison system," where prisoners are contracted out to major corporations by the state.


The modern-day version of convict leasing was recently spotted in Georgia, where Governor Nathan Deal proposed sending unemployed probationers to work in Georgia's fields as a solution to a perceived labor shortage following the passage of the country’s most draconian anti-immigrant law. But his plan backfired when some of the probationers began walking off their jobs because the fieldwork was too strenuous.

There has also been a disturbing reemergence of the debtors’ prison, which should serve as an ominous sign of our dangerous reliance on prisons to manage any and all of society’s problems. According to the Wall Street Journal, "more than a third of all U.S. states allow borrowers who can't or won't pay to be jailed." They found that judges "signed off on more than 5,000 such warrants since the start of 2010 in nine counties." It appears that any act that can be criminalized in the era of private prisons and inmate labor will certainly end in jail time, further increasing the ranks of the captive workforce.

Who Profits?


Federal prisoners receive more generous wages that range from $0.23 to $1.25 per hour, and are employed by Unicor, a wholly owned government corporation established by Congress in 1934. Its principal customer is the Department of Defense, from which Unicor derives approximately 53 percent of its sales. Some  21,836 inmates work in Unicor programs. Subsequently, the nation's prison industry – prison labor programs producing goods or services sold to other government agencies or to the private sector -- now employs more people than any Fortune 500 company (besides General Motors), and generates about $2.4 billion in revenue annually. Noah Zatz of UCLA law school estimates that:




“In the 1990s, subcontractor Third Generation hired 35 female South Carolina inmates to sew lingerie and leisure wear for Victoria's Secret and JCPenney. In 1997, a California prison put two men in solitary for telling journalists they were ordered to replace 'Made in Honduras' labels on garments with 'Made in the USA.'"


“Unicor, says that in addition to soldiers' uniforms, bedding, shoes, helmets, and flak vests, inmates have 'produced missile cables (including those used on the Patriot missiles during the Gulf War)' and 'wiring harnesses for jets and tanks.' In 1997, according to Prison Legal News, Boeing subcontractorMicroJet had prisoners cutting airplane components, paying $7 an hour for work that paid union wages of $30 on the outside.”


In the Nation article that exposed BP’s hiring of inmates, Abe Louise Young details how BP tried to cover up its use of prisoners by changing the inmates' clothing to give the illusion of civilian workers. But nine out of 10 residents of Grand Isle, Louisiana are white, while the cleanup workers were almost exclusively black, so BP’s ruse fooled very few people. 

Private companies have long understood that prison labor can be as profitable as sweatshop workers in third-world countries with the added benefit of staying closer to home. Take Escod Industries, which in in the 1990s abandoned plans to open operations in Mexico and instead "moved to South Carolina, because the wages of American prisoners undercut those of de-unionized Mexican sweatshop workers," reports Josh Levine in a 1999 article that appeared in Perpective Magazine. The move was fueled by the state, which gave a $250,000 "equipment subsidy" to Escod along with industrial space at below-market rent. Other examples listed by Gordon Lafer in the American Prospect include Ohio's Honda supplier, which "pays its prison workers $2 an hour for the same work for which the UAW has fought for decades to be paid $20 to $30 an hour. Konica, which has hired prisoners to repair its copiers for less than 50 cents an hour. And in Oregon, where private companies can “lease” prisoners at a bargain price of $3 a day."

Even politicians have been known to tap into prison labor for their own personal use. In 1994, a contractor for GOP congressional candidate Jack Metcalf hired Washington state prisoners to call and remind voters he was pro-death penalty. After winning his campaign, he claimed to have no knowledge of the scandal. Perhaps this is why Senator John Ensign (R-NV) introduced a bill earlier this year to "require all low-security prisoners to work 50 hours a week." After all, The New York Times reminds us that "creating a national prison labor force has been a goal of his since he went to Congress in 1995."

In an unsettling turn of events lawmakers have begun ditching public employees in favor of free prison labor. The New York Times recently reported that states are "enlisting prison labor to close budget gaps" to offset cuts in "federal financing and dwindling tax revenue." At a time of record unemployment, inmates are being hired to "paint vehicles, clean courthouses, sweep campsites and perform many other services done before the recession by private contractors or government employees." In Wisconsin, prisoners are now taking up jobs that were once held by unionized workers, as a result of Governor Scott Walker’s contentious anti-union law.

Why You Should Care


According to a study by the Pew Charitable Trusts, “having a history of incarceration itself impedes subsequent economic success.” Pew found that "past incarceration reduced subsequent wages by 11 percent, cut annual employment by nine weeks and reduced yearly earnings by 40 percent." The study suggests that the best approach is for state and federal authorities to "invest in programs that reconnect inmates to the labor market," as well as "provide training and job placement services around the time of release." Most importantly, Pew suggests that in the long term, America must move toward alternative sentencing programs for low-level and nonviolent offenders, and issuing penalties that are actually proportionate with real public safety concerns.




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