Wednesday, November 10, 2010

INSOURCING- A new concept about private sector job losses

As I wrote earlier in my Corporatocracy series, Webster is continually having to update their dictionary to keep up with trends and vocabulary indigenous to our new millennium.

Corporatocracy can best be described as: "A type of government in which huge corporations, through bribes, gifts, and the funding of ad campaigns that oppose candidates they don't like, become the driving force behind the executive, judicial and legislative branches".

Alongside this descriptive word and concept, another has come along - Insourcing . There is no current definition for this word in our Urban Dictionary or Websters. I plan to change that by defining in detail the concept of insourcing and who is responsible for the practice of it. First we must compare the word to it's cousin, Outsourcing.

Outsourcing has come to mean the transfer of jobs from one country to another country. The jobs are "outsourced" by corporate interests seeking higher profits through cheaper wages and other factors such as no EPA regulations in the country chosen by the corporation to replace the U.S. jobs.

Insourcing describes the process used by corporations to remove jobs from private sector labor markets and "Insource" them to prison industry operations here in the U.S. This allows for profits more in line with outsourcing, but eliminates the necessity for expensive transportation costs to return the finished goods to the U.S. for sale to consumers. It also allows manufacturers to attach lables to their goods marked "Made In The U.S.A." This is an important matter in today's markets. Americans want to buy American made products. This desire for patriotic purchasing has been around for a few decades now and was introduced by American manufacturers objecting to our purchasing of imported goods made in Japan, China, Taiwan, etc.

Insourcing of jobs is the "quiet" elimination of private sector jobs. Corporations wishing to participate in using prison labor, partner with prison industry operations under the federal Prison Industries Enhancement Certification Program (PIECP). 18 USC 1761(c) is the controlling federal statute of PIECP. Though private sector corporations are prohibited from closing private sector operations in favor of prison operations, they do so without consequence. There are other mandatory requirements that must be followed in order to participate in PIECP, but those also are rarely enforced.

The way these prison partnerships typically work is that a manufacturer wanting to increase profits moves their equipment, technology, materials and unfinished goods to a factory setting within a prison industry facility. Once up and running, the same products come off the assembly lines and are shipped as before. The difference is this, private sector employees of the company have been terminated or laid off. A handful of employees are usually kept on long enough to train inmates and prison supervisors in the manufacturing used to make the products. Once that is accomplished, they are also eliminated and their positions taken over by a prison industry supervisor.

This insourcing of labor creates quite a number of unemployed citizens. Burdens are placed on state and community social help programs, unemployment compensation, etc. So while the corporation saves lots of money in labor costs - no more unemployment insurance premiums, less expenses in lease of facilities (usually leased by the prison operators at $1.00 per year), and no more employee benefits such as medical insurance, vacations or paid time off - the communities they vacated are left to fund the unemployed left in their wake. In addition the local government loses taxes that were paid by the corporation, previous landlords of the facilities once leased to the corporations are left with vacant property and local shops and other businesses suffer a drop in sales due to the newly unemployed workers left behind.

Insourcing was never a very important topic to most - until 2008 when our economy began to collapse and unemployment grew by leaps and bounds. Only then did people begin to turn an eye toward the use of prison labor instead of private sector employees. Some of us questioned what could be done to stop the practice of losing jobs to prisoners. What we discovered was depressing; lawmakers had been hard at work enlarging this program and eliminating most regulatory measures and transferring actual oversight of the program to the very corporations and prison industries to be overseen. Corporations had just as actively been contributing campaign donations to lawmakers to ensure PIECP continued as modified without interference or regulation. Why is this such a big deal?

Most people are not aware that today prison industries are a booming business with gross sales in excess of $3 billion annually. Less than two decades ago their gross sales were less than $400 million. Prior to the early 1990's most prison industries limited sales to state agencies, departments or non-profit institutions like colleges and public schools, etc. Once corporate interests discovered PIECP that came to a screeching halt. Today prison made good are found on shelves in most major grocery stores, appliance outlets, designer clothing stores, wal-mart, kmart and many others. Prisoner made goods are now found in most homes in the U.S. Due to loop holes in the PIECP legislation, state prison industries are now able to manufacture and sell their products upon open markets in the state of manufacture without paying inmates much more than pennies on the hour for their labor. This has eliminated many small businesses, competitive private sector manufacturers and thousands of jobs nationwide. Today anyone can buy products made in prison with cheap prison labor.

To fully understand the subject of insourcing you need to also understand the basis for PIECP. A reading of the PIECP Final Guidelines at will inform that it was the intent of the lawmakers to implement this program with the basic goal of training inmates in job skills and technologies that would allow them to exit prison with the ability of becoming employed upon release and thus avoid a return to prison. That's the concept and reason for PIECP.

The program was never intended to serve as a cheap labor source for corporations but that is what it has become. This was accomplished through manipulations and lobbying by the corporations involved to change PIECP into what it is today. In order to succeed in this transformation it was necessary to reduce or eliminate altogether all oversight of the program. That is exactly what happened in the mid '90's.

The U.S. Department of Justice's, Office of Justice Programs (OJP) and Bureau of Justice Assistance (BJA) was given authority to oversee PIECP and enforce compliance with the mandated requirements put in place by Congress. In '95 this oversight and authority over the program was "outsourced" by the BJA to a private non-profit group - the National Correctional Industries Association (NCIA). The DOJ provided a nice healthy taxpayer grant to the NCIA for performing these oversight "duties" on behalf of the U.S. government.

Since 1995 the program has been so abused lawmakers back in 1979 would no longer recognize PIECP as the legislation they enacted that year. This abuse has come about because the NCIA is an organization made up entirely of prison industry administrators, employees of prison industries and their vendors and suppliers. All are actively involved in PIECP within their industries. Thus from 1995 through today, the entire program is being run and overseen by the same group of individuals and corporations. They have become the foxes guarding the hen-house. Through these manipulations more and more corporations have been attracted to the use of prisoners as their "labor pool".

Private prison operators such as Corrections Corporation of America (CCA) and Geo Group - yes, the same ones involved in the SB 1070 corruption fiasco in Arizona - own and operate dozens of prisons across the U.S. Many of those facilities have complete manufacturing facilities attached and are operated as prison industries. CCA had a contract through 2003 with U.S. Technologies, Inc. that allowed UST to operate any prison industry under CCA's control at privately run prisons. (UST's stock was delisted by the SEC and they quietly ceased to operate after the CEO of UST was charged with corruption and bilking investors out of $13 million in 2004). Prior to their closure, UST was actively involved in attempting to corner the prison labor market. They intended to use inmate labor in every manner imaginable for profit.

Efforts to involve Union officials, management and labor leaders in rectifying this issue have been unsuccessful for some reason. Politicians and Union leaders are too busy arguing about outsourcing of our jobs overseas and seem to not have any interest in eliminating or addressing insourcing. The next time you or your neighbor loses your/their job; before looking toward China or India to see if you can see your job making it's way there, look the other way and see if perhaps some criminal that stole your car has just as easily stolen your job and income as well.

Through "Insourcing" of your jobs to inmates, those jobs have been lost permanently. Sadly, the reason for PIECP in the first place - inmate training - has been replaced with corporate profits as the goal. Lifers are being used nationwide in PIECP - men and women who will never be able to use their learned skills in the free markets. In addition the jobs and skills being taught to prisoners today no longer exist in the free markets...they've already been insourced to prison. To land such a job, the released prisoner has to return to his old cell, bunk and assigned prison industry job, exactly as planned and anticipated by prison industries and their corporate partners who are the only "winners" in this scheme.

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