Since the early 1980s, there has been a revival in the private use of inmate labor with the passage of the 1979 Prison Industry Enhancement Certification Program. This has over the time presented great business opportunities for various industries. Incarceration has become big business in todays economy, and inmate labor is a significant aspect of this business, which has come to be known as the prison industrial complex (Chambliss, 2011).
Presently, the research has shown that 80% of federal and state prisoners work during their time in prison, within two general categories of work, which include nonindustrial and industrial fields (Chambliss, 2011). In nonindustrial work prisoners are involved in the maintenance of institutions and agricultural activities. In industrial work prisoners are directly involved in profitable production. This brings about the business aspects associated with the United States prison system. Most of the federal, state, and local inmates work to maintain the operations of their institutions. Chambliss (2011) asserted that very few inmates work in prison farms, but those, who do, perform such tasks as gardening, farming, forestry, ranching, and other agricultural activities. Federal and state inmates work on average six hours per day and receive $1.03 to $4.38 per day for their industrial work.
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The prison owns and operates the business that employs, supervises, and trains inmates. The manpower model is similar to the temporary labor agencies, where companies lease rather than employ prison workers. Chambliss (2011) noted that Prison Industry Enhancement Certification Program partnerships require participating businesses to pay workers the prevailing wage, provide benefits similar to government employees, meet the national Environmental Protection Act requirements, consult with local; organized labor and businesses, and not replace free workers (p. 196). Work participation is voluntary, and inmate workers must contribute 5% to 20% of their gross wages towards victim restitution programs.
The Prison Industry Enhancement Certification Programs boundaries are not applied to the service jobs and private correctional amenities. In 2010, it was noted that eighty percent of the Prison Industry Enhancement Certification Program prison industry workers manufactured apparel, metal, electronic equipment, furniture, and wood products. Ten percent were employed to provide business and automobile services, and very few worked in agriculture and construction. Private prisons use the majority of their inmates labor for institutional maintenance. It was noted that 6% of the people is a used for prison farm work (Chambliss, 2011). Inmates in the private prisons work longer hours and receive lower wages as compared to the inmates in the public prison industry.
According to Siegel (2010), the federal government helped to put private industry into prisons when it proved the Free Venture Program in 1976. Seven states including Connecticut, South Carolina, and Minnesota, were given grants to implement private industries inside prison walls. Today, private prison industries have used a number of models. One approach, the state-use model, makes the correctional system a supplier of goods and services that serves to run other institutions. Siegel (2010) noted that the California Prison Industry Authority (PIA) is an inmate work program that provides work assignments for approximately 7,000 inmates and operates 70 services, manufacturing, and agricultural industries in 23 prisons. These industries produce a variety of goods and services including flags, printing services, signs, binders, eyewear, gloves, office furniture, clothing, and cell equipment (Siegel, 2010).
In another approach, the free enterprise model, private companies set up manufacturing units on prison grounds or purchase goods made by inmates in shops owned and operated by the corrections departments. In the corporate model, a semi independent business is created on prison grounds, and its profits go to the state government and inmate laborers. Despite widespread publicity, the partnership between private enterprise and the prison community has been limited to a few experimental programs. The practice of using prisoners to provide services and make products that are sold for profit is called prison industry. Over time, this practice has evolved into a sophisticated industrial system, which is characterized as an alliance of government and business groups that comprehend incarceration as a profit opportunity.
The prison system in the United States, as in all industrialized nations, amounts to big business. The expansion of the prison business system is marked by increasing incarceration rates and subsequently exorbitant amounts of money that contribute to the maintenance of the prison system. The corporatization of prisons and the clandestine profit-motivated agendas behind prison expansion form a growing area of critical interrogation; however, it is noteworthy that in classifying the prison industrial complex the subsidiary business of localized corrections has overshadowed, profit-making from the penal enterprise is an ongoing corporate windfall outside the prison.
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The factors that gave rise to prison privatization are still present and continue to drive the growth of what is now a multi-billion-dollar, multinational incarceration business (Selman & Leighton, 2012). The dynamics that created private prisons, an increasing prison population, and government outsourcing, not only continue shaping it today, but also provide insights into future directions and problems. Selman & Leighton (2012) noted that historical problems associated with efforts to private or introduce profit motives into state-sanctioned punishment; yet private prison companies gained a foothold during the 1980s (p.17). They generated venture capital from the backers of Kentucky Fried Chicken, and a number of private prison companies later raised money through initial public offerings (IPOs) to become public companies traded on the stock exchange. While this phenomenon generated resistance along the way, the Wall Street analysts labeled private prisons as hot stock picks in the 1990s, and the degree of comfort with the idea of prisons having publicly traded stocks was so high that one prison had a sign out front advertising the closing stock price of its parent company (Selman & Leighton, 2012).
Governments and business tend to be conservative and incremental. Price & Morriss (2012) noted that the employment and investment opportunities associated with prisons have been especially attractive to the rural communities. Many poor rural communities now view the prison industry as an opportunity for economic advancement. For these towns, the prison business has several benefits: it brings significant outside investment, it is recession proof, it is non-polluting, and it provides promising employment opportunities that do not require a college education. The prison systems are so attractive to the rural communities that many of these regions will bid for the state investments in new jails and prisons.
Today, prisoners work for such corporations as TWA, Dell, Starbucks, Microsoft, and Eddie Bauer, making a large variety of products. Pay scales range from about 20 cents to $1.50 an hour. These wages are at or below the contemporary wages in the nations within the developing world. In addition, the states such as Alabama and Arizona have also reinstated chain gangs. Prisoners are ideal workers for corporations, because employers do not have to pay health benefits or unemployment insurance, vacation time, sick leave, or overtime. Companies can hire, fire, and reassign prisoners as they desire, and be exempt from the state-mandated safety standards (Rodriguez, 2011). Profits are moving toward $10 billion nationwide. Prisoners, in turn, cannot respond with strikes or grievance filing. Prisoners that have organized riots for just conditions have been punished by prison staff, which rescinds what little privileges they have. Rodriguez (2011) says that although prisoners can refuse to work, those, who do so, are labeled as uncooperative and risk losing such privileges as library access and recreation.
Profit is the primary motivation behind the ten-fold increase in the prison population that has occurred in the last twenty nine years (Dyer, 2000). It then stands to reason that the potential for making money from this business of justice must be quite substantial. The business of turning crime and prisoners into profit has become one of the fastest growing industries in the nation, an industry with hundreds of billions of dollars up for grabs each year. Dyer (2000) noted that corrections is now the fastest growing category in most state budgets and each year, more of this taxpayer money is finding its way into the bank accounts of companies in the private sector (p. 11).
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In the 1990s, the variety of corporations making money from prisons was truly dizzying, ranging from Dial Soap to Famous Amos cookies, from AT&T to healthcare provider and to the companies that manufacture everything from prefab cells, leather restraints, cooking utensils, food to laundry detergent (Dyer, 2000). The profits are really enormous. Dyer (2000) notes that the prisons often choose the company willing to give the prison administration the largest share of the profits, and quite often the company promising to kick back the most money to the prisons management is the corporation charging the most to the prisoners families. When it comes to the prison population, an assortment of strange new industries has been born from the trade in prisoners quite literally, the trade in prisoners. The second largest private-prison company is Wackenhut, a corporation that also specializes in private security. Wackenhut has annual revenues of over $ 1 billion derived from its prison and security ventures. They now control 16.4 % of the global private prison market. Market analysts believe that the revenues derived from private incarceration will surpass $5 billion within a decade or may do so even sooner, if corporation is allowed to purchase entire state prison system at a time (Dyer, 2000).
In conclusion, corporations are not the only ones benefiting from the war on crime from the business front. Public sector employees in law enforcement and corrections agencies have also seen their stock rising as a direct result of the war on crime in the form of increased salaries, growing numbers, and new equipment and facilities. Prison labor is another area, where both the public and private sectors are cashing in on Americas 2 million prisoners. While being touted as a way to save money on prisons, this market intervention into the justice system has given rise to a myriad of conflicting interests that are actually feeding the current expansion and its corresponding expense.