Prison privatization and inmate labor in the global economy: reframing the debate over private prisons.

Author:Aman, Alfred C., Jr.
Position:II. Prison Privatization and Prison Labor through Conclusion, with footnotes, p. 385-409

The previous discussion argues for lengthening the chronology of prison privatization so as to include the privatization movement in history in an integral way. Doing so adds at least a decade to the story. It also broadens and enriches the context around prison privatization, to include more of the complex social, legal, and political tectonics of the period. Prisons were at the crux of the contradictory crosscurrents discussed above, as demand for stronger measures against offenders (and corresponding demand for new prisons) was at odds with the simultaneous demand for leaner government and brakes on public expenditure. Whatever the appeal of privatization as a structural compromise in theory, the substantive consequences were dramatic as a practical matter. Rates of imprisonment soared even as crime rates declined. (108) Concerned by the unprecedented levels of incarceration that heavily disfavored young black men, some socio-legal scholars saw the situation as a fundamental transformation of state and society-as prisons filled with young men who had been displaced from the labor force in a new climate in which economic risk was displaced onto workers, for whom persistent under- and unemployment became the norm. (109) However, crime policies turned away from rehabilitation, and increasingly toward confinement and punishment." (110) As David Garland observes, incarceration was no longer a matter of reforming individual offenders, but of newly normal selective effects that made prison "a shaping institution for whole sectors of the population." (111)

These were major changes; however, from the vantage points afforded by the longer timeframe we propose for prison privatization, the budget constraints and prison overcrowding subsequent to the late 1980's may be seen as relatively late developments. The prison crisis may account for the conditions that made prison privatization (like privatization more generally) politically saleable, but the context, the idea, its rationales and strategies for implementation, and even the firms themselves were already explicitly circulating by that time. In this Part, we look to that earlier period-to two earlier prison reform initiatives that are part of the longer history that made privatization integral to the globalization of capital. Both initiatives involve prison labor. Their similarities and differences are relevant to an analysis of privatization as entailing diverse means and ends, as well as diverse political locations within and beyond government.

These initiatives were Federal Prison Industries, now known as "UNICOR," and Prison Industry Enhancement, or PIE. UNICOR is a government owned corporation that manages inmate production of goods and services available for sale to the government and, under some circumstances, on the open market. (112) In its current incarnation, UNICOR is a form of outsourcing in the sense that it draws on labor segregated from the domestic labor force by a state border (i.e., prison walls) that demarcates a legal differential of wages and hours, among other things. (113) UNICOR is not a private enterprise, but it has been increasingly pressed to "act" like a private sector firm since its re-establishment by Congress as a self-supporting agency in 1988, and on-going pressures in the direction of increased competition and absorption of financial risk. (114)

By contrast, PIE brings private firms into prisons, giving private sector employers access to inmates as a work force. (115) UNICOR produces goods and services for an essentially governmentally-guaranteed market (as we shall see); PIE relies on the open market. (116) Together, consideration of these programs (discussed separately in the following sections) lends fresh prominence to the role of labor in relation to privatization in the prison context. Once the integral relation of prison labor and global capital is appreciated, prison privatization and the new pressures on labor to absorb the risk in economic fluctuations may be understood in turn as related developments. By attending to the government's diverse efforts to position prison labor in relation to privatization, the connections between globalization, privatization, and prisons are themselves clarified--in turn clarifying the context of prison reform as entailing issues beyond prisons, particularly in relation to the vulnerability of the labor force to fluctuating market conditions.

  1. Prison Industry Enhancement (PIE)

    PIE is a key development in prison privatization that dates from the 1970s, ultimately taking the form of the Prison Industry Enhancement Certification Program (PIECP) in 1979. PIECP is a federal program set up under the Justice System Improvement Act of 1979 (117)--legislation sponsored by Senator Edward Kennedy (D-MA), with co-sponsors from both sides of the aisle. (118) The Act set up the main federal agencies charged with research and evaluation of criminal justice programs, including corrections: the National Institute of Justice, the National Criminal Justice Research Center, the Law Enforcement Assistance Administration, and the Bureau of Justice Statistics. (119) The final section of the Act set up the PIECP, a program designed to give authorization, on a limited and prescribed basis, to state and local corrections agencies to contract with private sector firms for purposes of running those firms' operations within prisons. (120)

    Subsequently expanded to offer broader participation, eligibility for enhanced prison industry certification entails specific conditions. In particular, if prison-made goods are to be sold on the open market, wages must be on a par with other local producers, and there must be no displacement of local workers. (121) These restrictions have tended to reinforce niche production, i.e., in sectors where there is no local competition. Partners must further demonstrate that their venture will not impair existing contracts. (122) Labor unions must be informed and consulted. (123) Once certification is complete, the PIE model involves two main features. First, it brings a private sector enterprise fully within the prison walls, to be run on standard business principles, for profit. (124) Second, prisoners are employees of the company, earning wages that are subject to various forms of withholding (FICA, Medicaid, taxes, child support, and required personal savings for the inmate's use, post-release). (125) There are a variety of employment models; some inmates work directly for the company, while others are employed by prison management and assigned to the company. States write their own guidelines for enhanced prison industry programs. (126)

    Uptake of PIE has been selective--perhaps an indication of the particularity of the circumstances favoring such joint ventures. (127) The most successful PIEs in terms of private sector response and profitability of their enterprises are in South Carolina, Kansas, and Texas. (128) South Carolina's program has been the largest and most successful program from the outset in the vanguard of recruiting private sector ventures and developing successful partnerships with firms. (129) In South Carolina, the Division of Corrections Industries' private sector partners include Fortune 500 companies such as Escod Industries (a cable manufacturing firm whose clients include IBM), as well as commercial enterprises that include Third Generation (a luxury lingerie manufacturer for retailers such as Victoria's Secret and J.C. Penney) and Jostens, Inc. (the nation's largest manufacturer of graduation gowns). (130) Other states have successfully engaged other partners. California's enhanced prison industry ventures at one time included a Trans World Airlines reservations call center in a youth detention center. (131) Arizona's ventures included a Best Western reservation call center in a women's prison. (132) Connecticut's included the Chesapeake Cap Company (a manufacturer of baseball caps). (133) By 1993, thirty-two correctional agencies were participating in the private sector market through PIECP. (134) By the end of 2000, a total of some 3700 state inmates were participating in PIE; (135) by the end of 2005, 6555 inmates were in the program, bringing the total inmate participation to 70,000 since its inception. (136)

    In South Carolina and elsewhere, enhanced prison industries under PIECP are more profitable than the older Federal Prison Industries program (further discussion below), and both are more profitable than traditional prison work programs (license plates, road signs, etc.). (137) However, the private sector has not been responsive to enhanced prison industry initiatives in many states, and a study by Thomas Petersik et al., sponsored by the National Corrections Institute of America (NCIA) found that the benefits and beneficiaries of prison industry enhancement are neither well known nor understood. (138)

    The Petersik et al. study remains the principal source on the question of the benefits of the PIE program. The research team asked two questions: Who are the financial beneficiaries of PIE wages? And, what would be the effect of paying PIE employees on par with the civilian work force? The answer to the first question was very broad. Petersik et al. found that fifty-three to fifty-seven cents on every dollar of inmate wages goes to beneficiaries other than the inmate. (139) Non-inmate beneficiaries prominently include the corrections system, with approximately one third of inmate wages going to his or her room and board costs. (140) Other beneficiaries include the taxpayers who derive indirect benefit from reduced pressure on state budgets due to inmates' wage contributions. With regard to the effects of improving wages and expanding the program, Petersik's team found that PIE's profitability and benefits would likely increase under both conditions. (141)

    While PIE's advocates in corrections and...

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