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US: Out-Celling the Competition

by Dan PensNorth Coast Xpress
May 1st, 1996

Was your Microsoft Windows 95 packed and shrink-wrapped by a Washington State prisoner? According to one prisoner who works for Exmark, a company specializing in product packaging, approximately 90 prisoners at the Twin Rivers Correctional Center (TRCC) in Monroe shrink-wrapped 50,000 units of Windows 95.

"Those were good times for us," he recalls fondly. "Everybody had plenty of work then." That same worker says he was laid off after the Microsoft contract, and hasn't worked since. Each day, he says, he checks the bulletin board: Exmark posts a "call-out" list with the names of those workers fortunate enough to have a job the following day. He explains that those prisoners with the least seniority or who have fallen into disfavor for anything from back talking to poor work habits will appear on the call-out list only for the largest contracts.

Exmark is a subsidiary of Pac Services, a Redmond packaging company which also employs non-prisoner, or "free-world," workers. Steve Curly, an Exmark employee, denied the company had packed any Windows 95. But he said that Exmark's TRCC operation had packed tens of thousands of units of Microsoft Office, and had wrapped and shipped as many as 40,000 Microsoft mice in one week.

Exmark utilizes prison labor mainly, as one prisoner puts it, "when they have a big contract and need some extra workers." When work is plentiful, Exmark's prisoner workers shift into high gear. At other times they remain idle in their cells.

Prisoners say Microsoft is not the only beneficiary of Exmark's "flexible" labor force; they also claim to have regularly packaged goods for Costco, Starbucks, and JanSport. Exmark's prisoner workers also talk about stuffing envelopes for mass mailings, something they claim to have often done for telecommunications giant US WEST. Most people are surprised to learn that private corporations use prison labor. After the initial shock, however, many think it's a terrific new idea. But the concept is anything but new.

Beginning in 1817 with New York's Auburn prison, the predominant U.S. corrections model was based on a scheme referred to as "lease prisons." Sometimes private business entities contracted with states to operate their entire prison system; other times the state would operate the prisons and "lease" the prisoner labor to the businesses.

Nineteenth-century prisons were basically forced labor camps. Prisoners were made to produce a wide array of goods including shoes, furniture, wagons, and stoves. For the sake of profit they were often housed in squalid conditions, fed rancid meat and wormy flour. Whippings were commonplace. Dr. Lewis Wynne, executive director of the Florida Historical Society, says that since states rarely checked, operators of lease prisons often worked prisoners to death. Mortality rates, Dr. Wynne said, ran as high as 40 percent.

From almost the very start there were scattered protests about prison labor from manufacturers' associations and organized labor. The states were addicted to the cost savings, however, and they refused to dismantle the lease system. Events in Tennessee provide an illustrative example. In the 1870s, competitors of the Tennessee Coal, Iron and Railroad Company charged that convict labor gave that company an unfair competitive advantage. Their protests fell on the deaf ears of state lawmakers. Then, in 1891, the company locked out all of its union workers and replaced them entirely with lease convicts. In what was dubbed "The Coal Creek Rebellion," angry union miners stormed Tennessee's lease prisons, released over 400 prisoners, and loaded them on trains headed for the state capital! The next year Tennessee dismantled its lease system. By the early part of this century most states had followed suit, and the first wave of private prison profiteering was slowly drawing to a close.

The death knell of private exploitation of prisoner labor was finally sounded in the New Deal era. In 1935 two federal laws, the Hawes-Cooper Act and the Ashurst-Sumner Act, were passed which virtually outlawed prison labor. The Ashurst-Sumner Act made it a felony to move prison-made goods across state boundaries, irrespective of individual state laws.

This lasted until the 1970s, when Chief Justice Warren Burger began proselytizing for conversion of U.S. prisons into "factories with fences." Congress was willing to listen. As part of the Justice System Improvement Act of 1979, Congress passed an amendment which established seven Prison Industry Enhancement (PIE) pilot projects, and the definition of "project" was changed to encompass not just a single business, but all businesses set up in prisons by either a country or a state. The law was again amended in 1990 to allow up to 50 pilot "projects" (e.g., states) to participate.

Today all of the prison products from as many as 50 states or counties may legally enter the stream of interstate commerce. And so we begin round two of the prison labor profiteering racket, with a PIE big enough that any business in any state can grab a piece of the action.

For companies like Exmark, it's an attractive proposition. Prisoners say they receive the minimum wage ($4.90 an hour in Washington) from the corporation, but that figure is misleading. The Department of Corrections (DOC) deducts 20 percent of prisoners' wages to recover "cost of corrections." Another 10 percent is deducted and placed in a "mandatory savings account." Five percent is deducted for a "Victims' Compensation Fund" administered by the state. Federal Income Tax, Social Security tax, and Medicare tax are also withheld. The DOC can deduct an additional 20 percent to pay court-ordered restitution, court costs, and other debts. When all is said and done, prisoners can see a "spendable" wage of $1.80 to $2.80 per hour. Prison workers say that since they have no real living expenses, most of the money they earn in industry jobs can be sent home to help support their families. They take pride in the fact that they are able to provide for their families this way. Most of them, however, fail to appreciate the broader implications their jobs have on society as a whole.

Exmark and other private industries operating in Washington's prisons do not have to provide their prisoner workers with any benefits such as health insurance, workers' compensation, or retirement (although the state offers a comprehensive "Three Strikes" retirement plan!). These operations are further subsidized by the state in that they usually pay little or nothing for the factory, office, or warehouse space in the state's prisons. The DOC pays electricity, water, utilities, and other overhead costs that a private company would have to pay in a non-prison setting.

In addition to Exmark, there are a surprising number of other companies doing business using Washington's prisoners. Here is a partial list. All employment figures were current as of December 1995:

  • Nyman Marine-a subsidiary of Nyman Piledriving of Issaquah. The parent company builds docks. The prison subsidiary manufactures hydraulic boat lifts, sea-plane lifts, and jet-ski lifts. Prisoner workers: 6

  • Elliott Bay Metal Fabrication-Manufactures micro-brewery and commercial fishing equipment such as pans, conveyor belts, and storage tanks. As with most incarcerated employees, applicants must be skilled, in this case as welders and metal fabricators, before they are hired. The company is not in the business of giving job skills to prisoners; they operate in prisons solely to make a profit. Prisoner workers: 11

  • A & I Manufacturing-Fabricate window blinds, miniblinds, cell shades (blinds made out of cloth), and wire shelving, and are expanding into other window coverings, such as curtains. Prisoner workers: 11

  • Redwood Outdoors, Inc.-A garment manufacturer which prisoner workers say produces clothing for Eddie Bauer, Helly-Hanson, and Brooks, among others. Most Redwood workers are reluctant to talk about their jobs, especially about whose labels they sew into the garments they make. "Eddie Bauer doesn't want anyone to know they use prisoners," one said in a hushed tone. Prisoner workers: 20

  • Washington Marketing Group (WMG)-A telephone soliciting operation. Prisoner workers say WMG has peddled everything from Journal American newspaper subscriptions and Prudential health insurance to United Van Lines moving and storage, and solicits charitable donations for the likes of the Red Cross, the American Cancer Society, and the Leukemia Society. WMG shut down its operation for several weeks last spring after The Stranger broke a story about prisoners being used to hustle votes for Washington Congressman Jack Metcalf's campaign.

In its 1993 session, the state legislature passed a new law which mandates that the Washington Department of Corrections increase the number of prisoners employed in correctional industries by 300 jobs a year. The goal is a net increase of 1,500 new prison industry jobs by the year 2000. There is language in the law which vaguely protects Washington's "free world" work force: "The customer model industries in this class shall... provide Washington state manufacturers or businesses with products or services currently produced by out-of-state or foreign suppliers." And the DOC is supposed to conduct "an analysis of the potential impact of the proposed products or services on the Washington state business community and labor market."

One could argue that some prison-made goods, like the garments sewn for Redwood Outdoors, would indeed fall into a category of goods "currently produced [by] foreign suppliers" such as the infamous maquiladora sweatshops in Mexico and Central America. But what about the microbrewery and fishing equipment fabricated by Elliott Bay? Are there no Washington state metal fabricators who might produce these goods? And every time WMG bids for a telephone sales account, they bid against Washington firms that employ free workers. Nyman Marine's prison operation also arguably takes jobs away from Washington workers.

In 1994, the DOC constructed a 56,000 square foot "industries building" adjacent to the Monroe Reformatory. They are trying to attract more businesses to fill the vacant floor space. Several square feet of that floor space recently disappeared, however, when prisoners chipped through the four-foot-thick concrete floor to build an escape tunnel-using readily available power tools. How did they get their hands on power tools? They work in the industries building!

A lot of people, both inside and outside of prison, believe "correctional industries" jobs are a boon to prisoners. "Elliott Bay is the best program in this joint," claims one prisoner. He points out how working there allows him to hone his welding skills and prepare for a job on the outside. When it is pointed out to him that Elliott Bay probably takes jobs away from society, he replies, "Fuck society! Society locked me up."

But which segment of society is truly being shafted by prison industries jobs? Those who own stock in companies like Microsoft, US WEST, Costco, and United Van Lines are probably satisfied with the arrangement. But unemployed welders, telemarketers, and metal fabricators might see it differently when they realize that the only way to get a job might be to go to prison.

Imprisonment is-and always has been-a form of "social control." By deciding which behaviors shall result in imprisonment, those in power are able to shape society to fit their social ideals. But imprisonment is expensive; therefore it has often been used sparingly. By promoting "Free Venture" private industries in prisons, states are entering a new era of "lease prisons." The income the state gains by skimming the workers' wages allows imprisonment to be ever more affordable. It's a troubling trend, and one that isn't without irony. The wages of "free world" workers are undercut; they lose their jobs, turn to crime, and end up in prisons built from the revenues from imprisoned workers who are performing jobs which used to be available on the outside.