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ALEC Exposed – Prison Labor

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Earlier this year, the Center for Media and Democracy released documents detailing some 800 model legislations crafted by the American Legislative Exchange Council (ALEC). Included in those documents was the Prison Industries Act, legislation that had already been established in dozens of states across the country.

Like much of the model legislation created by ALEC, this bill is designed to help private corporations increase profits. In this case, those profits come from the use of prison labor. As Mike Elk and Bob Sloan wrote in The Nation, “prison labor for the private sector was legally barred for years, to avoid unfair competition with private companies.”

In addition to this legislation, ALEC crafted numerous pieces of legislation that resulted in harsher sentencing in the courts, meaning more prisoners and longer sentences. That, in turn, means more laborers off which to profit.

90 Second Summaries: Season 2, Episode 21

Spotlight on the States: The Prison Industries Act


ALEC model legislation – introduced nationally in 1995; updated in 2004

Click here to download this summary (pdf)

Status: According to the Bureau of Justice Assistance, 37 states and four other jurisdictions have certified PIE programs in place. As of 6/30/2010, 30 of those programs were active.

Purpose: Congress created the Prison Industry Enhancement Certification Program (PIECP) with the Justice System Improvement Act of 1979. This program was designed to “establish employment opportunities for inmates that approximate private sector work opportunities”, thereby helping them gain skills to find work upon release. PIE provided both a cheap source of labor to participating private companies and an effective way for prison administrators to keep inmates busy while helping defray their cost to the state, but was scantily used by the states until the advent of the Prison Industries Act. For years, the use of prison labor by private companies had been legally barred to prevent unfair competition.

Summary: Originally crafted in 1993 by Texas State Rep. Ray Allen, the Prison Industries Act is designed to better incentivize use of prison labor by private companies and more effectively enrich these companies. The PIE program stipulates that inmates must be paid a prevailing market wage, although up to 80 percent of that wage (after taxes) can be diverted to the state to offset the cost of incarceration and for other purposes. It furthermore sets conditions that restrict the use of inmate employees to undercut market competition. This legislation leverages loopholes in both of those restrictions to the benefit of the participating corporations in the following ways:

• Diverts a portion of the money deducted from inmate pay to “private sector prison industries expansion accounts” that can be used to construct work facilities, recruit corporations to participate as private sector industries programs, and pay program management, implementation and oversight costs. As laid out in the 2004 version, this special fund receives the first $2 million of state deductions from inmate pay and half of any further amount.

• Creates a “Private Sector Prison Industries Oversight Authority” that oversees approval and operation of PIE programs. This body is composed of various stakeholders appointed by the governor, with key elected officials as ex-oficio members.

• Exploits a loophole in PIECP to drastically expand the cases in which prison labor can be used.

• The original legislation specified distribution of the inmate’s gross wages:

• 10% going to the inmate for use while incarcerated;

• 20% to pay restitution to the victims of his or her crime if under a court order to do so;

• 20% to the inmate’s spouse and children (if they exist); unless they are on welfare, in which case this portion is paid to the state to offset the cost of their benefits;

• 10% to an escrow account for the inmate’s personal use upon release from prison (20% if no restitution is ordered)

• The remainder (40-70%) is received by the state as partial reimbursement for the inmate’s imprisonment cost.

Note: the 2004 legislation now being advanced did not include such guidelines.

Supporters: American Legislative Exchange Council, Corrections Corporation of America, etc.

• Supporters see this act as a way to fulfill the original purpose of the PIE program, preparing prisoners for increased future job prospects, helping offset the cost of their imprisonment, and providing an affordable source of labor to participating companies.

Opponents: Labor and allied groups, most Democrats, etc.

• Opponents generally view this legislation as a way to establish backdoor slave labor in the United States, as inmate employees often receive under a dollar per hour in direct compensation.

Further links

Full model legislative text (2004 version): http://alecexposed.org/w/images/4/4d/7N4-Prison_Industries_Act_Exposed.pdf

Full model legislative text (1995 version): http://www.scribd.com/doc/59334595/ALEC-Prison-Industries-Act

The Nation article about the bill: http://www.thenation.com/article/162478/hidden-history-alec-and-prison-labor

National Correctional Industries Association 2010 report on the state of the PIE program: http://bit.ly/mPnfwe

Official Justice Department PIECP page: http://www.ojp.usdoj.gov/BJA/grant/piecp.html

PRIDE Enterprises explanation of the PIE program: http://www.pride-enterprises.org/about/mission/pie.html

Unicor Federal Prison Industries Inc. Factory Locations: http://www.unicor.gov/information/publications/pdfs/corporate/CATMC3811_C.pdf

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  • glennbear

    During my working career I was employed by a state corrections department in the northeast. For many years that system had a prison industry which produced goods such as clothing, furniture, foodstuffs, etc. This industry was run by state employees without private industry involvement and the goods produced were sold to other state and local government entities. Some of these industries have since shut down because of pressure by private vendors. Why should the state of VA buy office furniture, mattresses, etc. from a private company at a premium price to further corporate profits at taxpayer expense when they can be produced “in-house” using inmate labor while teaching them job skills and banking inmate pay for their eventual release.

     To give an example of program success the state I worked for started an optical lab to teach inmates how to become optical technicians. Once the program was rolling inmates gained skills they could use post release and the state saved substantial money on eyeglasses for inmates and residents at state institutions.

      To use inmate labor to produce goods for corporate profit is both ethically and morally wrong and as the article points out opens the door for a multitude of misdeeds in order to keep corporate profits flowing.

  • totallynext

    That stipulates they can not get mandatory contracts ( yes federal law gives first preference to prisoners) based on market share in anyone Industry category.   I believe it is 5%,  this type of cap should be sought out in state legislatures.  

    That before and during any contract that a market share cap must be maintained in the industries that these programs are competiting in.  

    As an example, many prison programs do textile cut and sew operations.  They would not be allowed to produce or contract for more than 5% market share against commercial firms.   In fact this should go further, whereas private firms that use prison labor to get federal or public funds must have a minimum hiring placement of released inmate that worked in the programs.

    On the federal side whole industries have been decimated because of the unfair contract preferences.  Kinda a moot point to train inmates with “skills” if there is no viable private industries operting for them to gain employment when they are released.