Money behind bars – prisons and profiteering

Go to jail – and work. Who benefits from rehabilitating prison labour? Picture: Ken Teegardin, Flickr

Debates about the prison system usually revolve around its cost and occasionally, due to the likes of “Orange is the New Black or The Shawshank Redemption”, about inmates’ conditions. The result is a mix between limited media coverage and what Hollywood wants to show. But perhaps there are other aspects that we should not ignore – one connection rarely raised is that between prisons and economic profit. Who really benefits from prison labour?

Are prisons systems designed to rehabilitate the inmates, or to punish them? There is a large variety of perceptions on that regard around the world. Organisations such the United Nations High Commissioner for Human Rights (UNHCR) emphasise the role of prisons as promoters of rehabilitation. Depending on your outlook, prison labour can be seen as either rehabilitation or punishment. But no matter your standpoint, it is worth pointing out how inmates’ labour is used to improve both national and corporate finances as well as employment statistics.

There is a great variety of responses to the incarceration phenomenon around the world, of which little is widely known. China’s great economic story of success is tinted by the Laogai system in which political prisoners and other dissidents are detained without any judicial procedure and forced into slave-like conditions. The Laogai system is a network of more than a 1,000 slave labour prisons in which millions of products, requiring intensive manual labour, are being produced and then exported to the rest of the world. China has turned their vast prison system into a prolific business that relies on virtually free forced labour, thus providing a significant competitive advantage vis-à-vis their competitors. The Laogai relies on the exploitation of millions of men and women in what has been labelled as ‘state sponsored slavery’ and a clear violation of human rights Conventions.

Forced labour is the reality many inmates face when ending up in prison. Picture: Luca Rossato, Flickr

Each Laogai prison factory operates with a double identity in order to circumvent China’s export ban on prison-made goods. Moreover, despite federal legislation that bans the import of prison-made products into the US, an Al Jazeera investigation argues that this law is rarely enforced. The alleged US customs permissiveness is most likely due to the potential political implications with one of their major trade partners. The lack of enforcement on both sides spurs a multimillion industry in which millions of forcibly produced goods flood international markets every year. However, it is important to highlight that this is not the first time that such behaviour have taken place in our modern economy, for instance IKEA has publicly apologised for the use of East German political dissidents’ forced labour in their supply chain in the 1970’s and 1980’s.

The Laogai system might have certain special features but its essence is not unique, as it is guided by the underlying belief that employment is a fundamental part of the inmate’s rehabilitation. Based on the same underlying assumption, other countries like US and Britain have turned their penitentiary system into a part of their labour market. But instead of reducing the burden for taxpayers and benefiting the re-integration of inmates into mainstream society, what has emerged is a complex playing field for corporate economic gain. In the US, with the enactment of the Prison Industry Enhancement Certification Program (PIE) in 1979, private corporations, thanks to a mix of governmental subsidies and the non-application of regular employment laws, are reaping mayor benefits. Even though prison made products are not allowed to be sold to the general population, they are allowed to compete in public bidding for governmental agencies. As inmates receive salaries around $23 cents to 1,25$ an hour, many companies find it hard to compete with state produced goods.

Item manufactured by Federal Prison Industries (UNICOR) that use penal labor to produce goods in USA. Picture: Daniel Lobo, Flickr

Just as in USA, British inmates are also being employed at significantly lower wages than in the regular labour market. But unlike in the US, there is a closer connection between markets and the prison system in Britain meaning many regular corporations are currently using such arrangements as strategies to reduce costs. In both cases inmates have reportedly little or no substantial gain in terms of skills or future employability from their work in prison. There are of course many other countries that also use prison labour. In a recent development, Thailand for instance has announced the use of inmates labour in their prawn fishing industry. It was just last year that a Guardian special report uncovered the widespread use of slave labour in this same industry.

Another less explored link between the prison system and the labour market is its impact on official unemployment policies. Part of the European Union and USA debate around employment creation and unemployment numbers is concerned with the US decision not to take into account the inmate population within the unemployed numbers. Something the EU feels distorts the statistics.

Evidence suggests that behind a well intended theoretical principle of work rehabilitation there is wide range of interpretation in its implementation that at times has been exploited for private gain at the expense of both inmates and taxpayers.

Camilo Tellez


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