Every Year Thousands of Private Sector Jobs Lost to Prison Industries -
Why and What You Can Do to Help
If you or a loved one, friend or family member have lost a job to prison labor or due to employer moving operation into a prison facility, we want to know. Even if you have suffered a reduction in pay due to prison labor contact us at www.piecp-violations.com and provide the information to us. We are in the process of compiling data on the number and kind of jobs that are being lost in the private sector to prison labor or prison industry programs, as well as the estimated loss of wages from the loss. Doesn't matter what state, union or non-union...let us know!
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On a daily basis we read articles describing the financial problems being experienced by cities, municipalities, counties and states. In the articles mention is made of how these government agencies or departments are now making use of inmate labor in place of private sector employees for such jobs as janitorial, landscaping and maintenance in an effort to reduce payroll to comply with mandated budget reductions.
No - or little - reference is made to the private sector workers who are being replaced with prisoners. For some reason readers find it difficult to realize that a neighbor, family member, friend, or simply another citizen from the community affected lost a job to each position being filled by prisoners. In a time of recovering from a serious recession, this lost employment is devastating to those affected. Mortgages, car, credit card and loan payments begin to fall far behind putting the unemployed worker and their families in a position of weighing food for the table, clothing and medication needs against paying bills, medical expenses and other financial requirements.
Those who do realize the impact of the transfer of jobs from private sector to prisoners and prison industry imagine this is some new phenomena that has arisen due to the economy, and will pass once the financial crunch resolves itself. This belief is incorrect, for this is anything but an anomaly. For more than 10 years now, prison industries nationwide have been involved and participating in the federal Prison Industries Enhancement Certification Program (PIECP or PIE as industries refer to it). Simply put this program allows prison industries to "partner" with private sector manufacturers or services and use inmate labor to make their products or provide services to private sector markets. Manufacturers in PIECP are allowed to make and distribute products across state lines and sell those products upon open markets, to John Q. Citizen. From 1999 on, this program has been responsible for the loss of thousands of good jobs for hard working Americans.
Terminated or laid off employees often times believe they have lost their jobs due to their being moved "offshore" by the Corporation or employer. Some corporations encourage or do little to discourage this belief because they try and keep their use of prisoner labor quiet. They have discovered that there is public distrust and dislike toward companies that utilize inmates to manufacture products sold and used by consumers.
PIECP has nine (9) "mandatory requirements" prison industries and their private sector partners must abide by if they wish to participate in the program and compete against private sector competitors on a "level playing field". These requirements are designed to keep competition between PIE participating industries and the private sector truly competitive, while allowing prison made goods to be dispersed via Interstate Commerce. One of the mandatory requirements is that inmates in the program are to be paid prevailing wages for their work. Another is a requirement that a private sector partner with an existing non-prison facility or business in operation must continue that operation without displacing employees, reducing benefits or lowering wages. A third requirement prior to start-up of prison operations is that the PIE Industry and/or the private sector partner must meet with or consult with manufacturers or service providers in the area who they will be competing with and must consult with local union and labor representatives and get these officials to agree to the operation and sign a form stating the jobs created within the prison industry will not conflict with the labor needs within the community, and that there is not a surplus of unemployed non-prison workers with the same job skills that would be adversely affected by the operation.
In most cases the foregoing mandatory requirements are ignored by PIE participating industries and their corporate partners. Instead of prevailing wages, inmates are paid the state or federal minimum wage scale for their work. Prison operators provide leases of facilities to their partners for as little as $1.00 per year. Instead of consulting with competitors or labor groups, the industry "notifies" them through ads placed in the classified sections of newspapers or in several instances, they inform the local Chamber of Commerce of their intentions. They fully realize that such a way of "consulting" with competitors and labor groups does not fulfill the requirements and also that this provides those who would be in opposition to the operations no dissenting voice. There is no discussion, there is only a brief notice of what is going to happen.
Large Corporations such as Microsoft, Dell Computers, Victoria's Secret, Starbucks, TWA, Chevron, IBM, Motorola, Compaq, Texas Instruments, Honeywell and many others are involved in the prison industry and use inmate labor to manufacture products sold to all of us, or provide services such as product packaging or call centers. As American corporations these companies operate on a profit basis - not on a basis of providing a necessary means of training incarcerated felons to make them better citizens upon release. If the latter were the case, these corporate prison industry partner corporations would quickly advertise their participation in such a deserving and necessary "program" to everyone who would listen. No, they do not advertise their use of prison industries or inmate labor and go out of their way to deny any connection between themselves and prison labor. They keep the connection quiet and rake in the huge profits.
These prison operations have been responsible for completely altering the face of US industry over the course of little more than a decade. Their impact upon private sector employment has been devastating, to say the least. In example of this statement, you need only look at this week's media attention to the recall of more than 44,000 helmets manufactured by prisoners in UNICOR's Texas prison industry facility. The helmets failed an impact or velocity test designed to test their safety for soldiers in combat. Senator Chris Carney, (D) authored an amendment to the Defense Authorization Act that would have forced Federal Prison Industries to competitive bidding, the subcontractor waived its preferential status that gave it right of first refusal on U.S. government contracts. The helmet contract is held by ArmorSource, Inc. from Hebron, Ohio. ArmorSource sub-contracted actual manufacture of the helmets to UNICOR. With the loss of inmate labor for manufacturing, two companies in Pennsylvania that anticipate hiring as many as 380 full time private sector workers to fulfill the contract for the 44,000 helmets plus another 200,000 that are on order and back logged. The loss of this single contract by UNICOR resulted in jobs for 380 unemployed workers in Pennsylvania. One can only presume how many other jobs can be restored by a reduction of the number of existing contracts that are now being manufactured by federal and state prison inmates.
In 2008 Lufkin Industries in Lufkin, Texas, closed their Trailer Division with the termination or transfer of over 150 employees due to competition from a PIE prison industry operating within a TDJC facility. Lufkin was never contacted or approached by this prison competitor before they began manufacturing the same trailers as Lufkin and selling them for as much as $2,000 less. Lufkin was unaware of the competition from Direct Trailer Sales, Inc. until it was too late to save their business and employees terminated.
Previously - also in Texas - Lockhart Technologies operated en industry in Austin, Texas. They employed upwards of 180 workers. Lockhart entered into an agreement with Wackenhut to move their entire operation to Wackenhut's Lockhart, Texas private prison where Wackenhut built an entire facility for the electronics and wiring manufacture Lockhart required. Once built they leased the facility to Lockhart Industries for $1.00 per year. The manufacturer closed their private sector operation, laid off or terminated all 180 employees and moved their equipment into the prison facility and resumed operations using inmate labor at a pay scale of less than half of what they had been paying in Austin.
In Florida the prison industry operator there, Prison Rehabilitative Industries and Diversified Industries (PRIDE) is a non-profit corporation operating with an IRS 501(C)(3) exemption and since 1999 they have held the PIECP certification issued by the Bureau of Justice Assistance for participation in the PIE program. In '99 they began partnering with private sector corporations to manufacture everything from fruit juices to processed food products and torque converters. These partnerships required the "partners" to move all of their equipment behind prison fences for use by the inmates assigned to the work. The shift of equipment meant the loss of jobs to those who had been doing the work on the outside. Once the operations were up and running, with the partner corporations instructing inmates on production procedures and teaching staff and inmates the proprietary processes for manufacture of the products, PRIDE simply booted these "partners" off prison property, kept their equipment, stock, finished and unfinished products and continued operations using the now ex-partner's distribution and customer lists to continue sales of the products and assumed their place within the open markets. In this case, not only were private sector jobs lost to the prison industry, the entire businesses were also lost, with corporate owners forced out of business and entangled in lengthy and complex lawsuits.
The use of prison labor has been "advertised" by prison operators and prison industries in various states. PIE partners are openly sought by the industries. They offer cheap wages, no benefits, no vacations, health insurance or sick days and virtually non-existent leases on facilities to potential partner corporations who find the seriously reduced overhead hard to resist. One company is now advertising that they are a PIECP "Certified" participant and as such are telling business owners and corporations that they can be partnered with a prison industry to manufacture their products or deliver their services by OnShore Resources, Inc. OnShore is located - where else? - Lockhart, Texas. OnShore follows in the footsteps of US Technologies, Inc., a Delaware corporation with headquarters in Lockhart. Back when all of this began in earnest...1999...US Technologies capitalized upon inmate labor and prison industries, partnering with prion industries in several states to manufacture an assortment of products to be sold nationwide. They used a wholly owned subsidiary, UST, Inc. to partner and openly advertised through SEC filings that the corporation was formed to use inmate labor under the PIE program to fulfill the labor requirements. UST's Board of Directors read like a who's who of former and current government lawmakers, the former FBI and CIA Director, and others with easily recognizable names. In 2006 UST was broken up by the SEC due to the criminal acts of the corporation CEO who bilked investors out of more than $13 million dollars. He was sent to prison and UST's stock frozen resulting in the corporation folding.
You may wonder how all of this could happen under the authority of a federal program such as PIECP? Is there no oversight? Is the government unaware of the dwindling job markets? Are they ignoring the unemployment statistics?
First they are fully aware of the use of inmate labor nationwide. UNICOR is reported to be using 26,000 inmates in their industrial operations making everything from furniture to body armor and other sensitive military materials including parts for missles. Military contractors have lost contract after contract to UNICOR that resulted in job losses that cannot now be counted with accuracy, there have been so many that have gone behind prison fences. Government administrators are not only aware of the increasing unemployment, they say they are working diligently to create jobs to put the unemployed back to work earning a decent wage. However, they have to do this without upsetting the applecart. Huge corporations operating under PIECP have lobbyists and special interest personnel who make campaign contributions to those lawmakers they can depend upon to keep the status quo in good health and the profits rolling in. There we're faced with the first obstacle to actually creating jobs - that is in direct conflict with those using cheap inmate labor with no desire to go back to paying benefits and proper wages to their employees.
That brings us to oversight and the real lack thereof. The Department of Justice, Office of Justice Programs has authority over PIECP. They utilize the Bureau of Justice Assistance (BJA) for actual oversight of PIECP, evaluation of new applications, annual reviews, investigations and policy decisions. In 1995 the BJA "outsourced" oversight of the entire program to a private, non-profit organization: the National Correctional Industries Association (NCIA). The NCIA is to determine eligibility of state prison applicants and compliance with the mandatory requirements prior to allowing a prison industry to begin operation. After the requirements are determined to have been met, certification is issued and operations begin. Once certified the PIE Guidelines requires each industry to be re-evaluated through an on site review every 12 months and the NCIA inspectors complete these reviews. Any complaints of violation or non-compliance by participating industries or their corporate partners addressed to the DOJ or BJA are re-directed to the NCIA for response. Sounds simple, huh?
"That's enough oversight", you may say. Not so. The NCIA is an Association made up of a myriad assortment of prison industry operators, CEO's, CFO's, COO's, Administrators and other prison industry staff. The entire NCIA Board is composed of prison industry administrators or personnel that represent the individual prison industries participating in the PIE program. The rest of the membership are personnel, administrators or employees of those vendors, suppliers and material handling companies that provide equipment, materials and supplies to the prison industries. I've heard time and again, "I can't believe that. You cannot be serious?" and in response I direct them to: http://www.nationalcia.org/?page_id=12 and tell them to simply scroll down and see for themselves the names of the Directors and their association with the various prison industries. Add to this the fact that private prison corporations such as Geo Group, CCA and Cornell Corrections all have prison industries located within their private facilities, and you begin to see the size of this mess and the number of participants with an interest in keeping the status quo up and running. Each prison industry is an "arm of the state" or quasi state -agency acting on behalf of the state government. UNICOR is a federal actor on behalf of the federal government through the Bureau Of Prisons (BOP). The large corporate partners in all of this, such as Microsoft and Boeing, swing a lot of weight and influence in both state and federal arena's. They have huge law and lobbyist firms on retainers and powerful friends in Congress to see to their interests. Through the present, governmental agencies and departments have been reluctant to open this can of worms.
The merger of prison industries, corporate partners, corporate suppliers and vendors and private prison operators, creates a nice, neat and deliberately government ignored monopoly. The BJA is unwilling or unable to force compliance with the PIE requirements by this huge group of corporations and individuals. Another "Too Big To Fail" situation.
The foregoing demonstrates why private sector jobs are being lost - and where they're re-appearing. The problem has been identified and now is in need of being rectified. The first step to accomplish this monumental task is to force the BJA and DOJ to bring the participants into full compliance with PIECP and 18 USC 1761(C) requirements. The reason for such huge profits is due to non-compliance with the current and controlling federal laws. Force compliance with prevailing wages and those profits drop like a rock in calm waters. Enforce consultation with labor unions and groups and less prison industry operations will begin or continue operating. Both of these issues will seriously reduce the dependence upon prisoner labor by the likes of Microsoft and Boeing and shift jobs back to the private sector. If corporations realize that there is no real "savings" by using inmate labor and they have to receive authorization from their competitors and labor leaders they will have second thoughts about the program and their participation. These lost advantages, coupled with the stigma associated with the use of prisoners in manufacturing products for private sector consumption, will drive many corporations from this labor market and cause them to return to the private sector for employees.
The way to force compliance is to pressure the BJA, DOJ and President Obama's Administration to take a long hard look at the program, participants and corporations involved. Secondly, the NCIA must be removed from oversight of themselves under a government grant - as is currently the case. There is no other situation known to this author where the government turns a federal program over to a private corporation that is formed to oversee themselves through a grant of taxpayer funds to pay for their services. Talk about the fox guarding the henhouse...and on our dime, to boot!
I ask readers to do as I have done...write letters, emails and make phone calls to your representatives and Senators about PIECP and how our jobs are being lost to this program through non-compliance. Google President Obama's email and follow the link to email the White House and President Obama. Urge him to review PIECP and enforce the law to reduce the loss of private sector jobs to prison labor. Request an investigation by the DOJ into the operation and accusations of non-compliance.
Only by exercising our rights to free speech can we demonstrate to the government that the problem exists, needs to be addressed and corrected so our jobs will be released from prison and return home.
Bob Sloan
Prison Industries Consultant
