We’ve all heard about how companies are using overseas workers to reduce labor costs, but the real cost savings for some jobs may lie with prison workers. Federal Prison Industries (FPI, also called UNICOR) is a company owned by the government that employs prison inmates. Like some overseas sweatshop workers, prisoners are paid exceptionally low rates of 23 cents to $1.15 an hour, receive no benefits for their work, and do not work in a participative management environment. The motivation for them to work hard is instead completely intrinsic: to learn trade skills and the value of work while they are incarcerated, in hopes that they will be more employable upon their release. Although the organization is unable to supply workers to the private sector, federal agencies are required to purchase goods produced by its workers whenever FPI’s bids are competitive. Steven Eisen, CFO of Tennier Industries, came face-to-face with FPI when his company lost a $45 million contract to manufacture clothing for the U.S. Defense Department. One hundred of Tennier’s workers were laid
off as a result. He argues it is wrong to give jobs to prison inmates at the expense of law-abiding citizens who may be struggling to find employment. “Our government screams, howls, and yells how the rest of the world is using prisoners or slave labor to manufacture items, and here we take the items
right out of the mouths of people who need it,” says Eisen. Proponents of the program say it is beneficial to inmates, pointing to data from the Bureau of Prisons showing that inmates who work for FPI are 24 percent less likely to be incarcerated again and 14 percent more likely to be employed when released. Traci Billingsley, speaking for the Bureau of Prisons, states, “FPI supplies only a small fraction of the government’s goods and services. FPI also helps support American jobs as it often
partners with private American companies as a supplier.”
8-11. Do you think it is fair for companies to have to compete against prison inmates for government
work? Why or why not?
8-12. Michigan representative Bill Huizenga said, “If China did this—having their prisoners work at
subpar wages in prisons—we would be screaming bloody murder.” Do you agree or disagree with his
8-13. Do you think prisoner employees should have any benefits other workers have? Why or
Sources: Based on D. Cardwell, “Competing with Prison Labor,” The New York Times, March 15,
2012, 1, 4.