Out of Control Policy Blog

Are Prisons Competing With Private Businesses?

A recent FoxNews.com piece discusses Maryland's new law reqiring flags purchased by state agencies to be made in the U.S. The legislation essentially codifies existing practices, as the vast majority of current state-owned flags were purchased from the Maryland Correctional Enterprises, an independent arm of the state Division of Correction that trains and employs inmates to produce furniture, license plates, food products, and flags, among other products. What struck me in the piece was this:

In order to avoid competing with private businesses, Maryland Correctional Enterprises only sells to state and local government agencies and nonprofits. In fiscal year 2008, Maryland Correctional Enterprises recorded sales of approximately $51.5 million.

This is faulty logic. If MCE did not exist as a state-sponsored enterprise, then that $51.5 million in sales last year would have likely gone to private sector businesses to provide those same goods, generating tax revenue and additional spending in the economy. A dollar spent on a prison-made flag is a dollar not spent in the private sector on flags. Of course MCE is in the business of competiting with private sector business.

In a related example, an electronics recycling coalition is clearly seeing a threat from prison business enterprises:

Some federal prison inmates spend their days tearing apart cellular phones and dismantling computers recycled in Arkansas. The prisoners, working as part of the Federal Prison Industries, salvage copper and other materials later sold to metal dealers. Last year alone, the prison industry had $10.5 million in net sales.

Unicor, a part of the Federal Prison Industries, uses 876 inmates in seven federal prisons to do the electronic recycling work, according to a company financial statement. Most of northwest Arkansas' recycled electronics go to the federal prison in Texarkana, Texas. [...]

However, using prison labor has drawn the ire of private companies in the recycling business. Barbara Kyle of Electronics TakeBack Coalition in San Francisco said the practice undercuts companies that are more environmentally responsible. Within the last two years, states such as Illinois, Michigan, Minnesota, New Jersey, Rhode Island and Washington have banned the practice of using prisoner labor to recycle in most cases, she said.

Policymakers in states operating corrections-led business enterprises have clearly made a policy trade-off, opting to promote such policies with the intention of targeting recitivism by providing skills and jobs training. But let's be clear that this is indeed a trade-off, and the cost of such policies is government competition with private sector businesses, taking away opportunities to provide private-sector jobs and shift some spending back to the taxable sector.

Leonard Gilroy is Director of Government Reform

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Comments to "Are Prisons Competing With Private Businesses?":

John Thacker | April 28, 2009, 12:12am | #

Surely this scenario is familiar to anyone who turned the channel to TNT during a certain few years in the 90s, and thus saw The Shawshank Redemption.

William | April 28, 2009, 11:38am | #

A “SINGLE VOICE PROJECT” is the official name of the petition sponsored by: The National Public Service Council To Abolish Private Prisons (NPSCTAPP)

The National Public Service Council To Abolish Private Prisons (NPSCTAPP) is a grass roots organization driven by a single objective. We want the United States government to reclaim sole authority for state and federal prisons on US soil.

We want the United States Congress to immediately rescind all state and federal contracts that permit private prisons “for profit” to exist in the United States, or any place subject to its jurisdiction. We understand that the problems that currently plague our government, its criminal justice system and in particular, the state & federal bureau of prisons (and most correctional and rehabilitation facilities) are massive. However, it is our solemn belief that the solutions for prison reform will remain unattainable and virtually impossible as long as private prisons for profit are permitted to operate in America.

Prior to the past month, and the fiasco of Fannie Mae, Freddie Mac, AIG, Lehman Brothers, and now the “Big Three” American Automobile manufacturers, the NPSCTAPP has always felt compelled to highlight the “moral Bottom line” when it comes to corrections and privatization. Although, we remain confounded by the reality that our government has allowed our justice system to be operated by private interests. The NPSCTAPP philosophy has always been “justice” should not be for sale at any price. It is our belief that the inherent and most fundamental responsibility of the criminal justice system should not be shirked, or “jobbed-out.” This is not the same as privatizing the post office or some trash pick up service in the community. There has to be a loss of meaning and purpose when an inmate looks at a guard’s uniform and instead of seeing an emblem that reads State Department of Corrections or Federal Bureau of Prisons, he sees one that says: “Atlas Prison Corporation.”

Let’s assume that the real danger of privatization is not some innate inhumanity on the part of its practitioners but rather the added financial incentives that reward inhumanity. The same logic that motivates companies to operate prisons more efficiently also encourages them to cut corners at the expense of workers, prisoners and the public. Every penny they do not spend on food, medical care or training for guards is a dime they can pocket. What happens when the pennies pocketed are not enough for the shareholders? Who will bailout the private prison industry when they hold the government and the American people hostage with the threat of financial failure…“bankruptcy?” What was unimaginable a month ago merits serious consideration today. State and Federal prison programs originate from government design, and therefore, need to be maintained by the government. It’s time to restore the principles and the vacated promise of our judicial system.

John F. Kennedy said, “The time to repair the roof is while the sun is shinning”. Well the sun may not be shinning but, it’s not a bad time to begin repair on a dangerous roof that is certain to fall…. because, “Incarcerating people for profit is, in a word WRONG”

There is an urgent need for the good people of this country to emerge from the shadows of cynicism, indifference, apathy and those other dark places that we migrate to when we are overwhelmed by frustration and the loss of hope.

It is our hope that you will support the NPSCTAPP with a show of solidarity by signing our petition. We intend to assemble a collection of one million signatures, which will subsequently be attached to a proposition for consideration. This proposition will be presented to both, the Speaker Of The House Of Representatives (Nancy Pelosi) and the United States Congress.

Please Help Us. We Need Your Support. Help Us Spread The Word About This Monumental And Courageous Challenge To Create Positive Change. Place The Link To The Petition On Your Website! Pass It On!

The SINGLE VOICE PETITION and the effort to abolish private “for profit” prisons is the sole intent of NPSCTAPP. Our project does not contain any additional agendas. We have no solutions or suggestions regarding prison reform. However, we are unyielding in our belief that the answers to the many problems which currently plague this nation’s criminal justice system and its penal system in particular, cannot and will not be found within or assisted by the private “for profit” prison business. The private “for profit” prison business has a stranglehold on our criminal justice system. Its vice-like grip continues to choke the possibility of justice, fairness, and responsibility from both state and federal systems.

These new slave plantations are not the answer!

For more information please visit: http://www.npsctapp.blogsppot.com/ or email: williamthomas@exconciliation.com

To sign the petition please visit: http://www.petitiononline.com/gufree2/petition.html

National Community Outreach Facilitator
The National Public Service Council To Abolish Private Prisons
P.O. Box 156423
San Francisco, California 94115

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