Thursday, December 06, 2012

Unfree Competition

One thing you can say about capitalism: at every link in the chains, someone is being exploited. Small businesses are struggling to stay afloat because they have to compete with super cheap prison labor. The modern chain-gang.

There are several ways to look at prison labor. We can view it the way guards and wardens do, as having a salutary effect on inmates who would otherwise be doing nothing or, worse, getting into mischief; we can view it the way sociologists do, as providing inmates with marketable skills; we can view it the way taxpayers do, as a way for these useless reprobates to earn their keep instead of bleeding us dry; or we can view it the way working people do, as a genuine threat to their jobs. Rarely can you find workers so pliable, easy to control, stripped of political rights, and subject to martial discipline at the first sign of recalcitrance.

Because the U.S. leads the world in the number of people living behind bars (there were more than 2,266,000 adults in U.S. federal and state prisons and county jails at the year-end, 2010) and because businesses already realize that plentiful, dirt-cheap prison labor could be a panacea, prison labor is likely to expand.

The trade name for Federal Prison Industries (FPI) is UNICOR. There are about 218,000 inmates in U.S. federal prisons, and about 13,000 of them work for UNICOR, whose revenue in 2011 was estimated at $900 million. UNICOR  makes the uniforms for the US military and they do it for about one-tenth the wages that private textile workers would earn. But this barely scratches the surface.This only speaks to the federal prison system.

In March Tennier Industries, which also makes military clothing, fired more than 100 employees after losing out to FPI on a new $45 million contract from the Defense Department.
In May American Apparel put 175 people out of work when closed an Alabama plant for the same reason. Owner Kurt Wilson expressed his frustration that he pays workers $9 an hour with full benefits and yet "we're competing against a federal program that doesn't pay any of that," according to CNN. Kurt Courtney, director of government relations at the American Apparel and Footwear Association, told CNN. "The only way for workers to get jobs back is to go to prison."
Power Source will shed about 260 jobs when they close plants in Alabama and Mississippi  because of competition from FPI, http://www.businessinsider.com/corporate-prison-labor-is-forcing-small-businesses-to-close-factories-2012-9

Prison labor has its roots in slavery. After the 1861-1865 Civil War, a system of “hiring out prisoners” was introduced in order to continue the slavery tradition. Freed slaves were charged with not carrying out their share-cropping commitments (cultivating someone else’s land in exchange for part of the harvest) or petty thievery – which were almost never proven – and were then “hired out” for cotton picking, working in mines and building railroads.

At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies contains the cream of U.S. corporate society: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more. All of these businesses are excited about the economic boom generation by prison labor. Just between 1980 and 1994, profits went up from $392 million to $1.31 billion.

 The Corrections Corporation of America and G4S , two prison privatizers, sell inmate labor at subminimum wages. These companies can, in most states, lease factories in prisons or prisoners to work on the outside.  All told, nearly a million prisoners are now making office furniture, working in call centers, fabricating body armor, taking hotel reservations, working in slaughterhouses, or manufacturing textiles, shoes, and clothing, while getting paid somewhere between 93 cents and $4.73 per day.

Walmart was criticized last year for making use of inmate labor through contracting with at least one vendor, Martori Farms, which pays women inmates $2 an hour. At Martori Farms one of the women prisoners supplied to Martori by the Arizona Department of Corrections told Truth-Out,We work eight hours regardless of conditions…We work in the fields hoeing weeds and thinning plants…Currently we are forced to work in the blazing sun for eight hours. We run out of water several times a day. We ran out of sunscreen several times a week. They don’t check medical backgrounds or ages before they pull women for these jobs.” Writing for PolicyMic, Bob Sloan points out, “…Wal-Mart helped write the laws allowing this kind of exploitation…They helped ALEC pass legislation now being used in states that are turning to prisoners to solve labor shortages stemming from the Right to Work and immigration laws.”

Every year, Wal-Mart has to dispose of millions of dollars worth of customer returns, buy-backs, over-stocks, shelf-pulls, scratch-and-dent, and excess inventories. The giant retailer sells this merchandise to liquidators, who scrub the products of any Wal-Mart serial numbers, UPC bar codes -- and then resell them to after-market retailers, who re-sell them to the public. Jacob's Trading Company (JTC)  is the prime liquidator for Wal-Mart. They use inmates of  Oklahoma Department of Corrections,  Southern Nevada Women's Correctional Facility. In 2000, a female prison laborer working 40 hours a week kept just over half of what she earns. After several deductions mandated by the state prison department, she took in about $460 per month. That's net pay of $2.67 an hour. Even updated to today's wages, this pay is not comparable to private sector wage levels.



In its Standards for Suppliers Walmart states "Forced or prison labor will not be tolerated by Wal-Mart." !!

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