The populist slogan “Buy American” increasingly means buying goods produced by America’s thriving prison-based industries, says a new paper.

“The public sentiment against outsourcing has…offered prison labor programs unique opportunities for expansion under the rubric of providing a competitive alternative to low-cost foreign workers,” writes Lan Cao, a professor of international economic law at the Dale E. Fowler School of Law at Chapman University.

Cao argues that the increasing use of low-wage or free prison labor by companies seeking to manufacture in the US also calls for a re-examination of claims that such labor is rehabilitative for inmates on the grounds that it provides “moral, psychological, and economic benefits to prisoners and communities.”

Instead, the economics of prison labor programs, which are strongly focused on productivity and cost reductions, suggest that rehabilitation is at best a secondary goal to generating profit, writes Cao.

The government’s use of inmates as a revenue-generating workforce should actually be reframed in a context that connects it to its real purpose “as reflected in facts on the ground – market, profit and employment.”

The Federal Prison Industries website claims that prison jobs make inmates 24 percent less likely to recidivate, and 14 percent more likely to find employment after release. But these claims have not been verified by long-term studies, according to Cao.

Furthermore, as more private-sector industries rely on prison labor to stay competitive–or even to stay alive–there is little evidence to show that many of the jobs inmates perform still exist on the free market, he adds.

In addition to the narrative of rehabilitation, over the past decade, state and national prison industries have exploited populist “Buy American” sentiment and grassroots hostility to international trade agreements to make inmate labor appear patriotic.

Prison “insourcing” is even cheaper than outsourcing labor to low-cost countries like India and the Phillipines, writes Cao.

“Using prisoners as their workforce, companies can keep production costs low, access a range of tax benefits, and promote their products as “Made in the USA.”

Factories with Fences: UNICOR’s Repatriation Campaign

In 2009, the Federal Prison Industries–a US government-owned enterprise created in 1934 under the trading name UNICOR–announced its objective to repatriate jobs that had been outsourced from the United States, and bring them home.

According to Cao, UNICOR “boasts that its production facilities and inmate workers should be lauded precisely because of three factors: “U.S. Locations; U.S. Labor Force; U.S. Manufacturing.”

It also promotes its “flexible labor force to help meet companies’ surge production needs,” as well as its warehouses, facilities, and (now) over 70 factory locations to companies that are lacking in resources.

The U.S. International Trade Administration encourages companies interested in repatriating labor to partner with UNICOR, saying it “exemplifies the business principle of doing well by doing good.”

But for those who remember boycotting multinationals in the 1990s in protest of their overseas sweatshops, it is interesting to note that present-day “debates on trade and labor rights rarely, if ever, allude to the use by private companies of prisoners for production in the United States,” Cao writes.

In one of several comparisons to Chinese labor conditions, Cao recalls how US prisoners who worked in electronics recycling suffered from similar health issues as the rural Chinese workers who did the same job before it was “repatriated.”

The Consolidated and Further Continuing Appropriations Act of 2012 allows UNICOR to partner with private industry to manufacture and sell goods on the commercial market, but businesses have been lobbying to relax regulations on the use of prison labor for private industry since the 1970s– just as the US prison population soared. The move to use prison labor for the private sector has been pushed by groups such as the American Legislative Exchange Council (ALEC), its Prison Industries Act [of 2013], and the Prison Industries Enhancement Certification Program (PIE).

The PIE campaign now boasts 37 state and four county-based certified correctional industry programs with management authority over at least 175 business alliances with the private sector, according to Cao.

Statutory safeguards meant to protect both local industries from unfair competition—and prisoners from unfettered exploitation—are in reality “often relaxed and not complied with,” writes Cao, and often defeated by third-party companies.

Oversight “was effectively transferred from the Department of Justice to the National Correctional Industries Association (NCIA), which is a private trade group.”

A particular offender is Florida’s PRIDE Enterprises, which according to Cao applies various dodges to get around paying “prevailing wages”– such as requiring two-month “training programs” before a prisoner receives level 1 work status; incremental pay increase only begins at level 3. “It takes about two years for a prisoner to become eligible to be paid the “prevailing wage.”

Often, they never get to that point before they are moved to a different position, starting again at the training stage.

Cao argues that the non-market designation of prison labor cannot be supported by the usual justifications– rehabilitation and punishment– and that it has created an uncounted “shadow workforce” affecting protections for all free US workers.

“Prisoners work in the blurred boundaries between non-market work done for rehabilitation and economic activity indistinguishable from the experience of free workers in similar jobs,” Cao writes.

“The overlap of a non-market relationship with a market relationship should not be allowed to negate the latter,” Cao concludes, adding that “the market component is significant enough to justify a requirement that prisoners be paid the minimum wage.”

The full report can be downloaded here.

Victoria Mckenzie is Deputy Editor (Content) of The Crime Report. She welcomes readers’ comments.