The Economics of Everyday Things - 70. Prison Labor

Episode Date: November 11, 2024

Incarcerated people grow crops, fight wildfires, and manufacture everything from motor oil to prescription glasses — often for pennies per hour. Zachary Crockett reports from North Carolina.SOURCES:Laura Appleman, professor of law at Willamette University.Christopher Barnes, inmate at the Franklin Correctional Center.Lee Blackman, general manager at Correction Enterprises.Brian Scott, ex-inmate, former worker at the Correction Enterprises printing plant.Louis Southall, warden of Franklin Correctional Center.RESOURCES:"Prisoners in the U.S. Are Part of a Hidden Workforce Linked to Hundreds of Popular Food Brands," by Robin McDowell and Margie Mason (AP News, 2024)."Ex-Prisoners Face Headwinds as Job Seekers, Even as Openings Abound," by Talmon Joseph Smith (The New York Times, 2023)."Captive Labor: Exploitation of Incarcerated Workers," by the American Civil Liberties Union and the University of Chicago Law School Global Human Rights Clinic (2022)."Bloody Lucre: Carceral Labor and Prison Profit," by Laura Appleman (Wisconsin Law Review, 2022)."Prison Labor Is on the Frontlines of the COVID-19 Pandemic," by Eliyahu Kamisher (The Appeal, 2020).Correction Enterprises.EXTRAS:"Can Data Keep People Out of Prison?" by People I (Mostly) Admire (2023).

Like most working people, Christopher Barnes has a daily routine. I get my thoughts together, get down and then get my hygiene together. He brushes his teeth, washes his face, and at around 7 in the morning, he makes the short commute to his workplace. I work in EG Sheeting. I sheet the metal and trim it and get it ready for screening. I've been in that department the whole time I've been down here. Barnes and his colleagues make highway signs, those really big green ones that tell you

which exits are coming up. My family, they'd be like, what you doing the sign plant? And I'd tell them, I make the signs in the streets. It's like, wow, I thought somebody else did that. I mean, it's amazing that we do all these signs, you know? It's amazing in part because Barnes isn't an ordinary employee. Technically, he's not an employee at all. He's serving a life sentence for first degree murder. And the

sign plant where he works is located inside Franklin Correctional Center, a medium security prison in Bunn, North Carolina. Barnes is one of around 800,000 incarcerated people with jobs in America's prison system. They grow crops, repair roads, fight wildfires, and manufacture a surprising number of the products we encounter in daily life, from office furniture to reading glasses. It's estimated that more than $11 billion worth of goods and services every year can be traced back to workers who are mostly paid pennies per hour for their labor, or even nothing at all.

As a whole in society, we are not incredibly sympathetic towards prisoners having to do work. I think if you asked the average American, they would be like, good. But if you explained exactly how it worked, they would be a little more unsettled. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, prison labor. Last week, we looked into the economics of highway signs

and learned that many of them are made by incarcerated people, like Christopher Barnes. We wanted to learn more about how prison labor became a central part of the economy. And we found out that the story goes back to the founding of our country. In America, work has long been used as a form of punishment. Back when we were still a colony, Britain shipped over criminals and sold them to farms in Virginia and Maryland. They worked in the fields alongside enslaved people, and together their labor sustained

our early agrarian economy. As America's justice system evolved, we began to send convicts to prisons. You don't really see the first prison labor until the beginning of the 19th century. Laura Appelman is a professor of law at Willamette University in Oregon. She's researched the history and economics of prison labor. What quickly became common is something called the industrial prison. Prisoners were essentially rented out to for-profit companies for labor. They were putting together furniture. They were making clothes, making wagons, whatever was local.

Originally, it was to recoup the expense of prisons, but then they realized, hey, we can make some money here. When the 13th Amendment was passed after the Civil War, banning slavery and other forms of unpaid labor, a notable exception was carved out. So the 13th Amendment outlaws slavery except when you have been convicted of a crime. Across the South, thousands of emancipated slaves were locked up for petty offenses. They were forced to grow crops on penal farms. Later, they were shackled together in chain gangs that built roads for government contractors. These practices persisted for many decades, and eventually they morphed into a larger

and more institutional system. Things didn't really start going into the big time until the 80s, 90s, when mass incarceration really started booming. Costs skyrocketed, and prison labor is the way that government is trying to pay for it. Today, more than a million people are incarcerated in federal and state prisons across the country. Housing and feeding them is very expensive. The median cost per person is around $64,000 a year. That cost falls on the state and ultimately taxpayers.

The government offsets these costs by putting prisoners to work as much as possible. At the majority of prisons, you'll find them doing a lot of the internal labor. They cook meals in the cafeteria, do laundry, clean the buildings, and maintain the grounds. But they also work in government-run prison factories where they produce billions of dollars worth of goods that are sold to public institutions and private industry. Earlier this year we visited one of these factories, a highway sign plant at Franklin Correctional Center in Bunn, North Carolina. It was off a country road behind a guard tower and a fortress of barbed wire fences.

You would never think that you would have something like this in a small community, in a small town in North Carolina. That's Lewis Southall, the prison's warden. He oversees the 300 incarcerated men who live there. We've had offenders here from DUIs all the way up to incarcerated for taking someone's life. Almost all of those men have a job, whether it's sweeping floors or mowing the lawns. But according to Southall, only the best workers get to work in the sign plant.

This is a million dollar corporation, and you don't want to have somebody down here that may have anger issues or have destructive issues. You can have one offender destroy a whole sign and it may cost tens of thousands of dollars. While the sign plant is on prison grounds, it's actually run by a separate entity operated by a company called Correction Enterprises. And when we stepped inside the factory floor, we met the guy running the show. Every sign is pre-assembled here at this sign plant.

So when it gets to the road, we know absolutely it's going to fit and it's going to work. Every piece goes together like a puzzle. That's Lee Blackman. He's a general manager at Correction Enterprises. It's a part of the North Carolina Department of Adult Correction. The company has 27 production facilities across the state, all almost entirely staffed by prisoners.

A signed manufacturing plant, this is just one of the many plants that we have. All these plants are different industries. The other ones that I have a hand in are the metal plant down in Anson County, woodworking and upholstery up at Alexander. Optical plant we have over in Nash. The other general managers have a wide variety of plants that they look after, whether it be janitorial, whether it be laundries, whether it be sewing. laundries, whether it be sewing. Correction Enterprises uses prison labor to make dozens of products. Employed prisoners sew the linens used in prison beds.

They process canned peas and beef patties for prison cafeterias. They manufacture air fresheners, hand soap, motor oil, prescription glasses, picnic tables and license plates. Last year, Correction Enterprises sold $121 million worth of goods. Almost all of those sales were to government agencies in the state of North Carolina, many of which are required to shop through the company. The sign plant, for instance, primarily sells to the state's Department of Transportation. The OT is by far our largest customer. We also do a lot of work for any tax-supported entity

within the state of North Carolina. We can do business with nonprofits. State employees can order signs from us or any products from correction enterprises. By using prison labor to produce all of these signs, Correction Enterprises is able to offer the government prices that are well below market rate. At a typical business, labor accounts for around 25 to 35 percent of the cost to produce goods.

At Correction Enterprises, it's only around 2.5%. That's less than $3 million in labor costs on $121 million in sales. Blackman says the benefits of those savings trickle down. If you pay taxes, and I'm a taxpayer in the state of North Carolina, I want everybody to be as frugal with my tax dollars as they can be. But that frugality is only possible because prisoners aren't protected by most employment laws. Prison labor is classified as quote non-market work so you don't have to pay them anything near the minimum wage. For incarcerated workers, pay depends on the type of job they have and where they work.

Most jobs pay somewhere between 13 cents and 52 cents an hour. In some states like Kansas, prisoners are paid around 5 cents an hour. And in others, like Alabama and Mississippi, prison jobs don't pay at all. All states are in on this. It's a great source of very low-cost labor. Almost every state in America has its own version of correction enterprises. And prisoners often do much riskier work than building furniture and spacing out letters on highway signs.

Some prison jobs are part of work release programs that send incarcerated men and women to the outside world. At the height of the pandemic, prisoners transported dead bodies to morgues and disinfected medical supplies. After a hurricane or an oil spill, they're dispatched to clean up the mess. And when wildfires break out, they're airlifted into the heart of the forest. Federal prisons have their own system for taking advantage of cheap labor. The government-owned Federal Prison Industries, or FPI, has more than 60 work facilities across the country. It manufactures around 300 products, boots, jumpsuits, tools, medical supplies, body armor,

and even electronic components for guided missiles, which it sells to the Department of Defense. But prisoners don't just do work for the government. Sometimes the state leases out their labor to companies in the private sector. The companies really want to keep it quiet, but I think they're thrilled because it's so much cheaper. And the state government is thrilled

because they make some money. Prisoners have sewed underwear for Victoria's Secret, worked in call centers for cell phone companies, and made cheese that was sold in Whole Foods. Forty-six states run agricultural programs within their prison systems. They raise a lot of food, and some of it's used for the prison itself, and some of it is sold on the open market. An investigation by the Associated Press found that food produced on penal farms ends up in popular products like frosted flakes cereal, gold metal flour, and ballpark hot dogs. Companies don't just save money on labor costs. They often earn tax credits for hiring work release prisoners.

All of this makes prison labor a great deal for taxpayers, governments, and private businesses. But there's another side to the story. And to understand it, you have to talk to people who actually do the work. That's coming up. Brian Scott served 20 years in prison before being released in 2021. For most of that time, he was at the Nash Correctional Institution in North Carolina,

and he was working at a printing facility run by Correction Enterprises. We did everything from what they call inmate stationary, which is the paper that they gave us to write on, to we did a brochure that detailed all of the wineries across the entire state. It was always something different. I read on the site that they even did report cards there for high schools and colleges. Yes, and the temporary tags that you get when you purchase a new vehicle. The printing facility was staffed by around 130 prisoners. And the day-to-day work was similar to what employees at any

other printing facility would do. Except in exchange for his labor, Scott was only paid 26 cents an hour. It actually started at 13 cents. And then there was a raise that you got pretty soon to 20 cents. And then, you know, the 26 cents was when you were actually operating a machine or a computer. The crazy thing is, it was actually one of the higher paying jobs. There were many people working back in the dorms, pushing brooms or whatever, and they were making, you know, anywhere from 40 cents a day to maybe a dollar a day at the most.

Every Sunday, Scott's weekly earnings, around $14, were transferred into a trust fund controlled by the prison. And he says getting full pay wasn't guaranteed. There were some individuals who would have some of their pay taken out because they had received a lot of write-ups or they had some court-appointed fees that they had to pay. A write-up was $10. But when you're only making $15 and they take $10, it hurts. Most incarcerated people use their money to buy stuff at the commissary or canteen, a store inside the prison. Their wages don't go far.

Ramen noodle soup was maybe 25 cents. Coca-Cola was probably, I don't know, a dollar and a half. When you're considering that you're making $14 a week, you know, a dollar 50 to spend on a Coke is a lot of money. A lot of people couldn't afford that sort of thing. Scott says many people with prison jobs took on side hustles to supplement their income. I don't know how many green peppers I bought from guys who worked in the chow hall. That was the way that they tried to compensate for the pennies that they were being paid.

We had people who would draw a picture of your child or your spouse and you would pay them a fee for that. Scott had an operation making incense sticks in his cell. He'd sell them for one postage stamp, which was a form of currency behind bars. The process was you would get the stick off of a broom. You would take one little square of toilet paper, which the state provided, you would wrap it around the stick, you would get it damp, and then you would roll it in the sage. That had to come out of the chow hall. They would sell little bottles of oil in the canteen, and I would dab it on the whole stick,

let it dry, and there you go, you've got an instant stick. ["The Time Is Now"] Aside from the pay, Scott says his time at the printing plant was a tolerable experience. But toward the end of his sentence, he was transferred to another Correction Enterprises facility where he refurbished traffic signs.

And that was a different story. It really was a horrible place. Nobody liked being there. It was offsite. So you got bussed to this location, bussed back in. And every day when you came back, you had to go through a full strip search. Because the labor is so cheap, they would have more people than they actually needed. I can remember being just given some of the most tedious jobs just to keep me busy.

There was a building that we had to pressure wash during the winter. There were picnic tables outside that we had to chip all the paint off of. The people who run prison labor programs often say that working at their facilities is a choice and that if a prisoner doesn't like a certain job, they're free to find other work inside the prison. But this freedom often comes with a catch. The New York Times recently reported that prisoners in an Alabama facility who refuse to take on work release jobs often face disciplinary action. Again, here's law professor Laura Appelman. Technically, it's not forced labor, although it depends how you define forced. It's not the chain gang. It's not convict leasing, but the pressures are different. If you absolutely refuse to do anything, your privileges are going to be taken away. And of course, when

you're incarcerated, privileges sort going to be taken away. And of course, when you're incarcerated, privileges sort of make life bearable. Appleman also says that because prisoners aren't considered employees, they aren't covered by employment protections, things like workplace safety regulations and a workers' comp in case of injury. But some incarcerated workers believe that prison labor will pay off for them down the line. Work programs are often positioned as a solution to recidivism, the

tendency of convicted criminals to reoffend. The idea is that the skills you learn on the inside will help you land on your feet once you're out. Lee Blackman of Correction Enterprises made that point during a walkthrough of the sign plant in North Carolina. We can take these men and we teach them and once they start doing the job, they're figuring out, hey, I can do this. They start believing in themselves,

they got the confidence, they know they can do that job. And they can walk into a prospective employer and say, let me show you what I can do that job. And they can walk into a prospective employer and say, let me show you what I can do. The evidence that prison labor helps incarcerated people find jobs once they're back out in the real world is mixed. Many companies won't even consider hiring people with felony convictions. And more than 60% of people who are released from prison are unemployed a year later.

But it does work out for some people, including Brian Scott. After he was released in 2021, he quickly found a civilian job in the printing industry. Correction Enterprises connected me with a printing company in Burlington that had expressed an interest in hiring people with criminal records. I think my starting pay was $15 an hour. That first paycheck, it was more money than I would make in almost an entire year

working for Correction Enterprises. Christopher Barnes, the incarcerated worker at the sign plant in Bunn, North Carolina, will never see that kind of paycheck. He's in prison for life, with no possibility of parole. For him, the benefit of working a job in prison isn't the pay, the chance to learn new skills, or the promise of a brighter future. It's the brief moment of respite he gets from the cell block each morning, before the

machines fire up and the highway signs are cut to size. Quiet. Quietness goes a long way. For the economics of everyday things, I'm Zachary Krakat. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rabsy. I guarantee you there are stamps floating around the system that were purchased 20 and 25 years ago. The Freakonomics Radio Network, the hidden side of everything. Stitcher.