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Penal labor in the United States is a multi-billion-dollar industry.[1] Annually, incarcerated workers provide at least $9 billion in services to the prison system and produce more than $2 billion in goods.[2][3][4] The industry underwent many transitions throughout the late 19th and early and mid 20th centuries. Legislation such as the Hawes-Cooper Act of 1929 placed limitations on the trade of prison-made goods. Federal establishment of the Federal Prison Industries (FPI) in 1934 revitalized the prison labor system following the Great Depression.[5] Increases in prison labor participation began in 1979 with the formation of the Prison Industry Enhancement Certification Program (PIECP). The PIECP is a federal program first authorized under the Justice System Improvement Act of 1979.[6] Approved by Congress in 1990 for indefinite continuation, the program legalizes the transportation of prison-made goods across state lines and allows prison inmates to earn market wages in private sector jobs that can go towards tax deductions, victim compensation, family support, and room and board.[7][8]
Firms including those in the technology and food industries are often provided tax incentives to contract prison labor, commonly at below market rates.[10] The Work Opportunity Tax Credit (WOTC) serves as a federal tax credit that grants employers $2,400 for every work-release employed inmate.[11] "Prison in-sourcing" has grown in popularity as an alternative to outsourcing work to countries with lower labor costs. A wide variety of companies such as Whole Foods, McDonald's, Target, IBM, Texas Instruments, Boeing, Nordstrom, Intel, Wal-Mart, Victoria's Secret, Aramark, AT&T, BP, Starbucks, Microsoft, Nike, Honda, Macy's and Sprint and many more actively participated in prison in-sourcing throughout the 1990s and 2000s.[12] After the 2021 storming of the US Capitol, it was noted that FPI would receive priority when the federal government purchases products such as office furniture to replace what was damaged in the riots.[13]
Penal labor is allowed by the 13th Amendment of the U.S. Constitution, which outlaws slavery, "except as a punishment for crime whereof the party shall have been duly convicted."[14] Unconvicted detainees awaiting trial cannot be forced to participate in labor programs in prison as this would violate the Thirteenth Amendment. Critics of the prison labor system argue that the portrayal of prison expansion as a means of creating employment opportunity is a particularly harmful element of the prison–industrial complex in the United States. Some believe that reducing the economic drain of prisons at the expense of an incarcerated populace prioritizes personal financial gain over ensuring payment of societal debt or actual rehabilitation of criminals.[15] In 2021, inmates in federal prisons earned between $0.23 to $1.15 per hour,[16] far below minimum wage ($7.25 per hour).