Prison labor responsible for rise in unemployment

Critics say job lines are getting longer thanks to Federal Prison Industries, a federal company that uses prison labor to produce goods like furniture and uniforms for the government (Photo: Lucas Jackson).
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Brooks Hays

Several American companies that make uniforms for the U.S. military are cutting hundreds of jobs after losing contracts to Federal Prison Industries, Inc. (commonly referred to by its trade name, UNICOR), a government-owned corporation that produces goods and services using labor provided by the Federal Bureau of Prisons.

As Fox News and ABC News report, American Power Source of Fayette, Ala. and American Apparel of Selma, Ala. could not compete with UNICOR and its labor force of convicts. Neither could another military clothing manufacturer, Tennessee-based Tennier Industries, reports the New York Times.

The irony is, UNICOR's winning bid will end up costing the government more. Even with minimal overhead costs and prison wages running from a measly 23 cents to $1.15 an hour, its price for a uniform is $34.18, while American Apparel charges $29.44 — 15% less — reports Digital Journal.

The irony is less amusing if you're one of the 100 former Tennier Industries workers who are now without a job.

UNICOR can win contracts with less-than-competitive bids thanks to its enabling legislation, passed by Congress in 1932, and the Federal Acquisition Regulation, which gives the company first right of refusal on government contracts.

And even though the company's profits have been shrinking in recent years, and its factories have been shutting down, its scope has been expanding. Company spokesperson Julie Rozier recently told ABC that UNICOR's operational strictures had been loosened: "In December, we obtained new authorities." The company can now compete with private producers to sell items that would otherwise be made overseas.

Earlier this year, a bipartisan group of lawmaker began crafting H.R. 3634 to overhaul the way UNICOR does business, proposing to limit its markets and eliminate its preferential status.

"The issue at hand is not the prisoners working or prison labor. The problem is Unicor's business practices and how the current system shuts out the private sector," Congressman Bill Huizenga of Michigan, one of the bill's chief authors, wrote on his website.

None of UNICOR's profits "goes towards the actual cost of incarcerating inmates,” according a 2007 Congressional report. The company argues it lowers the crime rate, however, by helping prisoners acquire marketable skills. It says its inmates are “24 percent less likely to recidivate than non-program participants and 14 percent more likely to be gainfully employed” after release.

The company's operations include clothing and textiles, electronics, office furniture, recycling activities, data entry and more. UNICOR is even beginning to dabble in solar panel production. But as the national unemployment rate remains high, and the company continues to draw the ire of politicians, that list may soon shrink.