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Modern Slavery In North Carolina: Another Peculiar Institution

by Michael Rigby

Jean Valjean went to prison for stealing a loaf of bread to feed his sister's seven hungry children. It was only the first of many injustices the protagonist in Victor Hugo's biting social commentary, Les Miserables, would endure. For the next 19 years he labored as a slave on a French chain gang. When he was released in 1815, Valjean had earned a grand total of 109 francs--then the equivalent of about 2 months' wages.

Two hundred years later, prisoners in North Carolina have it no better. Toiling in prison sewing plants, stamping out license plates, and assembling furniture, these modern slaves labor for a top pay of $3 a day.
Correction Enterprises (CE), the division of the North Carolina Department of Corrections (DOC) that operates prison factories, farms and other prisoner work programs, employs 2,300 prisoners and about 375 staff. In 2004 CE had $78.7 million in sales and reported $4.5 million in profit. That year, sales to prisons accounted for 46% of CE revenue while sales to other state agencies made up another 40%. In 2003 and 2004, $3 million of CE's net income went to the state's general fund and nearly $600,000 to a victim's compensation fund.

Politicians and prison officials are quick to extol the virtue of prison work programs--taxpayer savings, enhanced security, rehabilitation, real-world work skills. But these goals are only practical on the surface. Upon closer examination, it becomes clear that prison slavery is a taxpayer funded boondoggle that cannot survive the open market so extolled by politicians and capitalist ideologues.

Savings Nonexistent

One tired argument for the continuing use of prison slave labor is that it saves taxpayer dollars. Taken at face value this seems logical. So much so that CE echoes this sentiment in its mission statement, which promises to provide quality goods and services at a. savings to the taxpayer." In reality, however, this is rarely the case.

This fact became clear in October 2004 when CE's four garment factories could no longer keep up with the demand for certain prisoner T-shirts. Prison officials were forced to locate an outside vendor. The DOC got three bids. The lowest quote--$1.70 each for size XXXX shirts manufactured in Bangladesh sweatshops--was 40% less than the $2.76 CE spent on each prisoner-made shirt. Taxpayer savings on that order totaled $22,878.
The reason prison slave labor in the US cannot compete with sweatshop labor overseas is that while the American prisoners are paid pennies an hour for their labor, a bloated bureaucracy of supervisors, managers and paper shufflers being paid very well ensures any savings" are totally illusory. Another reason is sales volume where factories in foreign countries can, and do, operate continuously to fill large orders while prison industries typically have limited markets.

The discrepancy raised questions about why the DOC wasn't monitoring costs more closely. State law requires agencies, including the prison system, to buy at the lowest price for goods and services; there is no requirement to purchase American goods. The price difference also prompted CE to review its purchasing procedures. Officials concluded the garment factories could not competitively make some items, such as gym shorts, washcloths, t-shirts, and boxer shorts. On outside purchases of two other discontinued items, sheets and towels, prison officials were able to save about 33%. By May 2005, savings on those two items had already totaled nearly $100,000. The garment factories will continue to make most of the prisoner and guard uniforms, at a cost of about $8.5 million a year.

In March 2005, the Charlotte Observer concluded its own investigation of CE's prison garment factories. The probe revealed that CE routinely violated state purchasing guidelines by splitting large orders to avoid bidding. Under state rules, the DOC is not required to seek competitive bids on orders under $5,000. The Observer's investigation verified a pattern of multiple purchases for the same goods, many priced just below the $5,000 limit.

The Observer reviewed CE's fabric purchases of under $5,000 for 15 months ending March 31, 2005. Of the 167 small orders, which totaled $688,675, more than half were between $4,000 and $5,000. In some instances, multiple purchases were made weeks, or even days apart. On July 13, 23, and 27, 2004, for example, CE received shipments of the same black pocket lining material. All three orders were within $500 of the bidding cut off. In October, another four similarly valued shipments arrived.

All told, CE placed 15 small orders--valued at $71,000--for the lining fabric in 2004. The material, supplied by Chicago-based QST Industries which have a textile mill near Charlotte, is used in guard uniforms and prisoner jackets. QST salesman Martin Tilley said the company has foreign mills that produce goods typically cheaper than those made in the U.S., but CE doesn't want them. We do not sell them any foreign-made goods," said Tilley. They wanted to source as much domestically as they could.
Following the Observer's review, prison officials asked the state auditor to investigate. I have some concern about some noticeable trends," said DOC Secretary Theodis Beck in an April 1, 2005, letter. While Correction Enterprises has provided me what appears to be a reasonable business-related explanation for those trends, I want to ensure that the division's purchasing practices are without question in compliance with the operating rules and procedures established by the state.

The current audit is similar to one that led to the resignation of a DOC secretary in 1992. That audit concluded the DOC wasted $6.5 million, in part by improperly using no-bid contracts to purchase $15.1 million of clothing. It also accused DOC employees involved with the contracts of receiving money and other benefits. Prison officials assert there's no evidence of malfeasance in this case. We have no indication that anyone received any personal gain," Beck said.

Misuse of small, no-bid contracts is a common focus of investigations into state purchasing practices, said Dennis Patterson, a spokesman for the State Auditor's Office. They'll break the purchase up simply because you can do under-$5,000 purchases with essentially phone calls.
About 5% of CE's $38 million in annual materials spending is ordered using the no-bid exemption.

Jobs At Risk

Despite the DOC's supposed inclination toward buying domestic goods, prior to the Observer's inquiry the DOC was not even asking where the goods came from. It wasn't until we started looking at this data that we decided we better start asking for the origin," said DOC spokeswoman Pamela Walker.
What's more, buying foreign material presents its own problems, like putting tax dollars in the hands of overseas mill owners and putting domestic jobs at risk. During its review, the Observer examined recent textile and apparel orders worth $4.6 million. Fifteen large materials orders comprised three-fourths of the total. No less than 60% of those orders, worth $3.5 million, came from overseas plants, mostly in Asia. The balance of the textile and clothing purchases, worth $1.1 million, were divided among 200 small contracts handled mostly by the DOC, which buys for itself on orders up to $25,000.

With fabric from India, prisoners sew their own navy blankets and guards' blue pants. Prisoner jackets, a product of Mexico, are made with nylon from Taiwan. Prisoner caps are constructed in China, and their boxers in Bangladesh. Female prisoners have worn jeans made from denim produced in Pakistan and underwear from China.

The foreign orders mean a loss of revenue for Carolina mills, an irony in the heart of what used to be textile country. It seems ironic that the state of North Carolina would be helping Asian mills undermine U.S. textile companies and their workers," said Cass Johnson, president of the Council of Textile Organizations, an industry trade group. I would hope that the state legislature would see the folly in undermining both the North Carolina tax base and a major North Carolina manufacturing industry and change the rules.

Anxious to quell any potential voter backlash, North Carolina politicians hurriedly introduced a bill to address the issue. It was a red herring. The bill would require state agencies to ask where work is performed on goods produced when soliciting bids but does not require domestic buying. Sponsored by State Representative Rick Glazier (D-Fayetville), the bill passed in March 2005.

In 2003, one of the largest clothing fabric makers in the U.S., Galey & Lord, lost a bid to supply the DOC with light blue poplin--used to make guards' shirts and prisoner dresses--and the fabric used for prisoner boxer shorts. The material would have been spun in Gastonia, woven in Marion, then dyed and finished in Galey's big plant in Society Hill, South Carolina, said Ed Rumowicz, who is in charge of the company's prison sales.
Galey's bid of $1.74 per yard for the boxer short fabric was nearly triple the winning bid of 65 cents for Pakistani material. For the poplin, Galey's bid of $1.80 was 50 cents higher--or $50,000 for the total order--than that quoted by New York-based Raytex Fabrics. Raytex uses fabric made in Pakistan and finished in New Jersey. Jay Hellegers, vice president of sales and marketing for Raytex said he's fortunate to have the contract with at least some U.S. production. Hellegers noted that Raytex recently lost an order for another prison system to a vendor bringing in fully finished Pakistani fabric. That material is about $1.00 a yard cheaper. It's price, price, price," said Hellegers. It's harder and harder and harder to be competitive.

Benefits Superficial

Prison officials and politicians who support prison slavery contend money is not the only issue. Work programs, they argue, serve as a rehabilitative tool, teach real-world work skills that can be used upon release, and enhance security by keeping prisoners busy and well-behaved. While there is some truth to these arguments, the problems created by prison work programs far outweigh the benefits.

Some proponents argue that it doesn't even matter what job the prisoners perform. Because most have little or no prior work experience, they assert, the rehabilitative effects are inherent. State Senator Robert Pittenger (R-Mecklenburg), who has called for more auditors to review state purchasing contracts, holds this view. Part of what you're trying to accomplish inside the prison system is some sense of redeeming work ethic, something that develops their skills, their confidence," he said. Work is a wonderful thing.

Many experts argue, however, that prison work programs have an overall adverse effect on rehabilitation. If a profit is being made from prison slavery, says Ian Urbina ( PLN, January 2004, p. 1), what incentive is there for more costly but potentially more beneficial rehabilitation initiatives such as counseling, drug treatment, and literacy programs.
In California, for example, where prison for-profit work programs are increasingly popular," notes Urbina, prisoner educational and vocational programs have been cut statewide by almost 20 percent, with a loss of roughly $35 million for prison educational spending and 300 fewer prison teachers.

Other proponents of prison slavery contend the jobs replicate conditions on the outside to better prepare prisoners for release. But this too is a fallacy. In North Carolina, for instance, CE puts many prisoners to work sewing in the prison garment factories, but few sewing plants remain in the U.S., where about 95% of clothing is imported. One thing that is replicated is that prisoners are forbidden from unionizing or seeking collective wage or condition improvements. The proponents of prison slavery do not respond when asked if the goal is to instill pride is work, why prisoners are not paid, and allowed to keep, the prevailing market rate for their labor. The employers, supervisors, bureaucrats and guards supervising the prisoner workers are all paid market rates for their labor, but not the prisoners actually manufacturing the goods.
Moreover, prison work takes place in an authoritarian environment, where guards and prison officials maintain rigid control of the workers. Security comes first; production is secondary. Many prisoners accept the jobs only because they offer one of the few legal ways to make money in prison--not because they're trying to gain real-world work experience. If [prison officials] want to emulate conditions on the outside, observes PLN editor Paul Wright in an article by Zack Roth [PLN, March 2004, p. 18], can prisoners unionize to collectively bargain for their wages and work conditions? If not, then how voluntary is it?

Another selling point for prison work programs is that they purportedly create a safer environment within the prison. Not only do the jobs keep prisoners occupied, advocates argue, they also provide a disciplinary tool to keep them in line. North Carolina officials proudly note that when CE's Lincolnton garment factory reopened in the summer of 2004, disciplinary cases fell significantly. In the nine months before the plant began operating, guards wrote 310 disciplinary cases, says John Crow, superintendent of the 202-bed prison. In the next seven months the number of disciplinary cases reportedly dropped by more than 20%. They say idle hands are the devil's workshop," Crow gushes.

But profit-driven prison slavery programs can create their own security problems--often worse than those they ostensibly cure. In Idaho, for example, a 22-month investigation of the prison system's Correctional Industries (CI) program by the state's attorney general's office found flagrant abuses and security violations. The attorney general's report detailed an egregious lack of supervisory oversight and control over the activities of the prisoners assigned to CI," [PLN, March 2002, p. 1].
Prisoners on furniture delivery trips for CI were allowed to visit strip joints, have sex with wives and girlfriends, and drop off stolen furniture to family members. The prisoners also used the trips to buy drugs and tobacco for resale back at the prison. (Tobacco is banned in Idaho prisons.) What turned out to be the bigger scandal, however, is the degree to which prison officials turned a blind eye to the abuse for the sake of CI's profitability. For one thing, prisoners were not carefully searched upon their return from delivery trips. What's more, employees who reported safety concerns were fired, coerced into resigning, or subjected to potentially damaging interviews by investigators.

Prisoners employed by prison industries programs around the country have regularly escaped, or attempted to escape from industries areas and committed numerous murders and assaults with the tools inherent in a factory environment. Yet far from being a reason to eliminate prison industries, this is dutifully accepted as the cost of doing business." So much for the mantra of prison security" that is used to squelch rehabilitation programs, visiting and other practices that would enhance public safety.

Issues In Other States

Many other states have also battled problems stemming from their use of prison slave labor. In Oregon, where prisoners earn a top pay of $3 a day, there has been public outcry over concerns that the prison system is siphoning increasingly scarce jobs from the public (PLN, April 2003, p.6).
Most states and the federal government have laws designed to prevent prison industries, which pay significantly lower wages and are less regulated, from gaining an unfair advantage over the private sector. These prevailing wage" statutes generally require the work programs to pay a wage comparable to that for similar work performed in the community. These regulations are rarely followed.

In California it took legal action to force CMT Blues, a private clothing manufacturer, to pay the prevailing wage. The suit was filed by a citizen watchdog group contending that because 20% of prisoners' wages go toward the cost of incarceration, cheating them meant cheating the taxpayers [PLN, October 2003, p. 26].

Taxpayers in South Carolina have been similarly cheated--out of money and jobs. In October 2003, the Legislative Audit Council released a blistering report of the state's Prison Industries Program (PIP). The audit found, among other things, that PIP was improperly managed, probably displaced workers in the surrounding community, and created an unfair advantage in the marketplace. The audit further noted that PIP skirted both federal and state prevailing wage statutes [PLN, February 2005, p. 22).

Ultimately," says Christian Parenti, author of Lockdown America (distributed by PLN), prison labor just doesn't make economic sense." Nor is it morally defensible. Many countries, including the U.S., ban the importation of prison made goods because, in addition to stealing jobs from the private sector, prison slavery creates a fertile breeding ground for human rights abuses. It's inconceivable that the U.S., a country which supposedly deplores the use of slave labor in foreign sweatshops, would condone similarly unfair treatment of its own citizens. However, while banning the importation of prison made goods, the US exports its own prison made goods to other countries.

If prison officials and politicians truly wish to use these programs to benefit prisoners, they should ensure the work conditions really do mirror those on the outside. Until then (with a nod to Victor Hugo), prisoners in the 21st century will continue to be degraded by the exploitation of their labor. PLN reports extensively on the issue of prison slavery. See indexes or visit online at for more.

Source: Charlotte Observer

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