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Oregon Prison Industry Program Nets Record $28.5 Million as Prisoners Earn $1.25/Hour

by Mark Wilson

“I’m not going to get paid what I got paid on the street. But that’s part of acceptance of my life now,” Oregon prisoner James Sheppard said of his job with Oregon Correctional Enterprises (OCE), the state’s prison industry program. “Would I do this job if they didn’t pay me? Most likely.” 

Created in 1999 by Ballot Measure 68 as a self-funded agency under the state Department of Corrections (DOC), OCE is the modern descendant of the Corrections Industries program started by Oregon’s prison system over 160 years ago to provide prisoner labor for both public and private employers. 

Voters had previously passed Ballot Measure 17 – the Prison Reform and Inmate Work Act – to amend the state’s constitution to require that prisoners work 40 hours per week. That 1994 law allowed up to 20 hours of weekly job training to count toward the work requirement, but it also barred prisoners from receiving pay for their labor. [See: PLN, May 1998, p.1]. 

“Measure 17 has some serious flaws, and this is one of them,” acknowledged then-DOC Deputy Director Benjamin de Haan. “Without inmate labor, we couldn’t run the institutions. We’re obviously between a rock and a hard place.” 

DOC spokesman Jim Lockwood quickly made assurances that prison officials would not force prisoners to work without compensation. Ultimately, the DOC replaced prisoner wages with a point system. At the end of each month, a prisoner’s accumulated points are converted into a monetary amount ranging between $8 and $77 for most prison jobs. Prisoners can earn more working for OCE, which pays an average of $158 per month, according to the agency.

That is equivalent to around $1.25 per hour rather than the maximum $0.61 per hour for non-OCE prison jobs.

OCE operates 28 industry programs within 11 of Oregon’s 14 prisons, the largest of which is the Oregon State Penitentiary (OSP) with 2,000 prisoners. OCE has five industrial laundries, seven call centers, a garment factory, welding shops, sign fabrication, printing, scanning and mail service shops, upholstery, sewing and embroidery studios, and a furniture manufacturing program.

But OCE jobs are relatively scarce. The DOC has about 14,700 prisoners, and of those around 8,800 are working. OCE, however, employs just 1,419 prisoners. The rest are assigned to general labor positions, according to Roberta Angelozzi, who oversees the DOC’s work programs – including DOC-supervised jobs in the kitchen, laundry and janitorial crews, as well as maintenance of publicly-owned land and facilities.

Through contracts with the state Department of Forestry, U.S. Forest Service and Oregon Department of Transportation, the DOC uses prison labor to fight fires, restore trails and de-litter highways. As for the nearly 6,000 state prisoners who don’t work, Angelozzi admitted “the number of jobs that we can provide is the biggest issue.”

“You take a small institution that doesn’t need 20 people in the kitchen or 50 people to run the maintenance program, and you have 400 inmates, it’s hard to come up with meaningful jobs to put people in,” he said.

Some of the positions in which prisoners earn the most points – translating to a monthly paycheck of about $150 to $200 – are in the call center that OCE runs at OSP. Manager Bruce Potts said he’d like a full staff of 110 workers but operates with fewer because “there is high turnover.”

“Not everybody likes telemarketers, and they can be very rude to people,” Potts said. “These guys are told ‘no’ on a constant basis, so that’s a struggle.”

Dick Withnell, the self-described ultra-conservative former owner of a Salem car dealership, said he hired several former call center workers after their release. They were able not only to transfer sales skills they had learned but also other important business habits, like punctuality, stated Withnell, who also heads the OCE’s Advisory Council.

“The past 10, 20, 30 years, there’s been a change of philosophy for the end goal of lowering recidivism, and so instead of locking someone up and throwing the key away, it’s to teach and to give skill sets inside,” he said. 

On the other end of the pay spectrum for prison jobs is the laundry plant, with points translating to starting wages of $70 to $80 a month. Manager Damon Plattner oversees about 300 workers at the plant, which also takes in laundry from area hospitals in addition to the prison’s own needs. He admitted that the laundry jobs are tedious and competitors in the private sector are much more automated, but said modernization would eliminate positions and idle more prisoners, who are learning valuable life skills.

“For many of them,” Plattner stated, “it’s having a job for the first time and understanding that there is a requirement of [them] to do that job and keep that job.”

The laundry offers higher-paying positions in management and maintenance, he added. The prison is also bringing back an electrical apprentice program which leads to a journeyman license in six to eight years, though there are just two slots available at any given time. 

Since being appointed in 2014, after Ken Kilgore was fired for missing financial goals, OCE Director Ken Jeske has expanded contracts and boosted revenue 24 percent, increasing the industry program’s revenue from $10 million in 2006 to $25.6 million in 2015 and $28.5 million in 2017. The same law that created OCE also bars it from competing with local private employers, which is why the only client of OSP’s call center since its inception in 2011 has been Nashville-based Advice Brands, a marketing company that previously contracted with overseas call centers – a restriction that Jeske admitted makes his job “very, very difficult.”

Still, he has plans to increase the number of prisoners working for OCE following recommendations from a 2013 Portland State University strategic assessment, which faulted OCE for limiting its workforce to low-risk prisoners with at least a six-month good conduct record. Jeske has also identified new areas in which OCE could employ prisoners without breaking the rule against competing with local businesses.

For example, there is a new transcription service at the women’s prison and a new website updating program. Prisoners will be building homeless shelters – from their own design – for Oregon mobile home manufacturers. And there are plans to expand OCE’s private blue jeans manufacturing program, Prison Blues, to also make electric guitars.

“This is strictly about good business,” said DOC administrator Larry Herring. “We’re using [prisoners’] labor to get the highest possible return while they are incarcerated.” 

Of course prisoners return some of their wages to the prison system, too. In addition to commissary expenses, prisoners also get tapped for various fines – $316,810 in fines was paid in 2016 alone.

Beyond profits, though, OCE is also supposed to return value to the state in terms of reducing recidivism. A study of a similar prison industry program in neighboring Washington State found that for every dollar spent on the program the state saved $4.77 in future criminal justice costs – making the limited number of prisoners working for OCE all the more startling.

“There needs to be more skills given to inmates,” agreed prisoner David Pierce, 40. “This is my third time [in prison], and this is the only time that I’ve actually been given an opportunity to gain a skill, and this would be like a management skill. I feel like if I was given that skill my first time, maybe I wouldn’t even be here this time.”

“Many folks believe that we’re being taken advantage of, that we’re assisting in our captor’s success,” added OCE worker James Sheppard, yet “It’s the closest I have [come] to feeling like I’m free and you can’t put a value on that.”

“Sure I’d like to get paid more money,” said prisoner Michael Eric Nitschke, who has worked for OCE for two decades. But his prison industry job is “the closest to being in the community while wearing blue, because you have purpose, you use your mind and you learn skills that will be transferable upon your release.”

“You feel like you’re a human being,” he observed.

 “When you’re starting out [after release] with nothing, two or three hundred dollars [in savings] doesn’t go very far,” said Paul Solomon, executive director of Sponsors, an Oregon re-entry program that provides services to about 500 parolees annually. “The fact that almost half of the people being released from custody don’t have identified housing when they are released is a bit of a travesty in my mind. We’re paying for it one way or another.” 

A bill passed during the 2017 legislative session, which went into effect on January 1, 2018, created a “Certificate of Good Standing” to help released prisoners reduce employers’ reluctance to hire them. Many times, it takes former prisoners up to six months to find work, according to Steve Ciccotelli with the Multnomah County Department of Community Justice, who assists prisoners with re-entry.

In September 2018, a dozen advocacy groups organized a march through downtown Portland to protest the use of compulsory prisoner labor. Coinciding with prisoner work strikes organized in other states, the Oregon protest produced no prison disturbances, said DOC spokesperson Betty Bernt.

She also dismissed the idea that the DOC would spend more than what it currently pays prisoner workers, saying, “We don’t have the resources to do that. That’s just not realistic.” 

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Sources: dailyemerald.com; news.streetroots.org; The Oregonian; Statesman Journal; oce.oregon.gov; ODOC Inmate Work Programs: Report to the Governor (October 25, 1996); Oregon 1994 Voters’ Pamphlet

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