A year earlier, Wisconsin's legislature had approved Republican governor Tommy Thompson's plan to amend the state's labor laws in order to allow private firms to set up shop inside the state's prisons. Thompson won passage of his proposal only after assuring legislators that the convict-labor program would not be permitted to steal the jobs of any workers outside prison walls. Michael Sullivan, secretary of the Wisconsin DOC, affirmed that prisoner labor would be used solely to make products not currently being produced in this country.
At the beginning of 1996, the Fabry company employed 205 workers at its three Green Bay-area plants. By April, 1997, less than a year after the company began hiring prisoners, Fabry's outside-the-walls workforce had fallen by 40%, to 120 employees.
Fabry laid off the fabric cutters at its city plants in August, 1996. The following month, the firm issued orders for prisoners to cut fabric for 50,000 gloves, hats, scarves and other products. Many other workers were laid off or fired in the ensuing weeks. In the first nine months of the prison shop's operation, prisoners cut or sewed 461,000 items.
Before the prison venture began, Fabry's outside workers earned up to $11 an hour. Employing free workers also entails non-wage expenses like health-care benefits, vacation benefits, unemployment compensation and workers-compensation insurance premiums. Fabry pays none of those expenses for its prisoner employees.
Democratic state senator Charles Chvala, the senate majority leader, called the Fabry layoffs outrageous. "I challenge the governor to go to Green Bay, stand eye to eye with those laid-off workers who have played by the rules all their lives, and explain why he believes inmates should have their jobs," Chvala said. "Law-abiding citizens working Wisconsin citizens -- are being forced into competition with prison inmates for jobs, and this is indefensible."
Company president John Fabry said the layoffs were unrelated to his firm's employment of prisoners. He explained that the company had been planning layoffs since 1995. If the opportunity to hire prisoners had not materialized, Fabry claimed, the company would likely have moved production facilities to Asia.
The DOC supports Fabry's assertion that the layoffs occurred independently of the convict-labor deal. "With the information we have at this point in time, displacement [of Fabry workers with prisoners] did not occur," DOC secretary Sullivan said. "To stay viable, Fabry did reduce some operations, but I am unaware of any displacements resulting from the agreement with us."
John Matthews, governor Thompson's chief of staff, agrees. "The marketplace was forcing him to find a different place to produce these products," Matthews told a reporter. "It came down to a choice between the Pacific Rim and the prison."
Senator Chvala took issue with these denials. "There can be no mistaking the connection between Fabry's downsizing and their use of prison labor," Chvala wrote in a letter to Sullivan. Chvala called on the DOC chief to cancel the Fabry contract "before more honest, law-abiding working people lose their jobs."
Federal law mandates that private companies hiring prisoners must not displace outside workers. The U.S. Department of Justice is investigating the Fabry ordeal, but the law is unclear. The term "displacement" is not defined and the statute has not yet been tested in court.
Job loss was not the only change that awaited Fabry workers after the company shifted production to the prison shop. Four months after it began hiring prisoners, Fabry slashed the wages of its remaining free employees up to $5.50 an hour. "If you want to work for what the prisoners make," said Penny Vande Voort, a former sewing-machine operator who quit following the pay reduction, "go ahead and work for John Fabry."
The phenomenon of people outside prison walls being thrown out of their jobs by companies employing convicts is not confined to Wisconsin. A replay of the Fabry affair occurred in Texas, where U.S. Technologies sold its - electronics plant in Austin and laid off 150 workers; 45 days later, the company's owners opened a facility using convict labor in a Texas prison.
Nationwide, more than 100 private firms have reached convict-for-hire agreements with 29 states. Microsoft, IBM, Victoria's Secret and TWA are among the companies that have ...