...Are there no workhouses?"  


      In such fashion did the ghost of Christmas Present mock Ebeneezer Scrooge's rather insensitive response to the question of what would become of the poor and disenfranchised in Charles Dickens' A Christmas Carol. Now according to a special report in the D.C.-based Counterpunch newsletter (Jan 1-15, 1997), the prisons and workhouses are booming, not in Dickensian England, but right here and now in the good old U.S.A. and while the numbers in stir (1.6 million Americans were in prison at the end of 1995) might appall some, the clanging of the cell doors means sweet music to the growing privately-owned prison industry.  
      Thanks to tight government budgets, stricter repeat-offender sentences, the potential of a cheap labor market, and a more vigorous prosecution of the "drug war", the kingpin of jailing for dollars, the Corrections Corporations of America, has seen its stock value soar from $8 per share in 1992 to $30 in 1996, with an 81% increase in revenue in 1995 alone. Other-prison-for-profit outfits have seen similar increases, including Wackenhut, which is now listed among Forbes' top 200 small businesses. All told, private prisons have seen their "market share" (some market) grow from five prisons in 1987 to over 100 as of this issue. Numbers may mean strength, but in the prison racket, numbers mean survival, and profits. Private prisons have resorted to imposing tougher disciplinary standards (like making it harder to get time off for good behavior') and mishandling or losing parole papers and forcing inmates to stay beyond their release dates in order to maintain the requisite 90-95% occupancy rate to avoid, as Prudential Securities has said, "low occupancy... a drag on profits." Prisons have proven such a good source of cheap labor, corporations are flocking to the jailhouse to maximize profits. Where prisoners used to hammer out license tags for the state, now they saw, sew, and solder such items as car parts, clothing, furniture and computer circuit boards for major U.S. companies. The tactic has proven so lucrative that the a U.S. company operating in Mexico closed down its operations and moved them to San Quentin, while another firm dumped 150 workers in Texas and set up shop in a private prison in Lockhart, where prisoners now assemble circuit boards for such outfits as IBM and Compaq. State legislator Kevin Mannix of Oregon has issued an invitation to Nike to shift its operations from Indonesia to his state. "We could offer competitive prison labor", says Mannix. How competitive? Pay scales, which may run as high as $400 per month "take home" in government prisons, are as low as 17 cents per hour in private prisons. Pay rates at the CCA prisons max out at 50 cents per hour for "highly-skilled labor." Such financial rewards don't go far in the private canteens, where the buy-low, sell high axiom of the fee market abounds. Inmates in a CCA-run facility in Florida complain of $2.50 charges for phone calls, and exorbitant prices for necessities such as soap, toothpaste, toothbrushes, and clothing, which are provided to inmates at government-run prisons. Of course, the operators of for profit prisons aren't the only ones on the chow wagon. Large-scale investors too, capitalizing on hard times, are buying in big. Among ther celebrated names backing the prison business are American Express, General Electric, Goldman Sachs & Co., and Merrill Lynch, Smith & Barney. High-tech firms are scrambling to move items like monitoring systems which bar code prisoners, while AT&T hustles to get a lock on the prison communication business.  
       The social cost? Former correction officer Jerome Miller estimates that the "American gulag" system will house between three and five million inmates in the next 15 years, composed mostly of African-American men. 

    The price system is resilient. While we acknowledge that technological change is at the heart of our economic woes, corporate America losses no opportunity to exploit the trend. Grind a portion of the population down to the point at which crime is their only out. Then imprison these people (at taxpayers' expense) and use them to turn out products at wages amounting to a fraction of those on the outside, displacing higher-paid workers, many of whom will also be forced into illegal or violent acts to survive or as a reaction to the stress of economic insecurity (especially as government support programs are cut to the bone)-thus creating a constant supply of low-wage inmate workers. What kind of motivation is there to reduce crime when investors' profits depend on full prisons? Not only do the chief beneficiaries of the Price System enrich themselves by promoting the existence of crime, they will no doubt be congratulated by a population seeking protection from the victims of the very system that is responsible for most of the crime - and gleefully pour into stores and snatch up those cheap goods that once again proudly say, 
"Made in U.S.A.".

Distribute freely  
Copied from:
Editor: Steve Doll 
333 Tropical Lane, 
Ormond Beach, Fl 32174 
Ph/Fax 904-667-1594 


Back To The CBG Homepage 
April 7, 1997