Profiting from Prison Labour
Is it right for a company to use convicts for cheap labour? Is it unfair to pay prisoners less than the minimum wage? Is it wrong to use such labour in a way that displaces “ordinary” employees?
The Guardian recently ran a story about prisoners doing work for a private telemarketing company in a way that may (or may not, depending who you ask) be taking jobs away from law-abiding folks. The prisoners in question are being paid the equivalent of about four and a half dollars an hour — just a fraction of the legal minimum wage.
Prison labour is a great topic, ethically, in part because it tends to make people of just about all political stripes uncomfortable, albeit for different reasons. Some worry about the prisoners, who may have little option but to accept whatever crummy labour comes their way. Others may have the opposite worry: why coddle criminals by giving them the benefit of a job or job training? They’re in prison to be punished, not to learn skills. Still others worry not about the prisoners at all, but about the non-prison workers who are displaced by prisoners who inevitably “underbid” them for jobs. You could add to that list the businesses who don’t use prison labour, and who are therefor at a competitive disadvantage. How can you compete when your competitor’s labour costs are half what yours are?
We’ll leave for others the basic question of whether, or under what conditions, penal labour is itself justified, and instead focus on the business ethics issues. And as far as I can see, from that point of view there just isn’t a problem.
The “law-abiding” workers put out of a job have every right to complain, but that’s not to say that they have a justified complaint; they haven’t been wronged in any way. Other things being equal, no one has a right to any particular job. The worker who finds herself out of a job because she’s been underbid by cheap prison labour is no more treated unjustly than the worker underbid by cheap labour overseas. (For that matter, the prisoner arguably needs the job more than the average UK worker does, as does the worker overseas.) If I needed a plumber and found one who charged $100/hr and another who charged $50 an hour, the more expensive one would have no cause for complaint if I opted for the cheaper. It is reasonable, and not unfair, for me to try to keep my costs down.
Nor can a competing company rightly complain. A company reaps no unfair advantage by using prison labour. Sure, it reaps an advantage, but not through anything underhanded. As long as prison labour isn’t acquired by fraud or by, say, bribing or pressuring officials in the justice system into making decisions that violate their sworn duties, then prison labour is just another form of cheap labour. From an economic point of view, they’re to be congratulated for innovation. As long as other companies have the option of obtaining (or competing for) access to the same cheap labour pool, there’s no injustice here.
There’s an important lesson here about what counts as an “ethical issue.” The use of prison labour is, to be sure, an ethical issue. There are important rights at stake, and the decision to use such labour has important consequences. Such being the case, the decision and the details are not to be taken lightly. But that’s not to say that the practice itself is unethical. It is not, in and of itself, unjustified. But it is still good and socially healthy that the practice gives so many of us cause to pause and reflect.
The Business Ethics Blog 
For me, your topic goes back several years. In the 90s, many US states used prison labor to develop the first digital road networks (beyond TiGER/Line files from the US Census). Even Census data, particularly from Texas and Maryland, was developed using prison labor and indirect competition with private enterprise. In the 90s, digital mapping was making strides but very expensive. Capturing digital road data was very time-consuming and mundane work. People who did such work were called “digi-drones.” Capturing road networks meant standing at a large digitizing table for hours pushing a “puck” along a line, tapping a button to set points which the software would translate into a line.
Many engineering companies would hire entry-level college students, paying $7/hr or so. Prisoners might be paid per map or per hour, usually about $.50/hr. I know Texas captured a lot of early map data, soils, topography, and roads using the incarcerated.
I’m sure there is much in the way of historical precident, such as the chain gangs popular in the American South, Alabama, Georgia, Louisiana. Florida tomato growers have caught significant attention for the near prison-like conditions in which some of the migrate workers live.
Concerns of “Law-abiding-citizens” are not unjust. A society which favors positive competitive environment and supports “equal rights and opportunities” to everyone has several questions over the use of prisoners for “cheap labor”.
1: Do prisoners have authority to decide their wages?
2: Do all companies have equal rights and access to same prison labor?
There is marked difference between cheap labor overseas and cheap labor in prison. Overseas cheap labor is “competitive advantage” for those people who are willing to work at a lower cost due to low cost of living in their respective countries. However, in prison, it is a “forced advantage” by keeping principles of free market at stake.
There is no denying of the benefits it brings to the “companies” who have access to such labor. However, why select “private companies” should be allowed to reap benefits out of such situation? A person becomes a prisoner by acting against the “Law of State/Land”. Let the “State/Land” be beneficiary of such situation. Rather than making prisoners work at lower wages, State should allow them to work at “competitive/market wages” and tax prisoners higher as compared to “law-abiding-citizens” on their incomes.
Chris, I’m afraid you oversimplify the issue into a libertarian reductio. First off, if this were in the U.S., and I know it’s happening here too, the government is not really representing its people all that well when it has the highest incarceration rate in the developed world, at over 1.6% of the general population, and then hires out that captive labor at a bargain to for-profit businesses who might otherwise be employing foreigners overseas. I don’t know what the UK incarceration rate is off hand, but I do know unemployment is rather high at 8.1%.
At a time when unemployment has been high for years on end, and the U.S. at least seems to be in a near permanent recession due to a lack of good blue collar jobs, the Federal government and American companies (and consumers) need to do whatever their can for their country as a whole. So while this action from a purely business ethical point of view may not be unjust, it doesn’t seem all that socially responsible either, even in the UK. Ultimately, I don’t think we could reasonably call them good corporate citizens.
Julian:
Thanks for your comment, but you haven’t given any actual *reason* why the corporate behaviour described is in any way socially irresponsible. If we are to accuse them of being bad corporate citizens, we need at least to be able to state a reason. The incarceration rate, whatever it is, surely isn’t their fault!
Chris.
Actually, I did. Given the current context, they are not being considerate to their home country’s citizens.
The incarceration rate may not be a direct result of corporate behavior. But that is rather a moot point since the problem exists nevertheless and needs to be confronted by all–not just the gov’t. This is a bit like profitting from a business context with no labor, safety, or environmental standards and simply blame that lack of standards on the gov’t.
And the unemployment rate, which is the main issue, is surely partly the fault of just this kind of corporate shortsightedness, which incidentally surely increases the incarceration rate indirectly from a dearth of good jobs that makes more people turn to crime.
How are they not being considerate their home country’s citizens? They’re giving them jobs. Sure, *some* of those citizens are cranky about it, but the question is whether such crankiness is justified. Being criticized is not in itself damning.
Essentially, good citizens, like good corporate citizens, strive to behave in ways that are in the best interest of their society as a whole. The radical neoclassical economic dogma of self-interest does tremendous damage to that compact, that solidarity. Look to places like Germany or even China for instructive counterexamples of people who know how to think collectively. They will be the ones who end up thriving, while the myopic individualist “nations” will be divided and conquered. Indeed, it is our very social nature that allowed us to evolve to this point, as E.O. Wilson’s recent revolutionary article in the journal Nature, and book: The Social Conquest of Earth, outline in implacable mathematical and sociobiological detail.
They are only giving them low-payed prison jobs, jobs that otherwise would pay more.
That’s not very socially conscious. It’s taking advantage of a captive labor force that can’t collectively organise.
Ah, OK. I would categorize that as a wrong (if it is wrong) against the prisoners, rather than a “social” wrong. Not to split hairs, but I think it’s an important distinction.
I suppose these companies could insist on paying minimum wage. I suppose we don’t know if they have that option.
It’s also a social wrong because they are creating less social value in an environment in which law abiding citizens are desperate for work.
Indeed sacrificing that social value to take advantage of a literally captive labor pool.