Companies That Use Prison Labor

Rachel Curry - Author

Nov. 11 2020, Published 9:47 a.m. ET

In grade school, American children learn about the 13th amendment. They're told the 1865 addendum to the U.S. Constitution was the end of slavery, thanks in large part to President Abraham Lincoln. However, they're not told about the criminal clause within that amendment that makes it okay for companies to use prison labor.

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"Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."

In short, slavery is illegal, except when someone is convicted of a crime. That penal labor loophole has gone on to affect millions of prisoners in the last 155 years. It raises the question, why are we really imprisoning our people?

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What is prison labor?

Prison labor is work that able-bodied inmates in the U.S. prison system are forced to do for minimal or nonexistent pay.

Both federal and state prisons use prison labor. Some organizations have estimated how much company revenue prison labor brings in each year in the U.S. The low end of that estimate is $2 billion.

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Why do companies use prison labor?

Companies use prison labor for one simple reason: to boost their bottom line.

For these businesses, cheap or free labor is the foundation of their business plan. In fact, private prisons are some of the most active proponents of policies that keep prisons full. This is because they need people to perform the work that brings in money. Ultimately, full prisons are a job market incentive.

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Corporations tend to distance themselves from the prison labor they rely on by subcontracting their work to companies who go on to contract labor from the prisons.

What are some companies that use prison labor?

More than 4,100 companies in the U.S. profit from mass incarceration. Many of these are prisons themselves, but some are companies who rely on penal labor to manufacture goods or provide services. Around 63,000 prisoners produce goods for external sale.

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  • Verizon and Sprint use inmates to provide telecommunication services.
  • Fidelity Investments uses some held assets to fund the American Legislative Exchange Council (ALEC), an organization that promotes inmate work.
  • KMart and JC Penney use inmate labor in Tennessee to make denim products.
  • Walmart uses prison labor to clean barcodes so products can be resold.
  • Some cheese and fish from Whole Foods comes from prison labor.
  • Circuit boards from IBM come from Texas prisoners.
  • Wendy's and McDonald's use prison labor to process beef for their food products.

In addition to manufacturing goods for external sale, prisoners often take part in work release programs. They'll go on site to a private company and perform work for them there before returning to prison. This is common with prisoners, but it's also common with drug and alcohol rehab patients, as divulged in the Reveal series American Rehab.

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How much money do inmates make?

An inmate's hourly rate varies by state. For federal prisons, UNICOR-employed inmates make anywhere from $0.23–$1.15 per hour. Many prisoners don't make anything at all.

Prisoners work in what many refer to as skilled and unskilled labor, but it's worth noting that this language promotes unconscious bias. All labor is skilled in some way—and all labor is worth paying. 

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According to the Ava DuVernay documentary 13th, white males have a 1 in 17 chance of ending up behind bars in the U.S., while Black males have a 1 in 3 chance. The penal labor norm is more than just an American issue. It's a race and class issue, and the criminal clause in the 13th amendment is at the root of it.


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