- The Washington Times - Saturday, April 8, 2000

Today 2 million inmates are "doing time" "in stir." Outside prison walls, it's called "hanging out" or loitering. We taxpayers subsidize this forced leisure to the annual tune of $40 billion.

Is this stupid or what? A study of inmate idleness by the American Bar Association shows that it's getting worse, not better. The prison population has grown so fast that the share of state and federal prisoners with real (wage-earning) jobs has dropped from 7.6 percent to 6.5 percent since 1990. And more than 95 percent of these guys will eventually get out with few or no work skills, a good system to foster crime and additional stays in prison.

Tremendous unemployment, nonexistent work skills, low productivity, and terrible recidivism that's quite an indictment. As the late Supreme Court Justice Warren Burger said, "What business enterprise could conceivably succeed with the rate of recall of its products that we see in the 'products' of our prisons?"

The answer to this sad situation lies not in more government but less. Prisons should aggressively recruit private enterprise to employ inmates within and alongside prison walls. Prisoners could easily create at least $20 billion in extra value annually.

Why isn't it being done? It is, but on a small scale. Even with a national shortage of labor, misguided do-gooders, protectionist trade associations, bureaucratic inertia and Depression-era laws viciously stop prisoners and businesses from mutually beneficial trade. Study after study shows that employment before release not only improves behavior behind bars, but also serves as the strongest antidote to crime after release.

Creaky, old-style socialist industry relies on mandatory (monopoly) sales to other government agencies: license plates, highway signs, and office furniture. It's irredeemably inefficient and government only buys so much.

The private sector must provide the bulk of jobs, as it does outside prison.

But that's banned. The waiver process requires businesses to vault a whole series of permissions and expensive barriers. Reform demands that we repeal these laws and that prison wardens or business-savvy agents market prison labor to legitimate businesses.

An inmate working at $7 an hour can easily earn $14,000 a year. Eighty percent of his or her earnings are customarily used to reduce dependency on taxpayers, compensate victims and pay court costs. The remainder is available for personal consumption, help for the prisoner's family and savings for use upon release.

Rep. Bill McCollum, Florida Republican, has offered a bill to lower these barriers to private-sector jobs for both state and federal inmates. A competing bill by Rep. Pete Hoekstra, Michigan Republican, would endanger current federal jobs for prisoners by removing the captive federal market and forcing prison-produced products into competition with private products for the federal contracts the prison system now fills. Mr. Hoekstra told the New York Times, "What you end up with, in certain cases, is the federal government getting inferior products at higher prices."

He's right: Drop the mandatory source rule that protects Federal Prison Industries (FPI) from the salutary competition that makes our economy great. But make FPI into a business recruiter, give it access to the commercial market, and privatize it to make it efficient enough to compete.

Dropping barriers and opening markets all around is the goal. There is talk of a compromise between the McCollum and Hoekstra forces.

But wouldn't prison labor steal private-sector jobs? No, a prisoner-employee is a job creator, on balance, because prison production, just like any newly created value, raises the demand for the outputs of other workers. That means more jobs and higher real wages in the rest of the economy. The real job killer is the unemployed prisoners of today.

What about unfair wages? Wages reflect anticipated productivity in a competitive marketplace. As competition builds, prison wages will take care of themselves, especially if corrections officials have an incentive to promote prison employment and wages, say, with 1 percent of inmate earnings. In the meantime, payment of the federal minimum wage or more can serve as a shield against the charge of "unfair competition" by enterprise prisons.

What about subsidies? Keep them minimal but recognize that getting able-bodied adults off the welfare rolls and into productive jobs is a social gain, and taxpayers have been willing to subsidize that transition. An even higher return exists for prison labor. Work for prisoners has many enemies, as did proposals to put welfare recipients to work and for many of the same reasons. But the states have shown that the vast majority of welfare recipients can become productive, benefit the economy, and build new lives. We should expect no less from the nation's prisoners.

Morgan Reynolds is director of the Criminal Justice Center for the Dallas-based National Center for Policy Analysis, as well as a professor of economics for Texas A&M; University.

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