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The Devil Is in the Details: National Symposium on the Economics of Inmate Labor Force Participation.

TheDevilIsintheDetails:NationalSymposiumon theEconomicsofInmateLaborForceParticipation.
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Author: Will,Jill GeographicCode: 1USA Date: Oct1,1999 Words: 2332 Publication: CorrectionsToday ISSN: 01902563 Ithasbeenarelativelyquietlegislativesessionandthecommissionerbreathesasighofrelief. Thebruisingbudgetbattlesareover.Noescapes,noriots,noexcessiveuseofforce allegations.Foronce,correctionsisoutofthelimelight.Then,thephonerings.Theheadofthe CorrectionsCommitteewantsanswers"rightnow!"Amajoremployerinherdistrictisgoing outofbusinessandsaysunfaircompetitionfrominmatelaborhasdrivenhimtobankruptcy. Thecommissionergetsthatfamiliarsinkingfeeling,knowingtheinformationneededtodefend thedepartmentjustisn'tavailable. Economicimpactsplayahugeroleintheoftenvociferousdebateoninmatelabor.Does anyonereallyknowwhatthoseimpactsare?Thatistheintriguingquestionthatbrought togetherauniquegroupforthefirsteverSymposiumontheEconomicsofInmateLaborForce Participation,May21,1999,inWashington,D.C.Thesymposiumwasdevelopedby CommunityResourceServicesInc.(CRS),withfundingfromtheCenteronCrime, CommunitiesandCultureoftheOpenSocietyInstitute.TheGeorgeWashington UniversityDepartmentofEconomicsplayedhosttoanexpertgroupofeconomists,guest panelistsandabout150audiencemembersrangingfromcorrectionsprofessionalstoinmate familymembers. SymposiumOverview NationallyknowneconomicsjournalistAmyKaslowofNationalPublicRadio'sMarketplace, andformernationaleconomicscorrespondentfortheChristianScienceMonitor,servedas moderatorfortheday'sproceedings.AfterageneralstatisticaloverviewoftheU.S.labor market,participantsspentafulldaytakinginpresentationsofformalacademicpapers, followedbylivelypanelquestionandanswersessionsthatbroughttheacademicsdownfrom theirivorytowers,andevenhadtimetodosomeworkinsmallgroupexercises. Forthisday,criminaljusticeandcurrentcorrectionalindustrypracticestookabackseat.The conferenceorganizerschoseinsteadarigorousexaminationofbasiceconomicissuesand argumentsoninmatelabor.Theorganizersalsowantedtoexaminesomeofthebroader policyandsocialimplicationsofinmatelabor.Thesymposiumhopedtoinvolveawidearray ofstakeholdersbeyondthecorrections,industryandlaborstakeholderswhohave traditionallydebatedthisissuetoincludeinterestsinvictimcompensation,taxation,poverty, economicdevelopment,familyandchildsupport,substanceabuse,health,abuseand violenceprevention,andotherintereststhatareaffectedbybothinmateworkoridleness.
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The Devil Is in the Details: National Symposium on the Economics of Inmate Labor Force Participation.

Staffalsohopedfor,andgot,greaterinvolvementoffederalgovernmentagenciesnotusually associatedwithcorrectionalissues.Representativesfromthedepartmentsoflabor,the treasury,commerce,housingandurbandevelopment,education,healthandhuman servicesandjustice,aswellasthepresident'sCouncilofEconomicAdvisorsandtheOfficeof NationalDrugControlPolicyattendedthemeeting. InmateLaborPolicies Adrivingforceingettingthesymposiumoffthedrawingboard,ThomasPetersik,Ph.D, economistandvolunteerwithCURE(CitizensUnitedfortheRehabilitationofErrants),opened theproceedingsbydescribingthecurrentstateofinmatelaborpoliciesasaloselosesituation foreveryoneTaxpayers,inmates,criminaljusticesystemsandthegeneralpublic.He acknowledgedthecomplexitiesofinmatelabor,buturgedtheattendeestopurposelyfocuson economicissuestotestoutthepremisethatthecurrenteconomicanalysisofinmate employmentisincorrect.Bybringinghardeconomicanalysisintothedebateforthefirsttime, Petersikalsowantedtoprovideopinionleaders,thepublicandpolicymakerswithinformation thatcouldsupportfuturepolicychanges. Petersikurgedattendeestoconsidertheissueofinmateemploymentinamuchbroadersocial andeconomiccontext.Itdoesnotjustaffect1.8milliondisconnectedinmates,butinfact, nearly5millionAmericans.Thisgroup,roughlyequaltothepopulationofonestate,includes 1.8millioninmates,2.2millionunsupportedminordependentchildrenofinmatesand1million mostlylowincomewomenmothersandgrandmothersofinmates'childrenwhobearthe financialresponsibilitiesofsupportingboththeinmatesandtheirchildren. PetersikandsymposiumcoorganizerRodMillerofCRSInc.recruitedtopmainstream economists,askedthemaseriesofquestionsontheeconomicsofinmatelaborforce participationandleftthemwithcompletefreedomtoreturntheirobjectiveconclusions.The panelistswereRayMarshall,formerU.S.secretaryoflaborandprofessoremeritusatthe LyndonBainesJohnsonSchoolofPublicAffairsattheUniversityofTexasRichardFreeman, professorofeconomicsatHarvardUniversityAlanKrueger,professorofeconomicsand publicaffairsatPrincetonUniversityJeffreyKling,assistantprofessorofeconomicsand publicaffairsatPrincetonUniversityandStevenLevitt,professorofeconomicsatthe UniversityofChicago. EconomicImpacts Themajorconclusionofallfiveeconomistsinsharpcontrasttopopularbeliefisthatit wouldlikelybegoodfortheU.S.economyifinmatessuccessfullyparticipatedinthelabor force.Accordingtotheeconomists,theGrossDomesticProduct(GDP)wouldincreaseand consumerswouldbebetteroffifinmateswereabletobeemployed.Moreover,theysaid benefitswouldbewidespreadifvictimswerecompensated,taxpayerswerereimbursedforthe costsofcorrectionsandchildrenandfamiliesofinmatesweresupported. However,therealsoweresomeimportantlimitationstothisoverallpositiveconclusion.The economistsmadeclearthattheywereexpressing"preliminaryopinions"andnotfinalor definitiveconclusions.Theynotedthatlittlerigorousattentionhasbeengiventotheissue, makingmoredefinitiveconclusionsimpossibleatthistime.Theyalsoemphasizedthree temperingpoints.First,while"good"fortheeconomy,thepositiveeffectofinmateemployment onGDPappearstobeminimal.Bothintermsofpercentageofemploymentandindollar
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The Devil Is in the Details: National Symposium on the Economics of Inmate Labor Force Participation.

amountsofoutput,thiseffectwouldbe,inthewordsofKlingandKrueger,"lessthanthe typicalmagnitudeofstatisticaldiscrepancyinthenationalincomeaccounts." Second,whilethegeneraleffectwouldbesmall,somepopulationsorindustriescouldbe disproportionatelyaffected.Lowskill,lowwageworkersofbusinessesindirectcompetition withbusinessesemployinginmateswouldbemostaffected.Whilenottotallyclear,the consensusoftheeconomiststendedtobethatlowwagecivilianemploymentprobablywould notdecline,butthatthehourlywageratecouldslipabout5percent. Finally,withoutventuringtheoddsofsuchascenario,Freemanraisedthe"horrorstory" possibilityofincreasedinmateemploymentandreducedwagesforlowincomecivilians pushingincreasednumbersofciviliansintocrimeandleadingtoanetsocialloss. EverypresenteremphasizedthatitisnotsufficienttolookonlyattheeffectsonGDP,thesum ofeconomicactivity.Manyofthemosteconomicallysignificantaspectsofinmatelaborarenot capturedbythedollarvalueofthegoodsproducedbyinmates.These"socialbenefitsand costs,"theconsequencesofallowinginmatelabor,includeeffectsoncompetingworkersand whetherornotthereisanactualreductioninrecidivismrates.Informedpolicydecisionsfrom aneconomicstandpointdependonmoreresearch,particularlyregardingtheeffectson recidivismfrominmatelaborforceparticipationandhowitcorrelatestothecostofcrime(or reductionincostofcrime.)Theeconomistsalsoagreedthatcurrentconflictingrestrictionson andsubsidiesforinmatelabordonotmakeeconomicsenseandtheprivatesectorshould haveamuchgreaterroleinemployinginmates. Finally,inmatelaborunionswereendorsedbyfourofthefivepresenters'papersand presentationsAnideathatlikelywouldsendchillsdownthespinesofeverywardeninthe country.Theauthorsadvancedseveraloptionsforallowinginmates'representationandinput Inmateadvisorycouncils,membershipinexistinglaborunionsoreventheformationofunions. Accordingtothepresenters,unionswouldofferanalternativedisputeresolutionprocessless expensivethanlitigation,assistanceinenforcementofexistinginmatelaborprotectionsand accesstoapprenticeshipandtrainingprograms. InmateLaborForceImprovement Therewereseveralideasputforthtoreformthecurrentsystem.Marshalladvocatedthe expansionofpaidemploymentwithintheframeworkofbalancedcompetitionandprotective laborstandardsstrengtheningemploymentandtrainingandpromotingmoreeffective reintegrationofexoffendersintotheworkforce.Inordertoselltheserecommendationstothe publicandtopolicymakers,hesaidbetterevidenceisneededwithmoredetaileddata followedbycarefullydesignedpilotprojects. KruegerandKlingreachedmanysimilarconclusions,buttookaharderlineongettingthe governmentoutofbusiness,seeing"notheoreticalrationaleforthegovernmenttobethe employerofinmatelabor."LikeMarshall,theysupportedtheFairLaborStandardsActand OccupationalSafetyandHealthcoverageforinmates,aswellastherighttoformorbelongto unions.Theyalsosaidthatthegreatesteconomicbenefitwouldbefromreductionsin recidivism,notresultsofproduction.Theyurgedstudyofmoreeffectivewaysthanworkto achievethisend,includingeducation. AccordingtoFreeman,"anideallystructuredprisonlaborprogram"woulddirectprisonlabor intoareasthatareasnoncompetitivewithdomesticproductionaspossibleandwouldemploy
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The Devil Is in the Details: National Symposium on the Economics of Inmate Labor Force Participation.

inmatesmostlikelytoreturntolegitimatesocietyandmakeuseofskillslearnedfromprison labor.Histalkspecificallymentioned"littleplastictoysfromChina,"butdidnotspecifyatwhat wageinmateworkersshouldcompetewithChineseworkers.Duringlaterquestioning,he allowedforthepossibilityofsubminimumwagerates. IncontrasttoMarshall'sincremental,pilotprojectapproach,Levitthadnoconcernsabout revampingtheentiresystem.Theinfamousinvisiblehand,hesaid,shouldsweepaway existingpractice,"dismantlethecurrentsetofregulations,putallcompetitorsonalevel playingfieldandletthemarketdictatetheoutcome."Hisprescriptionincludedcomplete privatizationofprisonindustryandcompetitivebiddingfortherighttoemployinmates.Likethe otherspeakers,healsowasinterestedinlevelingtheplayingfieldbetweenemployersof inmatesandfreeworldworkersandadvocatedextendingcurrentcivilianlaborlawstocover inmates.Finally,heproposedtheeliminationofallpreferencesandrestrictionswithrespectto prisonmadegoods. QuestioningtheEconomists Followingtheformalpresentations,aneightmemberpanelquestionedtheeconomists.The panelwasspecificallydesignedtointroducethespeakers,theotherpanelistsandespecially theaudiencetoawiderarrayofconcernsandinterests.Thisdesignbroughttheeconomistsa littlenearertothegrittyrealityfacedbystakeholderspotentiallyaffectedbyinmatelaborand bycorrectionsprofessionalsdealingwithoutragedcompetitors. ParticipantswereGusFaucheroftheU.S.TreasuryDepartment'sOfficeof MicroeconomicAnalysisLindaHaithcox,directorofeconomicdevelopmentoftheNational AssociationfortheAdvancementofColoredPeopleWendellPrimus,directoroftheIncome SecurityDivisionoftheCenteronBudgetandPolicyPrioritiesSteveSchwalb,chiefoperating officerofUNICORFederalPrisonIndustriesBrendaV.SmithfromtheAmericanUniversity SchoolofLawCharlesSullivan,directoroftheNationalCUREandGregWoodhead,senior economistofAFLCIO'sPublicPolicyDepartment. Thequestionstrulyreflectedthefactthatthedevilisinthedetails.Practitionersof"theDismal Science,"includingthoseatthesymposium,areaccustomedtodealingwithhighlevel abstractions,generalizedeffectsandimpactsmeasuredinthethousandsofjobsandtrillions ofdollars,andtheguestpanelistsbroughttheirmicrolevelconcernstothediscussion.Theday closedwithsmallgroupreportsthatallowedaudiencemembersachancetosaywhat encouragedandchallengedthemabouttheday.Someofthemostpositivecommentswere directedtowardguestpanelistWoodhead,whospokeatlengthaboutunionconcerns,butalso aboutapositivemodelofunioninmateworkcooperation.TheIowaApprenticeshipModel bringsformalapprenticeshiptrainingintoIowaprisons.Italsoaffordsreleasedinmatesthe opportunitytocontinuetheirapprenticeshipsontheoutsideandmoveonasfullfledgedunion members.Itwaswelcomenewsforthoseintheaudiencewhohavespentyears unsuccessfullytryingtoestablishrelationshipswithunionsintheirjurisdictions. Attendeesalsowereencouragedbytheideathathavinginmatesparticipateinthelaborforce hasanoverallpositiveeffect.Asonepersonreported,shewasencouragedbecauseitmeans thereislittleexcusefornottryingtomakechangesonthemicrolevelthatwouldimpacturban communities.Anumberofcommentswereofthe"wheredowegofromhere?"variety. Respondentswerechallengedbythelargegapbetweentheoryandtheirownsituations. Conclusion
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The Devil Is in the Details: National Symposium on the Economics of Inmate Labor Force Participation.

Forreadersstilltraumatizedbycollegeeconomicsclasses,don'tbeafraidtotakealookatthe symposiumpapers.Theycontainawealthofinformation.Freeman,KlingandKruegerpacka lotofquantitativeanalysisintotheirwork.Levitt'sworkisstructuredwithsomekeypointsthat couldbeusedtolaunchdebates.Marshall'swork,whichisthelongest,isinmanywaysthe most"userfriendly"fornoneconomists.Asbefittinghismultiplerolesasresearcher,planner, labormediatorandformerCabinetofficial,hisworkintegratestheoryandeconomicanalysis withhistoryandcurrentpolicyconcerns.ThepaperswillbepublishedbyCRSInc.thisfalland willbeavailableontheInternetatwww.corrections.com/crs. Thesymposiumprovidedagreatstartingpointformorework.Thedevilinthesedetailsis implementation.ItisclearthatmoreresearchisrequiredOneconomiceffectsonhowwork insiderelatestorecidivismandemploymentoutsideandonhowinmatescanbereintegrated intotheeconomicandsociallivesoftheirfamilies.Correctionalmanagersneedtotakenew informationbacktotheircommunitiesandblowsomefreshairintowhatisoftenastale debate.Theopenexchangeoffact,ideasandopinionsattheNationalSymposiumonthe EconomicsofInmateLaborForceParticipationcanserveasamodelformoreworkand discussionsthatareurgentlyneededatlocalandstatelevels. REFERENCES Freeman,Richard.1999.Makingthemostfromprisonlabor.PaperpresentedinMay. Kling,JeffreyandAlanKrueger.1999.Costs,benefitsanddistributionalconsequencesof inmatelabor.PaperpresentedMay28. Levitt,Steven.1999.Preliminaryopinionontheeconomicsofinmatelaborparticipation.Paper presentedMay26. Marshall,Ray.1999.Preliminaryopinionontheeconomicsofinmatelaborparticipation. PaperpresentedinMay. JillWillisexecutivedirectoroftheWashingtonJailIndustriesBoard.
COPYRIGHT1999AmericanCorrectionalAssociation,Inc. Copyright1999Gale,CengageLearning.Allrightsreserved.

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