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6/4/12

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

LyndonBainesJohnsonSchoolofPublicAffairsattheUniversityofTexas;RichardFreeman,

professorofeconomicsatHarvardUniversity;AlanKrueger,professorofeconomicsand

publicaffairsatPrincetonUniversity;JeffreyKling,assistantprofessorofeconomicsand

publicaffairsatPrincetonUniversity;andStevenLevitt,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

laborstandards;strengtheningemploymentandtraining;andpromotingmoreeffective

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

MicroeconomicAnalysis;LindaHaithcox,directorofeconomicdevelopmentoftheNational

AssociationfortheAdvancementofColoredPeople;WendellPrimus,directoroftheIncome

SecurityDivisionoftheCenteronBudgetandPolicyPriorities;SteveSchwalb,chiefoperating

officerofUNICORFederalPrisonIndustries;BrendaV.SmithfromtheAmericanUniversity

SchoolofLaw;CharlesSullivan,directoroftheNationalCURE;andGregWoodhead,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.Itisclearthatmoreresearchisrequired­Oneconomiceffects;onhowwork

insiderelatestorecidivismandemploymentoutside;andonhowinmatescanbereintegrated

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.