Industries inside U.S. prisons have become a nearly $2 billion-a-year business built on a foundation of cheap labor costs that, critics contend, blocks competition from smaller, private companies, the Pittsburgh Tribune-Review reports. Until this year, the Metro Flag Co. of Dover, N.J., competed against prison factories in Pennsylvania and New Jersey. Now, the firm can’t keep up with them. “We’re just giving up the business. We’re walking away from it because the price of the product has gone below the cost,” company owner Alan R. Siegel said.
Although many states still produce vehicle tags, industries behind bars now make furniture, clothing, cleaning supplies, electronic components, and food products. Many prison industries also offer a long list of services, including wild-horse training in Colorado and telemarketing in New Mexico. “As a program it teaches them a good skill,” said Carol Martindale Taylor of the National Correctional Industries Association. “A lot of these inmates never had a 9-to-5 job on the outside.” Furniture producers in Michigan sued the Federal Bureau of Prisons and its $800 million-a-year company, Federal Prison Industries, for shutting out local competition. A federal appeals court ruled that the furniture makers failed to prove losses of $450 million in sales to Unicor between 1991 and 1995.