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The guards aren’t the only people employed at the Lockhart prison.

Past air-conditioned corporate offices that prisoners built themselves, about 150 male convicts make air-conditioner valves for Chatleff Controls Inc. and circuit boards for Lockhart Technologies Inc.

These jobs were one held by 150 workers in Austin. But in 1995, LTI laid those workers off and transferred the jobs here. The company gets cheap labor -- it pays workers minimum wage and doesn’t have to provide benefits or vacations -- and cheap rent of $1 a year.

Men sit under work lamps, peering through microscopes and magnifying glasses at circuit-board parts. Some solder the parts on a “touch-up line”; others check for missing pieces. Each prisoner collects about 85 cents an hour from his paychecks. The rest goes to victim’s compensation, taxes, family support and the prisoner’s own room and board.

Prison labor, which exists in public and private prisons alike, is yet another lucrative enterprise in the prison business, netting a total of $1.8 billion in 1995. Years ago, prisoners made nothing but license plates and furniture for state office buildings. Today, in 30 of the 50 states, they make a gamut of goods for the open market.

Inmates in Vermont, for instance, make snowshoes for Stowe Canoe and Snowshoe Co. Prisoners in California raise pigs for D.R. Ranch of Avenal. Oregon Prison Industries, which goes by the name of UniGroup, markets a line of convict-made blue jeans called “Prison Blues,” selling back to the public the very “gansta” culture it claims to crack down on through the criminal-justice system.

At Lockhart, Leonard Hilt, LTI’s soft-spoken controller and former president, says he enjoys having “a captive work force.” “They’re here all day,” Hilt says. “Their cars don’t break down, they’re rarely ill, and they don’t have family problems.... They’re delightful to work with.”

Many prison reformers favor prison labor because it teaches inmates marketable skills. Linda Marin, executive director of Texas-CURE (Citizens United for Rehabilitation of Errants), says programs like Lockhart’s are an improvement over the state’s tradition of forcing prisoners to work without pay. “It there’s a means for them to earn money and get benefits -- getting to work on time, having their work valued -- that’s a good thing,” Marin says.

Sitting in the touch-up line at Lockhart with his name stenciled across the back of his undershirt, Rickey Davis says he likes the program because it lets him “better himself.” “You can pretty much get yourself established for your release,” says Davis, who is serving time on a cocaine charge. “You get a chance to send your kids some money out of your check.” He can also earn “good time” off his sentence.

Not all inmates apply for jobs, however. “I’m not going to work to pay the state to send me to prison,” says Howard Zephur, lifting weights in the out-door recreation yard.

Critics worry that prison labor undercuts wages and gives scarce jobs to prisoners. “I’m concerned that prisoners would be used as a union-busting tool,” Marin says.

In fact, TWA has used inmate labor to break strikes. During a flight-attendant strike in 1986, TWA turned its reservation clerks into flight attendants and put inmates to work on the phone. The airline company still pays $5 a hour to inmate reservation clerks at a juvenile facility in Ventura, California. That same work, when unionized, pays $18 an hour.

Prison labor even beats out the competition in Mexico. In search of lower wages, San Francisco-based Data Processing Accounting Services moved U.S. assembly jobs to a maquiladora in Tecate, Mexico. But increased competition sent the company back to the United States in 1992 -- to San Quentin Prison.

“Some of the work went to China and some of the work we sent to San Quentin,” DPAS owner Bob Tessler says. “Our objective is to find low-cost labor.” The company left San Quentin in 1996 because of high prisoner turnover, but its looking for an alternative site, ideally at another prison.

Critics worry that health and safety standards in prison workplaces are not adequately enforced. Moreover, they argue, inmates can’t organize, collectively bargain or obtain concessions from their employer, who is also their imprisoner.

“I think its a disgusting economic development model,” says Rick Levey, legal director for the Texas AFL-CIO. “When you have the social cost of maintaining such a massive criminal-justice system and you pay for that through super-exploitation of workers, that’s a bad situation for the rest of society.”

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+In These Times, March 17, 1997. pps. 16-17.

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The euphoria among proprietor of private prisons is shared by financial analysts, who are herding investors into Wall Street’s latest “boom” industry. The headline above a recent USA Today story -- “Everbody’s doing’ the jailhouse stock” -- cheerfully captures the exhilaration of industry watchers.

The astronomical rise in the stock-market value of private prison companies is making investors giddy; the value of Corrections Corporation of America (CCA) stock, for example, has quadrupled during the past four years. Brian Ruttenbur, a Nashville- based analyst for Equitable Securities Corp., believes share prices will continue to climb. “There’s a lot of investment opportunities out there,” he says. “During the next 12 to 18 months, I expect [private prison] stocks to rise by an average of 40 percent, and perhaps by more.”

Because they are private firms that answer to shareholders, prison companies have been predictably vigorous in seeking ways to cut costs. In 1985, a private firm announced it intention to build a prison in Pennsylvania on a toxic-waste dump, which it had bought at the bargain rate of $1. The state legislature, however, rejected that plan.

To be profitable, private prison firms must ensure that new facilities are not only built, but also filled. A bullish report on CCA issued by Prudential Securities cautions, “It takes time to bring inmate population levels up to where they cover costs. Low occupancy is a drag on profits.” Still, say the report, company earnings will be strong if CCA succeeds in “ramp[ing] up population levels in its new facilities.” A 1995 Prudential report on Wackenhut, the other behemoth in the private prison industry, reflects the same concern: “The fine tuning of earnings figures hinges critically on bed count and when new prisons become occupied.”

The outlook on this front, however, appears promising. Ruttenbur co-authored a 1997 study entitled Crime Still Pays, which notes that the U.S. prison population “is expected to more than double” during the next 10 years, primarily due to increasing crime, rising incarceration rates and longer sentences.” More good news for investors is the rising incidence of juvenile crime -- “a time bomb set to explode” -- and growing opportunities in the international market.

“This industry can grow in bad times as well as good because the crime rate goes up during recessions, and that means jail populations go up as well,” Ruttenbur says. He notes, for example, that rates of robbery, assault and murder increased significantly during the past two recessions, with murder rates climbing by 6.2 percent during the 1981 downturn and 4.3 percent during the recession of 1990-91. All of this adds up to a “strong buy” recommendation from Ruttenbur for the stocks issued by three major private prison companies.

On the other hand, prison disturbances can create real problems for investors. The share price of Esmor Correctional Services Inc stock plunged from $20 to $7 following the 1994 riot at its immigrant detention center in Elizabeth, N.J.

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Ken Silverstein is co-editor of Counterpunch, an investigative newsletter.

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#In These Times, March 17, 1997. pps. 18-19.

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An important and largely overlooked force driving the prison boom in the United States is the National Rifle Association. With a membership of some 3 million, an estimated war chest of $140 million, and paid lobbyists in all 50 states, the NRA has thrown it weight behind so-called “get tough on crime” measures and prison-building initiatives.

In an attempt to change it image from pro-gun to anti-crime, the NRA formed CrimeStrike in 1991 as a division of its lobbying arm, the Institute for Legislative Action. The NRA shifted gears in response to growing popular disgust with the group’s opposition to the Brady Bill and its support for the sale of assault rifles and teflon-coated “cop-killer” bullets. Those campaigns had also drawn attacks from law-enforcement groups that once supported the gun lobby.

“It’s frightening how effective CrimeStrike has been,” says Steven Donziger, editor of The Real War on Crime. By orchestrasting well-funded efforts to lengthen prison sentences and build new prisons, Donzinger says, CrimeStrike has effectively served as a front group for the many constituencies that profit from an expanded crime- control and prison industry.

CrimeStrike logged its first victory in November 1993 when it backed Washington state’s “Three Strikes and You’re Out” initiative, the nation’s first. The NRA provided $50,000 in crucial last-minute financing that enabled the local sponsor, Washington Citizens for Justice to place the initiative on the ballot. “We would have failed without CrimeStrike,” says Dave LaCourse, the group’s director.

That success was rapidly followed by similar victories in California and Virginia, where NRA lobbyists again provided essential money and manpower to “Three Strikes” campaigns. In Virginia and Mississippi, according to CrimeStrike state legislative affairs director Susan Misiora, the NRA was “instrumental” in passing truth-in-sentencing measures, which lengthened average prison sentences.

CrimeStrike has also led the charge to accelerate prison-building programs around the country. In Texas in 1993 and Mississippi in 1994, the NRA lobbied for billion-dollar bond initiatives to fund prison construction. The NRA-backed public ad campaign in Texas led to the construction of an additional 76,000 prison beds in two years. The state has imported prisoners from as far away as Hawaii to fill the cells and has hired 12,000 new prison staff to guard the growing inmate population.

At the federal level, the NRA lobbied hard for the 1994 crime bill, which, among other things, increased the federal funds available to states for building prisons from $3 billion to $10 billion. CrimeStrike executive director Elizabeth Swazey says the frequency with which legislators quoted from NRA literature during congressional debate on the bill illustrates how effective CrimeStrike was.

Swazey calls juvenile justice “one of the most important areas of criminal-justice reform.” CrimeStrike is currently examining juvenile-sentencing laws in all 50 states and lobbying for new measure to have young people sentenced as adults.

The NRA’s embrace of “get tough on crime” rhetoric is paying off. Despite the widespread criticism of the NRA in the early ‘90s, donations to the organization’s legislative fund rose to $18 million in 1993, about double the amount given in 1988, according to Donzinger. “There is a direct link,” he says. “They recognize a business opportunity, and they chose to exploit it.”

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Chris Bryson is a freelance writer based in New York City.

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^In These Times, March 17, 1997. pps. 18-19.

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