True story: prison labor increased Texas unemployment rate
By: Dr. Samori Swygert
We often hear about “the prison industrial complex”. Some of us just shrug it off and try our best to avoid being arrested and incarcerated. We inform our children to avoid inappropriate and illegal behavior that would land them in prison.
However, this is only a fraction of what the prison industrial complex encompasses. In fact, you can be the most law abiding citizen and still be affected by this exploitative system.
I want to share a true case study that occurred in the mid 1990’s that I ran across last week. I and a few of my colleagues have been doing some research into this system and managed to excavate this diamond in the rough. Some of you may be familiar with the story if you’re from Texas.
In the mid 1990’s Leonard Hill was the owner of Lockhart Technologies of Austin, Texas. His company produced circuit boards and other system parts for computers and electronics. Enticed by the opportunity and potential to increase revenue, he turned to an alternative form of human resource. That alternative form of human resources was prison labor.
During the 1990’s another private prison group was on the scene. Wackenhut private prisons had established prison operations in Texas. Currently, the company went through new business transitions and is renamed “The Geo Group”. This group maintains prison facilities in North America, the UK, Africa, and Australia. They operate mental institutions, detention centers, immigration facilities, and prisons.
Now back to Leonard Hill and Lockhart Technologies of Austin, Texas.
Leonard made a deal with Wackenhut at the time to have his electronic components manufactured by prison inmates in the Wackenhut facilities for 1 and 2 dollar prison wages. This decision to relocate his operations to prison production relieved him of paying any and all benefits and obligations such as health care, holiday pay, and on the job injuries. He no longer worried about maternity leave, absenteeism, lateness, sick days, vacation, and all the other expenses that an employer has to factor into their payroll budget.
Consequently, when he compared and contrasted the risk benefit analysis in terms of dollars and cents, he fired his 150 employees, and multiplied his revenue stream exponentially.
Let’s do some math
If Leonard Hill was paying his employees $10.00 per hour with a typical 40 hour work week, that translates into $19,200 before taxes. Let’s multiply that by 150 employees. This yields a payroll expense of $2,880,000 annually. By shifting his operations to the private prison labor sector, Leonard Hill pockets almost all of his payroll expenses as income.
So what does this mean? You’ve heard it before, prison is big business. It’s not enough to be the perfect law abiding citizen to be affected by the prison industrial complex. Remember we’re in economic times where the greed and exploitation component of capitalism is in full effect. The exploitation of prison labor can destabilize the job market for law abiding citizens that play by the rules. You may operate within the legal realms of your daily activities, but that doesn’t guarantee that your “safe and comfortable” job will be there tomorrow. Your domestic affairs can be instantly dismantled if your company shares the same philosophy and ideology of Leonard Hill.
This underscores the importance of becoming financially astute even if you don’t have a business degree. This also pleads the case for entrepreneurship and community based business models. These type of endeavors are proactive, and preventive measures to reduce the instability of the job market. Remember employers don’t hire for morality, they hire for money. Can they use your energy, time, and talent to increase their profits at the cheapest pay rate possible?
You can find this story and others like it in the link below.
