Socially responsible democratic enterprises should not be outbid by prison labor

BY AMINE BENALI OF THE LOCAL ENTERPRISE ASSISTANCE FUND (LEAF)

A recent article in the New York Times highlighted an issue that gets little press coverage—the use of taxpayer dollars to procure prison labor for public projects. At Amherst-Pelham Regional High School (ARHS), student journalist Spencer Cliche wrote an expose covering the school’s contract with MassCor, a prison work program, to repair an aging auditorium’s upholstery.

According to Cliche, the school awarded the contract to MassCor in order to secure the lowest possible price for the project. The prison-run project cost is made up almost entirely of administrative, program, and security costs, as incarcerated workers are paid wages of only 14 cents to a dollar an hour, according to the Massachusetts Department of Corrections. In similar industries, like construction, it is customary for public projects to only take into account a contractor’s ability to manage a project and not the cost of wages; in fact, in Massachusetts the “prevailing wage” law requires that workers be paid fair wages regardless of the desire to keep project costs low.

Exactly 50% of inmates’ wages are forcibly diverted to a savings account for use upon their release, leaving prison workers a pittance with which to purchase basic necessities and hygiene products in exchange for their labor. This exploitative practice is hotly debated, with many asserting that the disproportionate number of incarcerated people of color constitutes a “new Jim Crow,” as Michelle Alexander details in her seminal book of the same name.

Cliche, who will attend Vassar College in the fall, discovered that a Springfield-based worker co-op, Wellspring Upholstery Cooperative, had also placed a bid, of which the vast majority was made up of labor costs. Wellspring pays its workers $13 to $25 an hour depending on seniority, and at its inception hired its staff directly from the local Springfield prison. In addition to fair wages, Wellspring offers a year-long training program for its employees so that they can build the skills necessary to succeed in the business, and sets them on a path towards worker-ownership from the get-go. Each worker-owner has an equal vote on company policy and builds equity through a lateral profit-sharing system, allowing them to build wealth over time and recapture the value that their labor has helped to create.

When asked about the ARHS contract, Wellspring co-founders Fred Rose and Emily Kawano said, “Wellspring’s mission is to create a more just economic system through worker cooperatives that provide jobs and create wealth for people with limited opportunities in our economy, including people with CORIs. Paying slave wages to prisoners is unfair to these employees and to companies like Wellspring Upholstery committed to paying living wages. We need a level playing field to protect wage levels and not undermine pay levels in our community.”

The Local Enterprise Assistance Fund (LEAF) is one of only three community development financial institutions in the country with a focus on cooperatives. Our mission is to promote human and economic development by providing financing and development assistance to cooperatives and social purpose ventures that create and save jobs for low-income people. It is hard to find institutions that embody that mission more than the Wellspring Cooperative.

We were lucky enough to have had the opportunity to work with Wellspring in its early stages, and to have provided financing, technical assistance, and business expertise to help the cooperative grow. Wellspring’s Upholstery business is one of three cooperative enterprises in the Wellspring network; they also operate Old Window Workshop, a window restoration business run by women and mothers (which offers flexible hours to accommodate busy schedules), and Wellspring Harvest, which supplies farm-fresh produce to local retailers. It is especially gratifying to see the company land on the right side of an issue that has profound implications for how we treat vulnerable populations in our country.

Democratic values of equality, freedom, and opportunity for all—including low-income people with barriers to employment like previous incarceration—are inherent in the worker cooperative model, in addition to the belief that all workers deserve a living wage and dignified working conditions. Prison labor, on the other hand, takes advantage of a captive workforce and pays next to nothing for the work of their laborers. The two competing bids from Wellspring Upholstery and MassCor put the issue in stark relief, as the school administration has to choose between lower costs and fair treatment of its contracted labor.

At a time when income inequality is at record levels, we need to start thinking intentionally about how we, at a state level and at a community level, intend to do business. Do we want to award public contracts to prison labor, essentially resubsidizing programs we’ve already paid for with our taxes? Or do we want to build a more just economic future that includes, rather than exploits, our most vulnerable populations?

The LEAF team would love to hear your thoughts! You can reach us at info@leaffund.org, or on our website, Facebook, Twitter, or Instagram.

Amine Benali is managing director of development and strategy at the Local Enterprise Assistance Fund (LEAF); he provides technical assistance and business expertise to Boston-area businesses owned by people of color, women, and immigrants, helping them build thriving businesses and close the racial wealth gap.