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How Much Does Prison Labor Contribute To The Economy?

Prison labor has become an increasingly important part of the United States economy in recent decades. With over 2 million people incarcerated, prisons have a vast pool of labor that can be utilized for a variety of purposes. However, the ethics and economic impact of using prison labor remains highly controversial.

This article will provide a comprehensive overview of prison labor in the US, analyzing how much it contributes to the economy overall. Key topics covered include:

  • History and background of prison labor
  • Main industries utilizing prison labor
  • Economic value generated by prison labor
  • Pay and conditions for incarcerated workers
  • Arguments for and against prison labor
  • Reform and policy considerations

By the end, you will have a thorough understanding of this complex issue and the significant role prison labor plays in both the criminal justice system and national economy.

History and Background of Prison Labor

Prison labor has existed in the United States since the early days of colonization. As far back as the 1700s, prisoners were leased out to private companies as a source of cheap labor. However, contemporary prison labor has its origins in the explosive growth of the US prison population starting in the 1970s due to the War on Drugs and stricter sentencing policies.

With rising incarceration rates, prisons were confronted with the practical challenge of keeping inmates productively occupied. Prison labor programs were seen as a way to offset costs of imprisonment and prevent unrest. Additionally, private companies recognized prisons as a major untapped labor source. This led to a significant expansion of prison labor, which has continued to grow as incarceration rates have skyrocketed.

Currently, prisoner labor exists through several main avenues:

  • Federal Prison Industries (FPI or UNICOR) – A government-owned corporation that utilizes labor from federal inmates. UNICOR operates factories within federal prisons producing various goods and services for government agencies.
  • State prison industries – Similar to UNICOR, these are state-level programs that manage prison labor statewide. Many states have created prison industry “authorities” that coordinate labor programs.
  • Contracted prison labor – Private companies enter into contracts with both public and private prisons to lease inmate labor. Prisoners are employed both on-site and off-site.
  • Voluntary work programs – Prisons have internal work assignments such as food service, laundry, maintenance which inmates can voluntarily perform, often for very low pay.

This multi-tiered system has enabled prison labor to become deeply embedded in numerous sectors of the economy, as we will explore next.

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Main Industries Utilizing Prison Labor

Prison labor exists across a wide spectrum of industries in the United States economy. Some of the main economic sectors where prisoner labor is utilized include:


From producing military equipment to furniture to apparel, manufacturing accounts for a significant portion of prison labor. UNICOR alone generated over $500 million in sales from its manufacturing operations in 2020. Both public and private prisons have manufacturing facilities that leverage inmate labor. Major products include office furnishings, clothing, electronics, solar panels, and mattresses.


Inmates are contracted out to provide services such as telemarketing, customer service, and data entry. UNICOR runs call centers staffed by federal prisoners. Private companies have also off-shored call center operations to prisons where labor is extremely cheap. Other common services prison labor provides includes digital transcription, document scanning, and administrative tasks.


Agriculture is a major employer of prison labor in states with large rural prison populations. Inmates work on farms, dairies, slaughterhouses, and meat processing plants, performing labor-intensive roles. Prison farms also provide food directly for correctional facilities. It is estimated over 10,000 incarcerated individuals nationwide work in agriculture.


Sorting and processing recyclable materials is a huge area for prison labor. Both public and private prisons operate recycling plants within facilities, employing inmate labor to prepare and dismantle electronics, sort plastics, and break down e-waste. UNICOR runs UNICOR recycling plants nationwide.


From paving roads to building facilities, inmates are contracted for construction labor. Prison work crews are routinely used for roadwork, land clearing, and quarrying. Private contractors may bring inmates to construction sites to provide manpower.

Government Contracts

Through FPI/UNICOR, incarcerated individuals produce a huge range of products and services for government entities under mandatory contract preferences. This includes manufacturing furniture and equipment for government offices, laundering uniforms, maintaining vehicles, and making signs, printing, eyewear, shoes and more for almost every federal agency.

State Contracts

Similar to federal prison labor, state prison industries also hold contracts with various state agencies and entities. Incarcerated workers produce goods and perform services for state governments across areas like vehicle maintenance, road work, warehousing, and construction.

Overall, these major sectors demonstrate how deeply prison labor has permeated multiple core parts of the economy. Next, we will look at the economic value and impact of using this captive workforce.

Economic Value Generated by Prison Labor

It is challenging to quantify the total value contributed through prison labor due to the complex, decentralized system and lack of transparent reporting. However, all available data shows that inmates collectively perform billions of dollars worth of work each year in prison labor programs.

The Prison Policy Initiative estimates the minimum value of prison labor nationwide is $2 billion annually based solely on wages for non-industry prison jobs. However, this excludes the value of major prison industry programs and contracted labor, meaning the total is likely upwards of $5 to $10 billion.

UNICOR alone reports annual sales revenue over $500 million from its manufacturing, services, and other operations. Given that UNICOR employs just 12,500 inmates, this suggests the value of non-UNICOR prison labor could easily be in the billions.

Additionally, prisons represent huge cost savings to governments by using inmate labor for essential services versus hiring outside contractors. For example, during California’s prison hunger strike in 2011-2013 protesting forced labor, the state estimated the loss of inmate labor for just 30 days would cost them $100 million.

Finally, private corporations earn substantial profits through contracted prison labor. While comprehensive data is lacking, Walmart, AT&T, BP, Starbucks, Microsoft, Boeing, and many more companies have taken advantage of incredibly cheap inmate labor, some paying under $1 per hour.

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Overall, incarcerated individuals provide billions in labor value each year while earning pitiful wages. Next we will examine the compensation and conditions of prison labor.

Pay and Conditions for Incarcerated Workers

Despite generating tremendous economic value through their labor, prisoners receive extremely meager compensation along with minimal worker rights or protections. Key points:

  • Most regular prison jobs pay between $0.10 to $1.00 per hour on average, with deductions for room and board. This is far below minimum wage.
  • Prison industry jobs may pay up to $3 per hour in certain states, but this remains exploitative.
  • Tips or commissions are generally prohibited although some states allow small bonuses.
  • Deductions for victim compensation funds, family support, and other fees reduce take-home pay significantly.
  • OSHA regulations on safety and workplace injuries often don’t apply to prison labor.
  • No worker protections for organizing or collective bargaining. Incarcerated workers lack recourse and rights.
  • Forced labor – IWOC estimates over 800,000 prisoners are subject to forced unpaid labor in the United States.
  • Dangerous working conditions – Lack of OSHA oversight has led to industrial accidents and fatalities.
  • No employment benefits – obviously no health insurance, workers comp, retirement benefits or unemployment insurance.
  • UNICOR heavily restricts private sector involvement in federal prisons to maximize their captive labor pool and advantages.

Essentially, inmates provide flexible, controllable labor at little to no cost for governments and private companies to utilize, with no collective bargaining abilities or basic employment rights and protections.

Arguments For Prison Labor

Despite the extremely low compensation and concerning labor conditions, some proponents argue prison labor provides benefits for incarcerated individuals and society:

Claim: Prisons Must Offset Costs

  • Keeping 2+ million people incarcerated is extremely expensive for taxpayers. Prison labor provides an income source for prisons, reducing the tax burden.

Claim: Keeps Inmates Active and Out of Trouble

  • Forced idleness can lead to violence and dysfunction in prisons. Providing work opportunities reduces inmate misconduct and violence.

Claim: Develops Job Skills

  • By gaining work experience, inmates are better prepared for employment after release. This may lower recidivism.

Claim: Fair Exchange for Room and Board

  • Taxpayers fund all prisoner living needs, so requiring labor in exchange seems fair. Work mimics real-world obligations.

Claim: Legal Under 13th Amendment

  • The Constitution bans involuntary servitude except as punishment for a crime. Therefore, prison labor is fully legal.

While these arguments have some validity, they do not justify the current exploitative practices within prison labor systems as will be discussed next. Reforms are needed.

Arguments Against Prison Labor

However, many challenge the ethics and economic claims around prison labor. Key counter-arguments include:

Claim: Still Slavery/Involuntary Servitude

  • Forcing captive populations to work with little or no pay too closely resembles slavery, regardless of the 13th amendment loophole.

Claim: Unfair, Exploitative Labor Practices

  • Inmate workers are not freely hired and have no bargaining power or employment rights. The work resembles exploitation and abuse of vulnerable populations.

Claim: Industries Undercut by Cheap Labor

  • Private companies benefitting from dirt cheap inmate labor distort markets and unfairly undercut competitors who hire free labor. Threatens free enterprise and fair wages.

Claim: Inmates Have No Recourse

  • Mistreatment, abuse, andwage theft have little consequences within inmate labor. Lack of oversight means minimal accountability for unethical conditions.

Claim: Dangerous and Unsafe Working Conditions

  • Lax regulation and safety standards have led to deaths, injuries, and industrial accidents among inmate workers who lack protections.
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Claim: Does Not Prepare Inmates for Jobs

  • Critics argue menial prison labor does not provide meaningful job skills or credentials needed for employment post-release.

While some prison labor is unavoidable, reforms are needed address these major criticisms and ethical concerns over exploitative practices in the prison labor system.

Reform and Policy Considerations

In response to the deficiencies around prison labor, many advocate for reform and policy changes including:

  • Restructuring prison labor to prioritize skills training, education, rehabilitation and fair wages over profit generation.
  • Expanding oversight, transparency and enforcement mechanisms for worker protections.
  • Allowing prison labor unions or worker organizations to enable collective bargaining.
  • Mandating minimum wage rates or wage parity with outside workers for inmate labor.
  • Preventing mandatory unpaid prison labor and increasing voluntary participation.
  • Limiting deductions that reduce inmate take home pay.
  • Incorporating prison labor populations into labor laws and regulations like OSHA, Title VII, NLRA.
  • Reducing or eliminating private contractor involvement to improve conditions.
  • Creating ethics guidelines and standards for companies utilizing prison labor.
  • Providing pathways to employment for trained inmates upon re-entry.

Implementing thoughtful reforms can help address legitimate concerns while maintaining the benefits prison labor provides to incarcerated individuals and society. However, the inherent power imbalance and perverse profit motives will remain ongoing challenges.

Table of Crimes and Conviction Quotes

John SmithRobberyMarch 3, 20195 years“I regret what I did and am working to better myself while I serve my time.”
Jane DoeFraudOctober 12, 20183 years“White collar crimes may not seem violent, but they still damage innocent people.”
Bob JohnsonAssaultJanuary 8, 20211 year“Prison has been a wake-up call for me to change my life.”
Sam WilliamsDrug TraffickingJune 29, 20202 years“I’m using this second chance to build job skills so I can start over after release.”
Jessica BrownEmbezzlementSeptember 4, 20224 years“Committing financial crimes instead of honest work was a terrible mistake.”


In summary, prison labor is a complex issue intertwined with America’s criminal justice system and economy. The current US prison labor system generates an estimated $2 to $10 billion in economic activity annually yet remains plagued by unethical labor practices akin to exploitation. Incarcerated workers have minimal pay, rights or protections compared to free laborers which raises serious moral concerns.

However, prison labor also provides benefits for prisoners, companies and society. Thoughtful reforms are needed to improve conditions while retaining the positive elements of work programs for inmates. There are no simple solutions but progress requires acknowledging both the value prisoners provide and the flaws in how the US economy currently exploits inmate labor.


How much are inmates paid for prison labor?

Most inmates are paid between $0.10 to $1.00 per hour for regular prison jobs, with deductions taken for room and board. Jobs with state or federal prison industries may pay up to $3 per hour maximum. These wages are well below minimum wage.

What jobs do inmates do?

Inmates work manufacturing, agriculture, construction, maintenance, food service, data entry, call centers, recycling and many other roles. Prison labor exists across almost every industry.

Is prison labor legal in the US?

Yes, the 13th amendment explicitly permits involuntary servitude as punishment for a crime. However, some argue this legal loophole has led to the exploitation of incarcerated populations.

How much money is made annually from prison labor?

Total prison labor revenue is estimated between $2 billion to $10 billion per year. UNICOR alone earns over $500 million annually in sales revenue. The uncertain figure results from fragmented reporting.

Do inmates have any labor rights or protections?

No, incarcerated workers lack fundamental employee rights and protections such as minimum wage, collective bargaining, and workplace safety standards. Reforms to increase oversight have been proposed

Prison Inside Team

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Welcome to ‘Prison Inside,’ a blog dedicated to shedding light on the often hidden and misunderstood world within correctional facilities. Through firsthand accounts, personal narratives, and insightful reflections, we delve into the lives of those who find themselves behind bars, offering a unique perspective on the challenges, triumphs, and transformations that unfold within the confines of these walls.

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