But the attractions of prison labor extend well beyond low wages. The prison labor system does away with statutory protections that progressives and unions have fought so hard to achieve over the last 100 years. Companies that use prison labor create islands of time in which, in terms of labor relations at least, it's still the late nineteenth century. Prison employers pay no health insurance, no unemployment insurance, no vacation time or sick leave. Prison workers can be hired, fired or reassigned at will.
Prison labor is the ultimate flexible and disciplined workforce.
All of these conditions apply when the state administers the prison. But the prospect of such windfall profits from prison labor has also fueled a boom in the private prison industry. Such respected money managers as Allstate, Merrill Lynch and Shearson Lehman have all invested in private prisons. As with other privatized public services, companies that operate private prisons aim to make money by operating corrections facilities for less than what the state pays them. These developments affect not only prisoners, but also workers outside of prison trying to make a decent living.