Two mills' use of inmates to end soon.

Byline: DAVID STEVES The Register-Guard

SCIO - Most mornings a small fleet of vans carry inmates across the Linn County line, delivering them to a pair of mills where they help transform raw lumber into garden stakes, lath and other finished products.

In a county that's lost more than 1,000 jobs in four years, the use of inmates to do work that might otherwise go to law-abiding local residents has been the talk of the town.

"They're taking jobs away from the community and a lot of people are upset. This is a poor community that needs jobs," says Marguerite Totten. The local businesswoman is one of the early-afternoon costumers at the Lumber Lounge, a smoky, low-ceilinged roadhouse across the street from Scio's Mid Willamette Precut mill.

Fellow patron Robert Adams says he's not bothered by the mill's use of cheap prison labor.

The lumber operation has the reputation of a business operating on a thin margin.

Bringing in low-cost inmates may seem unfriendly to local workers, he says, until you consider what their presence means to the more than 100 non-incarcerated employees who draw a paycheck at the mill.

"That mill would go under if they didn't have inmates working there," says Adams, a local farmer.

The exchange between Adams and Totten on a damp November afternoon encapsulated the debate over how far the Oregon Department of Corrections and private businesses should go in putting prisoners to work.

The Mid Willamette Precut mill in Scio and Shaniko mill in Lyons, both under the same ownership, have drawn the greatest scrutiny - culminating in the termination of their contract to use inmate work crews - because they have taken far greater advantage of prison labor than other for-profit businesses.

Between the fall of 2000 and the fall of 2001, the two mills have put inmates to work for 104,800 hours - equivalent to year-round, full-time work for 50 people - according to Corrections Department records.

Since mid-1999, the other 71 private-sector entities that employ inmates have racked up an average of seven weeks of work for a crew of 10 prisoners.

The Mid Willamette Precut and Shaniko mills turned to inmate workers only after failing to attract and retain employees from the area, company spokeswoman Denece Messenger said.

She said the mills' management tried to go through private employment agencies but was dissatisfied with the quality of workers and their willingness to stick with the work.

The mills concluded that the most satisfactory place to find workers was in prisons.

"The inmates have worked out so beautifully," Messenger said. "They're reliable and they're drug free and they're motivated."

Another advantage of inmate labor is that it's cheap.

It costs $400 a day for a crew of 10 workers - a savings of $466,000 off the cost of minimum wage plus 30 percent payroll taxes over a year's time for the 104,600 hours of inmate labor at the two mills.

The savings are far greater - between $600,000 and $940,000 - when inmate costs are compared with the actual wages for jobs comparable to those at the two Linn County mills.

According to Oregon Employment Department statistics for the region of Linn, Benton and Lincoln counties, hourly wages range from $7.50 for hand material movers to $10 for sawing machine operators.

Messenger said that despite her company's satisfaction with inmate labor, it has been diligently seeking to hire non-offenders for those jobs.

She said the company posts signs at grocery store bulletin boards and other locations in Scio, has "spent thousands of dollars in newspaper ads," and has relied on word of mouth.

But on the same November day that Messenger was interviewed, not a single one of Scio's public bulletin boards contained a help-wanted notice for that town's Mid Willamette Precut mill.

It is not possible to determine whether the two mills have been seeking workers through the state Employment Department because confidentiality rules prevent agency employees from identifying employers that place "job orders."

Jon Carey, a human resources director with Frank Lumber in the Santiam Canyon community of Mill City, said it's no mystery why the Shaniko and Mid Willamette mills came to rely on inmate labor after failing to find workers for the $6.50 hourly starting wage they offer.

"What they've done is find a substitute for less than the cost of minimum wage," said Carey, whose mill pays a starting wage of $9.50 an hour. "They've found a way to use extremely cheap labor - no workers' comp, nothing,"

Carey said his experience as a personnel administrator in the wood-products industry contradicts assertions by the Shaniko and Mid Willamette Precut mills that they can't find workers.

"They claim there's just nobody in the area applying for work? Well I don't have a problem getting applications," said Carey, who stopped accepting applications three months ago because job seekers by far outnumbered the few openings at his mill.

Carey, interviewed Thursday, made similar comments last July during a public hearing on the two mills' use of inmate labor.

The forum, conducted by the Linn County Board of Commissioners, allowed the two mills' management and other backers, along with inmate-labor critics, to make their cases.

Department of Corrections officials decided to maintain the daily use of as many as 60 inmates by the two mills.

But in the ensuing five months - which have seen Oregon unemployment rates spike to the highest in the country - corrections officials took another look and decided to cut off the flow of inmate work crews to the mill.

The department served notice in early December that they were terminating the labor contract with the two mills effective Jan. 1, said Debra Slater, administrator of the department's Inmate Work Programs.

"We've got an economy like this going down the tube, and our workers in there are potentially blocking the way for folks to apply for positions to get in there," Slater said. "It's not our intention to displace workers."

CAPTION(S):

Officer David Leas, a guard at Oregon State Correctional Institution, the medium security men's prison in Salem, patrols one of the prison's housing units.