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Job shortage? Not for inmates.

Byline: DAVID STEVES The Register-Guard

FROM HIGH-TECH engineers in Hillsboro to lumber workers in Lakeview, Oregonians everywhere are worried they'll join the ranks of the state's 125,000 unemployed.

Despite the economic battering that's left Oregon with the nation's highest jobless rate, one group of workers has remained remarkably sheltered from the storm:


Since November 2000, Oregon has shed 38,000 nonfarm jobs. But inmates continue to work as they did before the recession - in fact the prison system reports adding 511 full-time jobs for inmates since January.

Day in and day out, inmates report to laundry operations and computer-aided map-making work stations behind the walls. On the outside, minimum-security prisoners are transported to lumber mills and cleanup projects in communities from Baker City to Bandon - for a savings of at least 40 percent off the cost of hiring non-incarcerated workers.

But with the state mired in recession, labor leaders, corrections officials and others are beginning to question whether competition for jobs between inmates and law-abiding Oregonians will dampen the public's desire to see prisoners work off their sentences, rather than idle their time away.

"When the economy is good, it's not an issue," Eugene businessman Bill Inge says. "When the economy is bad and it stays bad for a prolonged period of time, it becomes more of an issue."

Inge, general manager of Eugene-based American Linen, knows what it's like to bump up against competition from inmate labor. His company lost its contract to launder garments for Sacred Heart Medical Center when a cheaper bid was accepted from a state prison's laundry program in 1998. The loss of business forced American Linen to lay off 24 workers, Inge says.

Just last week, the issue of inmate labor caused tension in Medford, where trade union members assembled Wednesday to protest Jackson County's decision to hire prisoners, instead of construction workers, to do building demolition and drywall installation.

Economist Art Ayres of the state Employment Department says that despite the growth of Oregon's inmate workforce since the mid-1990s, it's still too small to have a measurable, statewide effect on job availability to non-incarcerated workers.

But critics say the problem isn't just one of prisoners taking law-abiding Oregonians' jobs. It's that it gives employers an alternative to paying higher wages.

"If you make it possible for an employer to operate by paying $4-an-hour wages, how do we maintain wages in the community at a level that we can live on?" asks Lynn-Marie Crider, research and education director for the Oregon AFL-CIO.

Initiative aims at prison labor

The AFL-CIO's concerns that inmate labor threatens the employment and wage growth of Oregon workers has prompted it to draw up a measure for the 2002 ballot. The proposal would dramatically reduce inmate work programs, mandated when voters approved 1994's Measure 17.

The AFL-CIO initiative would prohibit the establishment or expansion of prison work programs that impede:

The private sector's ability to sell goods or services.

The employment of people with developmental disabilities.

Opportunities for law-abiding workers.

This would replace constitutional language added by voters in 1999, when they approved Measure 68. It amended Measure 17 to authorize the corrections director to determine how far to go in curbing inmate work programs to avoid competition with private enterprise and to preserve job opportunities for developmentally disabled workers.

Crider says her labor organization has yet to decide whether it will follow through with a signature drive to qualify the proposed initiative for next November's ballot. She says the proposal came up partly in response to a pending change in the Oregon Administrative Rules to allow private employers, as well as public agencies, to hire inmate work crews.

Prison officials say the pending rule change is meant to bring Corrections Department regulations in line with the authority it's already been given by state law and the constitution. But the labor and prison-reform groups opposing the rule change say it's part of a strategy to more aggressively hire inmates out to private employers.

Reining in convict crews

If anything, corrections officials say, they are beginning to put the brakes on expanded efforts to employ prisoners.

With Oregon in a recession since last spring, the Corrections Department this month began taking into account the economic and unemployment woes among law-abiding residents when determining whether to send work crews out for private-sector jobs.

Debra Slater, administrator of Inmate Work Programs for the Corrections Department, says she is preparing to send a memo to prison superintendents, instructing them on new steps to take before hiring out an inmate work crew to a prospective employer. Slater wants prison officials to ask a set of questions meant to determine whether the business or agency has first given non-incarcerated laborers a crack at the work opportunities.

And this month she and other top corrections officials decided to cancel a long-running arrangement that has supplied as many as 60 inmates a day to work at a pair of Linn County lumber mills, Mid Willamette Precut in Scio and Shaniko Lumber in Lyons.

The reason, Slater says, is `so we don't end up taking work away from folks in the community.

`The picture has changed. We have to change with that.'

As far as inmate work performed within the state's correctional institutions, there is little reason to worry about cheap prison labor taking jobs away from law-abiding Oregonians, says Rob Kilgore, operations manager of Inside Oregon Enterprises, which employs inmates at jobs within correctional institutions.

After working for several private companies, including Willamette Industries and Klamath Falls-based manufacturer Jeld-Wen, Kilgore has worked at Inside Oregon for about a year. He says he's found that despite the cheap costs of inmate labor - about $3 a day unless it involves interstate commerce - it's not enough to undercut the private sector.

He says the costs of corrections officers to supervise inmates is a factor. And it takes more employees because the prison work sites aren't as automated as private-sector locations.

"If you look at our direct labor costs as a percent of revenue, we definitely don't have an advantage," he says. "I actually had better direct labor numbers at some of the factories I managed in the private sector."

Private businesses are partners with or clients of the prison system in some instances - the Portland-based Yoshida Group oversees the Prison Blues apparel operations at Eastern Oregon Correctional Institution in Pendleton, and the commercial laundries at EOCI and Oregon State Penitentiary in Salem have contracts with companies such as Sacred Heart and the McMenamins chain of pubs and inns.

But the bulk of work done by Inside Oregon Enterprises is for government - water-rights mapping for public agencies, office furniture and signs for state agencies, picnic tables for state parks, and security doors and windows for the prisons themselves.

Inside Oregon hasn't been completely insulated from the year's economic turbulence.

A call center at Snake River Correctional Institution in Ontario closed this fall, Kilgore says, because fewer calls were coming into inmates on behalf of a tourism organization. The center couldn't cover expenses after travel spending plummeting in the wake of Sept. 11.

The prison system also shut down a metal fabrication shop at Powder River Correctional Institution in Baker City and a grass seed and nursery farming operations at Mill Creek Correctional Institution near Salem because they were losing money, he said.

Even with such job reductions, inmate employment has been much more stable than the situation on the outside in Oregon. On average, about 6,600 inmates, 81 percent of those eligible for full-time employment, have been working at least 40 hours a week since January. And employment has been steady, no lower than 79 percent, no higher than 83 percent for all work-eligible inmates, according to Oregon Department of Corrections figures.

The up side of inmate labor

Oregon's prisons have put inmates to work since the 19th century, when their labors included making bricks and processing flax. The same philosophical notion behind this historic practice - that inmates should work as hard as the taxpayers who provide for their upkeep - propelled the passage of Measure 17.

The measure, approved by 71 percent of the voters, required all state prison inmates to be engaged in full-time work or on-the-job training.

After several years of struggling to meet that constitutional mandate, corrections officials have expanded the types of jobs available to inmates within prisons and marketed work crews made up of minimum-security inmates to public- and private-sector organizations.

In the 1999-2001 biennium, Oregon inmates put in a combined 1.14 million hours on work crews outside the prisons. That's equivalent to full-time employment for 296 people over that two-year period, according to Department of Corrections records.

Most of the work was done for public-sector employers - state and federal agencies, cities, counties, school districts and port districts. Corrections officials and advocates of the inmate work program contend that with limited public resources, much of this work would not be done at all if not for inmate labor.

Businesses and other private-sector organizations were customers for 22 percent of the work done by inmate work crews. These companies and nonprofit entities hired inmates to perform 254,944 hours of labor in 1999-2001 - equivalent to 66 full-time jobs for two years.

In some cases, the work was done for traditional businesses. The owners of Linn County's Shaniko and Mid Valley Precut lumber hired inmates to do 109,920 hours of work from fall 2000 through September of this year - making it the biggest private employer of inmate work crews over that period.

Other large private employers included the Oregon Food Bank, which employed inmate work crews for 97,856 hours in 1999-2001, and South Coast Hospice, which hired inmates for 14,040 hours over that same time frame.

Private employment has become a staple for inmate work crews in part because the Department of Corrections has aggressively marketed them. Radio ads tout the benefits of hiring an inmate work crew, and eye-catching signs are painted on prison vans, which park along busy highways while inmates cleanup litter or do other work.

It was through the radio ads that a Corvallis property-management company, Brown, Itzen & Williams, learned about inmate work crews. The company hired them last year for 2,880 hours - equivalent to just over 7 weeks for a crew of 10 prisoners - to scrape about a dozen apartment buildings and paint them with primer.

"Cost-wise, it was the cheapest way to go," says Kasha Squires, the company's maintenance supervisor. "We didn't need super-skilled people, we just needed bodies. And that was the best option for us."

In most cases, the Department of Corrections charges $400 for a crew of 10 inmates to work a full day. Based on the department's own assumptions about the cost of private-sector workers, that amounts to a savings of $276 a day - $120 in wages below the minimum wage and $156 in payroll taxes such as workers' compensation, which the department estimates would be 30 percent of wages for non-incarcerated workers.

Of that $400, only a fraction of it, about $30 - or $3 per inmate - goes to workers.

The bulk, $270, pays the wages and benefits of a corrections officer who supervises each work crew. The remaining $100 covers transportation, equipment and clothing, administration and contingency reserves.

Only minimum-security inmates are allowed to serve on outside work crews. In addition, they must meet a minimum of 18 criteria and as many as 23. For instance they cannot have escaped within the previous three years, been sanctioned for misconduct, committed an assault crime within the past five years or be in prison for a number of other violent crimes, including sex offenses and arson.

Views on competition differ

Some private-sector employment agencies have expressed concern about the intrusion of cheap inmate labor into their domain.

"They can get a prison crew much cheaper than we can, putting law-abiding citizens to work," says David Moore, vice president and general manager of Portland-based Instant Labor.

Moore says his company lost out to an inmate work crew on a contract to destroy and dispose of office documents. And Moore says he worries that non-incarcerated workers who are losing their jobs are seeing fewer opportunities to work as temps because of prison work crews. "We're seeing more and more first-time (laid off) employees coming in looking for work. And it's kind of disheartening to turn them away because you're losing accounts to state prisoners," he says.

But others say that despite an unemployment rate that spiked to 7.4 percent last month, they aren't feeling competition from cheaper prison labor.

"We're aware the work crews are out there, but they don't pose a competitive threat to us," says Stacy Burke, spokeswoman for Labor Ready, a Tacoma-based private employment agency. "We may be working side by side, but it's not a competitive thing."

Even the architect of Oregon's inmate work requirements, former legislator and gubernatorial candidate Kevin Mannix, says officials need to ensure that inmates don't take jobs away from law-abiding citizens.

When the economy was robust and employees hard to find, it made sense for inmate crews to help private companies fill work demands, he says.

"And as we head into tight economic times, we should go another direction and use prison work crews to do work that the public sector can't afford to do," such as reforest logged-over public lands, improve salmon habitat, improve parks.

Overall, Mannix says, he thinks corrections officials have "made a good faith effort" to take such an approach.

Slater says that a big reason there are relatively few complaints about competition from prison labor is that most of the crews she oversees work for governmental and community organizations.

But even if prisoners are only marginally competing with law-abiding Oregonians for work, the existence of such competition at all is a problem, says assistant professor Gordon Lafer of the University of Oregon's Labor Education and Research Center.

"Measure 17 passed by a huge margin and I've talked to a lot of people who say they were fooled," says Lafer, who has has studied and written about inmate labor on the state and national levels.

"They wanted inmates to work, but none of them thought they were voting to take jobs away from people on the outside."


Here's a breakdown of jobs provided through Inside Oregon Enterprises, which oversees work sites at several Oregon correctional institutions:

Eastern Oregon Correctional Institution, Pendleton - 80 inmates employed at Prison Blues garment factory and at laundry.

Oregon State Correctional Institution, Salem - 128 inmates employed at engineering Support Unit (computer-aided mapping), call center, mailroom and print shop.

Oregon State Penitentiary, Salem - 347 inmates employed at laundry, furniture and metal shops.

Oregon Women's Correctional Institution, Salem - 47 inmates employed at a call center.

Mill Creek Correctional Institution, Salem - 61 inmates employed at a nursery and grass seed operation. Employment levels expected to drop to 15 as some commercial agriculture activities are curtailed.

Snake River Correctional Institution, Ontario - 111 inmates employed at a sign shop, laundry and call center.- Inside Oregon Enterprises


Here's a breakdown of how inmate work crews were used 1999-2001:


Workload: 1.14 million hours; equivalent to 285 full-time jobs for two years.

Number of clients: 150.

State agencies

Workload: 607,532 hours; equivalent to 152 full-time jobs.

Number of clients: 15

Top employers:

1) Parks and Recreation Department; hours: 283,600; duties: general land maintenance, noxious weed removal.

2) Oregon State Hospital; hours: 104,300; duties: general maintenance.

3) Department of Forestry; hours: 92,600; duties: forestry projects, firefighting support.

Private employers

Workload: 254,944 hours; equivalent to 64 full-time jobs.

Number of clients: 68

Top employers:

1) Oregon Food Bank; hours: 88,088; duties: bagging food, distribution support.

2) Shaniko/Mid Willamette Precut mills; hours: 76,800; duties: low-skill mill work.

3) South Coast Hospice; hours: 13,008; duties: general and land maintenance.

Local governments

Workload: 253,192 hours; equivalent to 63 full-time jobs.

Number of clients: 50

Top employers:

1) Salem Parks & Recreation; hours: 96,080; duties: land maintenance.

2) Port of Portland; hours: 36,560; duties: litter pickup.

3) Port of Bandon; hours: 34,416; duties: general maintenance.

Federal agencies

Workload: 22,640 hours; equivalent to six full-time jobs.

Number of clients: 4

Top employers:

1) Forest Service; hours: 20,320; duties: general and land maintenance, firefighting support.

2) Interior Department; hours: 1,200; duties: litter pickup, land maintenance.

3) Fish & Wildlife Service; hours: 960; duties: land maintenance.

Source: Oregon Department of Corrections, The Register-Guard.


The Oregon State Correctional Institution in Salem. Inmate Frank Brown at the Oregon State Correctional Institution in Salem takes calls for an agency of state government. PAUL CARTER / The Register-Guard Inmate David Lahnala works on a map of Klamath Basin water at the Engineering Support Unit at Oregon State Correctional Institution.
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Title Annotation:As many Oregonians lose work, prisons add inmate jobs; Government
Publication:The Register-Guard (Eugene, OR)
Date:Dec 23, 2001
Previous Article:Scoreboard.
Next Article:Two mills' use of inmates to end soon.

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