You Can’t Compete With A Hidden U.S. Labor Market That Makes Less Than $0.45 An Hour

3 min read

How The United States Created The Cheapest Labor Force

In an era defined by globalization, businesses traverse continents in search of the most cost-effective labor. From the bustling factories of Vietnam to the sweatshops of Bangladesh, the quest for affordable labor has led to a surge in outsourcing. Yet, paradoxically, within the borders of the United States, a nation often criticized for exporting jobs, lies the world’s most economical labor force: the prison labor system.

The Economics of Prison Labor

The U.S., with its unparalleled incarceration rate, is home to over 2 million inmates. Of these, an estimated 1 million are engaged in labor, often for wages that pale in comparison to the federal minimum wage. The Federal Prison Industries (FPI), also known as UNICOR, employs these inmates across a spectrum of industries.

When compared to average wages in countries like Vietnam ($2.10/hour) and Bangladesh ($0.68/hour), it becomes evident: U.S. prison labor is an unrivaled competitor.

The Global Impact and Big Investors

This ultra-affordable labor force has repercussions that echo globally. By leveraging prison labor, the U.S. can manufacture goods at a fraction of the cost, undercutting even the most affordable international labor pools. This not only impacts the global market but also has significant domestic implications.

However, the prison labor system isn’t just a tool for manufacturing. It’s a lucrative investment opportunity. Financial giants like Blackrock and Vanguard have emerged as the most significant investors in private prisons, highlighting the commercial interests intertwined with the incarceration system.

You Can’t Compete With What You Don’t See

The insidious nature of the prison labor system is its invisibility. Many products crafted by inmates don’t end up in local stores but are directed toward government and business-to-business transactions. This covert supply chain ensures consistent demand for prison-made goods, keeping the public in the dark.

Georgia Congressmember Nikema Williams emphasized the need to confront this issue. “Our constitution has an exception for slavery, and our history is marked with racism and white supremacy. Eliminating the loophole in the 13th Amendment is a step forward.”

Jorge Renaud, with firsthand experience, stated, “American prisons are run by incarcerated labor. Everything, from maintenance to cooking, is done by incarcerated individuals who, in five states, aren’t compensated for their labor.”

The Ethical Dilemma

The prison labor system presents a moral conundrum. While it might equip inmates with skills, it’s also a system of exploitation. The racial and socio-economic disparities in the U.S. prison system mean marginalized communities are most exploited, perpetuating a cycle of disadvantage.

Commercial Interest

With its vast workforce and minimal wages, the U.S. prison labor system profoundly impacts both global and domestic labor markets. The involvement of financial behemoths like Blackrock and Vanguard underscores the commercial interests at play. Awareness is the first step towards transparency, reform, and a more equitable system.

Armand Lucas

I write for Millennial Entrepreneur as a serial entrepreneur myself in several ventures. My goal in writing is to teach new and established entrepreneurs that life is not about becoming rich; it's about creating the time and space to enrich one's life.

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