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Prison Labor and Private Profit
Wall Street wheeler-dealer Irwin Jacobs, known as "Irv the Liquidator" for his leveraged-buyout exploits in the 1980s, is always looking to turn a profit. One of his current business ventures refurbishes and repackages items that customers have returned to retail stores. When Jacobs looks at the number of prisoners languishing in our nation's rapidly expanding prison system, he sees one thing: cheap labor for his refurbishing business.
Two years ago Jacobs approached prison officials in Minnesota, seeking to negotiate a deal allowing him to set up shop in that state's prisons and hire prisoners as workers. Minnesota decided to let the Liquidator make use of prisonerlabor, provided that Jacobs' company paid for the space, utilities, maintenance of equipment, janitorial services, and security measures needed to run his enterprise. The Liquidator didn't find the terms offered by Minnesota officials sufficiently lucrative, though. He turned them down.
On the make for a better slave-labor deal, Jacobs sniffed around for the one asset most crucial to successful negotiating, a state government that's for sale. Wisconsin's Republican Governor Tommy "All Power to the Highest Bidder" Thompson is well known for his auctioneer-like approach to doling out state contracts. Irv the Liquidator, savvy entrepreneur that he is, knew just what to do. Jacobs donated $20,000 to Thompson's 1994 reelection campaign. Four of Jacobs' business associates gave Thompson an additional $20,000.
Surprise of surprises, Thompson announced in January that Jacobs and the state of Wisconsin reached an agreement in which Jacobs will bring his refurbishing business into Wisconsin prisons and hire prisoner workers. Details of the deal haven't been made public, but the terms Thompson gave Jacobs are apparently more favorable than the terms offered by Minnesota. No doubt Wisconsin taxpayers will end up footing the bill for equipment to help Irv the Liquidator make millions of dollars in private profit.
The ordeal so far is a typical Tommy Thompson government-for-sale scandal. We've seen so many of those in the past eight years that no one here in the Badger state gets too worked up about it. But there's a particularly nefarious element of the prison-labor fiasco that should alarm all working people.
"He's not taking the work away from other workers," Thompson said of Jacobs. "It is work he cannot find workers for." Baloney. If the Liquidator offered to pay employees $15 an hour to do his refurbishing work, job seekers would line up for miles. The only reason Jacobs can't find workers is that he wants to pay minimum wage.
It seems there's big profits to be made in the business of refurbishing returned retail products. Irv the Liquidator wouldn't be in it otherwise. To realize those profits, though, Jacobs must hire employees to do the actual work. If conditions in the labor market are such that the Liquidator can't attract workers for $4.25 an hour, he'll have to raise wages until workers show up. That process is known as the free market, something Republicans like Tommy Thompson and entrepreneurs like Irwin Jacobs claim to worship.
Rising wages are obviously good for workers. And much needed. When adjusted for inflation, the wages of American workers have been declining steadily since 1972. A major cause of this falling standard of living for working people is a long succession of measures taken by large corporations and their conservative benefactors in government to keep wages down. Union busting, failure to establish a meaningful minimum wage, dramatically increased use of temporary and part-time workers, and anti-worker treaties such as NAFTA and GATT all contribute to this trend.
Tommy Thompson and Irv the Liquidator want to take advantage of the vulnerable position of prisoners in order to undercut the market forces that threaten to push wages upward. Remember that we have over a million people in prison in this country. Unless workers and their unions object loud and hard to the phenomenon of allowing private companies to employ inmate labor, working people will soon find themselves competing against the low-wage, forced labor of all those prisoners.
Two years ago Jacobs approached prison officials in Minnesota, seeking to negotiate a deal allowing him to set up shop in that state's prisons and hire prisoners as workers. Minnesota decided to let the Liquidator make use of prisonerlabor, provided that Jacobs' company paid for the space, utilities, maintenance of equipment, janitorial services, and security measures needed to run his enterprise. The Liquidator didn't find the terms offered by Minnesota officials sufficiently lucrative, though. He turned them down.
On the make for a better slave-labor deal, Jacobs sniffed around for the one asset most crucial to successful negotiating, a state government that's for sale. Wisconsin's Republican Governor Tommy "All Power to the Highest Bidder" Thompson is well known for his auctioneer-like approach to doling out state contracts. Irv the Liquidator, savvy entrepreneur that he is, knew just what to do. Jacobs donated $20,000 to Thompson's 1994 reelection campaign. Four of Jacobs' business associates gave Thompson an additional $20,000.
Surprise of surprises, Thompson announced in January that Jacobs and the state of Wisconsin reached an agreement in which Jacobs will bring his refurbishing business into Wisconsin prisons and hire prisoner workers. Details of the deal haven't been made public, but the terms Thompson gave Jacobs are apparently more favorable than the terms offered by Minnesota. No doubt Wisconsin taxpayers will end up footing the bill for equipment to help Irv the Liquidator make millions of dollars in private profit.
The ordeal so far is a typical Tommy Thompson government-for-sale scandal. We've seen so many of those in the past eight years that no one here in the Badger state gets too worked up about it. But there's a particularly nefarious element of the prison-labor fiasco that should alarm all working people.
"He's not taking the work away from other workers," Thompson said of Jacobs. "It is work he cannot find workers for." Baloney. If the Liquidator offered to pay employees $15 an hour to do his refurbishing work, job seekers would line up for miles. The only reason Jacobs can't find workers is that he wants to pay minimum wage.
It seems there's big profits to be made in the business of refurbishing returned retail products. Irv the Liquidator wouldn't be in it otherwise. To realize those profits, though, Jacobs must hire employees to do the actual work. If conditions in the labor market are such that the Liquidator can't attract workers for $4.25 an hour, he'll have to raise wages until workers show up. That process is known as the free market, something Republicans like Tommy Thompson and entrepreneurs like Irwin Jacobs claim to worship.
Rising wages are obviously good for workers. And much needed. When adjusted for inflation, the wages of American workers have been declining steadily since 1972. A major cause of this falling standard of living for working people is a long succession of measures taken by large corporations and their conservative benefactors in government to keep wages down. Union busting, failure to establish a meaningful minimum wage, dramatically increased use of temporary and part-time workers, and anti-worker treaties such as NAFTA and GATT all contribute to this trend.
Tommy Thompson and Irv the Liquidator want to take advantage of the vulnerable position of prisoners in order to undercut the market forces that threaten to push wages upward. Remember that we have over a million people in prison in this country. Unless workers and their unions object loud and hard to the phenomenon of allowing private companies to employ inmate labor, working people will soon find themselves competing against the low-wage, forced labor of all those prisoners.
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