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Public Contract Law Journal

Public Contract Law Journal Vol. 50, No. 2

Protecting People and Benefiting Business: Why Prison Labor Should Be Subject to the Provisions of the Service Contract Act

Rebecca Fallk


  • Discusses how prison labor currently operates and how current sub-minimum wage payment practices provide too little compensation for prisoners to be able to afford basic provisions during incarceration
  • Examines the purpose of the Service Contract Act and argues that prisoners, private businesses, and the government procurement system as a whole would benefit from paying prison laborers in accordance with the prevailing wage rate
  • Addresses anticipated counterarguments focusing on ensuring prison profitability, whether such an approach would provide adequate compensation to prisoners, and the approach's popularity with the public
Protecting People and Benefiting Business: Why Prison Labor Should Be Subject to the Provisions of the Service Contract Act
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Despite working while incarcerated, prison inmates are not able to afford basic necessities during the period of their incarceration. This Note will demonstrate how the Service Contract Act (SCA) provides a solution to this problem. In order to do so, this Note will begin by describing how prison labor presently works and how the payment currently afforded to inmates detrimentally impacts them by making it so that they cannot afford necessities. Next, this Note will provide the rationale behind the enactment of the SCA and will demonstrate how its principles can be applied to prison labor. This Note will then explain how paying inmates the wages required under the SCA can feasibly be used to benefit not only inmates, but also private businesses and government procurement. Finally, this Note will conclude by addressing counterarguments regarding the feasibility of using the SCA to govern prison labor.

I. Introduction

Coral Martin, an incarcerated woman, soaked through her sanitary pads and ended up sitting in her own menstrual blood, “feel[ing] like an animal.” Unfortunately, many women have similar stories and go through the same suffering. Prisoners cannot afford basic prison necessities because they are paid only a fraction of federal minimum wage for their labor while incarcerated. Adrienne Kitcheyan, a formerly incarcerated individual, explained that incarcerated women are punished when they bleed onto their uniforms, and have to pay for extra pads unless they get a doctor’s note, which “cost[s four dollars] to schedule an appointment.” Kitcheyan argued that making nine cents an hour after tax really made her think about whether she wanted to put her whole month’s income into an appointment to “hopefully be[] approved for extra pads.” Other women had gotten “toxic shock syndrome in prison after using toilet paper as a makeshift tampon” as a last resort for basic hygiene and to avoid charges for soiling their clothes.

Women with periods are not the only group of people who suffer from financial dilemmas as a result of low wages. Any prisoner who wishes to call home to a loved one similarly suffers immensely from the up-charge for prison phone calls. Private phone companies such as Securus “charge[] $3.16 for the first minute and [sixteen] cents for each additional minute” of a phone call, meaning a singular ten-minute phone call can cost $4.76. If the call is disconnected, as it often is, that adds another $3.16. These charges present a catch-22 situation for prisoners who need to make phone calls in order to stay in contact with family, all the while paying money to request more money for their calls. For an incarcerated mother, this means deciding between bleeding through her clothing or spending time on the phone with her child.

Prisons are able to treat women in this way because of a constitutional loophole. The Thirteenth Amendment to the United States Constitution contains an exception that can be interpreted as permitting the enslavement of criminals. Namely, it allows for slavery to be used as a “punishment for crime” when one has been “duly convicted.” The federal government arguably exploits this provision through the allowance of prison labor in exchange for such low wages that prison workers are essentially treated as slaves. This interpretation of the Thirteenth Amendment has caused suffering and embarrassment to countless individuals.

However, a pre–existing federal law could alleviate that suffering and ensure that prisoners are not subject to servitude. The McNamara-O’Hara Service Contract Act of 1965 (SCA) requires that any employee performing any government contract work under a service contract exceeding $2,500 must be paid no less than the monetary wages “in accordance with prevailing rates in the locality, or, where a collective-bargaining agreement covers the service employees, in accordance with the rates provided for in the agreement.” If no wage determination is included in the contract, or if the contract is worth less than $2,500, employees must not be paid less than the federal minimum wage established in the Fair Labor Standards Act of 1938.

“Congress adopted the [SCA] with the . . . purpose of preventing the exploitation of the ‘poorest’ and ‘most marginal workers’” in the United States, namely “service employees who performed” tasks such as laundry, kitchen work, and janitorial work. However, the SCA as it stands does not extend to protect inmates working in federal prisons. These workers perform tasks including, but not limited to, cleaning the prison grounds, staffing the prison kitchens, and running the laundry facilities. Yet, they are not protected by a federal statute meant specifically to prevent their exploitation as workers who are providing services to a prison’s government contractors.

Prisoners in federal facilities should be paid wages in accordance with the SCA for any labor they perform while incarcerated in order to be able to afford prison necessities including women’s sanitary products and telephone calls. In order to ensure that prisoners are paid a living wage, the SCA should be amended to require federal prisoners be paid a minimum wage in accordance with the rest of the SCA. Under this revised law, prisoners would be able to afford basic necessities based on their labor.

Part II of this Note will begin by explaining how current wages do not allow prisoners to afford basic necessities, such as menstrual products or phone calls. It will further demonstrate how UNICOR operates. UNICOR is the trade name for Federal Prison Industries and it is the correctional program that is in place to manage and pay inmates for their labor. UNICOR will then be compared to the Prison Industry Enhancement Certificate Program (PIECP), which is a federal program that engages a select number of prison workers in private sector jobs that pay at least federal minimum wage. Next, Part III of this Note will explain the purposes of the SCA and how UNICOR, as it stands, contradicts the policies set forth in the statute. It will further clarify how increasing wages according to the SCA can be utilized to benefit prisoners, private businesses, and the government procurement system alike. Finally, Part IV of this Note will prove that applying the SCA to inmate labor is a practical goal, despite arguments to the contrary.

II. Background

This Part introduces the predicament of prisoners who are paid less than the minimum wage. It further demonstrates how UNICOR perpetuates this inequity, while PIECP serves as an example of an alternative program that manages to operate successfully while still paying inmate employees a salary of minimum wage or higher.

A. Current Prison Wages Do Not Allow Inmates to Afford Basic Provisions During Incarceration.

Prisoners completing maintenance work can earn an average of between $0.14 and $0.63 per hour. Prisoners completing other types of work receive between $0.23 and $1.15 per hour. Based on the maintenance rates, if a person works a forty-hour week, that person would earn between $5.60–$25.20 per week. To put this into perspective, an average woman needs twenty tampons per month to avoid clothing stains. At approximately $2.78 each in federal prison, women must spend about $55.60 per month of their salary on tampons, not including the costs of underwear liners or any other necessary period-related items. A woman spending $55.60 of her $22.40–$100.80 per month salary on tampons is equivalent to a woman making $150,000 per year having to spend between $82,000–$372,000 of her yearly salary on menstrual products. If a woman wants the chance to plead her case for extra pads or tampons to a doctor in order to get more than the allotted free amount, she must pay four dollars to see a doctor—she must pay to make a case that she deserves access to sanitary products. These costs ensure that women cannot afford their period on prison wages. This presents another type of catch-22 situation for prisoners who must either pay fees that they cannot afford in order to obtain tampons, or risk getting an additional charge for soiling their garments beyond their control because they could not afford tampons to begin with.

While prisons are making money by up-charging for these basic necessities, the prisoners cannot afford these costs in large part because they are not receiving adequate compensation for the work that they do in prison. The exorbitant price of menstrual products alone, at $55.60 per month or about $13.90 per week, leaves those incarcerated with little to no money for other prison necessities. Similarly, if an inmate wants to call a loved one for even an hour per week, it would cost $12.60. With inmates completing maintenance work make between $5.60–$25.20 per week, even inmates who are employed full-time cannot possibly afford menstrual products or phone calls (especially not both), in addition to other commissary items such as clothing and hygiene products like toothbrushes, toothpaste, and shampoo. Incarcerated persons are left with a near impossible choice of deciding between accruing more fines for bleeding into clothes, calling loved ones, or affording hygiene products.

Relying on families to pay these costs is not often a viable alternative for incarcerated persons, because many families cannot afford to pay their loved ones’ prison expenses; those that try end up with “large sums of debt” when they attempt to do so. The costs of “maintaining contact with incarcerated family members,” namely the costs associated with phone calls and visits alone, “led more than one in three families [thirty-four percent], into debt.”

B. UNICOR and PIECP: Corrections Programs Tasked with Managing Inmate Labor

Two main programs are in place to manage prison labor. The first, UNICOR, is a corrections program that manages inmate labor and is responsible for budgeting the salaries of the individuals working while incarcerated. The second is PIECP, an alternative program to UNICOR that pays inmate employees the prevailing wage. This Section will address these programs in turn.


UNICOR is the trade name for the U.S. Federal Prison Industries’ (FPI) correction program, which was established in 1934. UNICOR’s mission is to “protect society and reduce crime by preparing inmates with job training and practical work skills for reentry success.” To do this, the program uses federal inmate labor to manufacture a range of products, including clothing, textiles, electronics, and office furniture to sell to federal agencies. Additionally, UNICOR provides recycling services, data services, and printing services to its federal customers. UNICOR has seventy-four factory locations nationwide, and fifty-three active locations operating in prison facilities as of September 2019.

FPI “derives over [fifty percent] of its sales from the [U.S.] Department of Defense.” However, it also sells its products to other federal government agencies, including the U.S. Department of Agriculture, U.S. Department of Homeland Security, U.S. Department of Justice, U.S. General Services Administration, and the U.S. Postal Service. The Consolidated and Further Continuing Appropriations Act of 2012 provided UNICOR with the additional capability to work with private sector companies in order to “manufacture and sell products in the commercial market,” so long as “certain eligibility requirements are met.”

About eight percent of work-eligible inmates participate in the UNICOR program, which equates to about 12,278 workers as of 2015. To qualify for a job that is above an entry-level minimum wage position, an inmate must have a high school diploma or GED. According to the Bureau of Prisons (BOP), that is the only requirement for work assignments above entry level. The program sees high demand; while UNICOR employed almost 17,000 inmates in 2017, 25,000 inmates were on UNICOR’s waiting list. UNICOR’s annual report stresses a core mission of “protect[ing] society and reduc[ing] crime by preparing inmates for successful reentry through job training.” FPI claims that UNICOR does this by providing inmates with work opportunities involving industrial work and services. FPI’s model involves occupying inmates by giving them jobs, while simultaneously easing tension and helping individuals avoid dangerous situations.

UNICOR’s post–release employment goal is for thirty percent of inmates working in UNICOR to be employed within three years of release, which FPI claims will benefit those susceptible to recidivism while also providing a reasonable turnover rate for “operational effectiveness” in the prison. Although the ability to be employed within three years of release is not a requirement to qualify for the UNICOR program, UNICOR balances the number of inmates closer to release so that their recidivism reduction benefits are utilized. By giving inmates a work ethic and skills that they may not otherwise have, UNICOR plans to decrease the likelihood of recidivism after exiting custody. However, none of the goals listed in UNICOR’s 2017 Annual Report mention inmates’ salaries for their work while in prison.

“FPI operates as a revolving fund and does not receive an annual appropriation.” Thus, FPI derives a majority of its revenues “from the sale of products and services.” FPI is self-sustaining because operating expenses are applied against revenues; this results in either an operating income or loss, which is then reapplied toward operating costs for future production. FPI has recently increased its earnings, and had a five-year plan to grow sales by eight percent in 2018 and five percent per year thereafter, ultimately to reach $25 million in earnings by 2019. Inmates receive approximately four percent of UNICOR’s sales revenue. Simultaneously, about seventy-eight percent of UNICOR’s revenue is spent buying raw materials, supplies, and equipment from the private sector. UNICOR employed almost 17,000 inmates and sold $453.8 million in goods in fiscal year 2017. Inmates working for UNICOR earned an average annual salary of $1,645; while UNICOR is earning millions of dollars in revenue, inmates are earning little for their labor.


UNICOR can be compared to PIECP, which is a federal government program created under the Crime Control Act of 1990 that engages about 5,000 prison workers in private sector jobs that pay minimum wage or higher. While UNICOR uses inmate labor to manufacture a range of products to sell to federal agencies, PIECP contracts with outside companies, typically small and medium-sized privately owned businesses that often serve as suppliers to larger companies. PIECP allows private companies to establish “joint ventures” with state and local corrections facilities “to produce goods using inmate labor.”

The two primary objectives of PIECP are to enable inmates to contribute to society, in part by offsetting the costs associated with their incarceration, and to increase the possibility of successful transition back into society upon release. These “contributions to society” come in the form of wage deductions that corrections departments may opt to take out from paychecks afforded to inmate workers. Deductions are limited to money used to pay for taxes, room and board, family support, and victim compensation.

Qualifications for PIECP vary by correctional institution, but may include the absence of a disciplinary record, low security level, enrollment in or completion of a high school diploma or GED, and a minimum amount of time remaining on a prison sentence. The work provided by PIECP inmates ranges from “labor intensive routine tasks ([e.g.] assembly line)” to craftmanship tasks (e.g. metal welding). PIECP workers must be paid a “prevailing wage,” for their work, which is the amount “a non–incarcerated worker would make for the same job in the same region.” This “prevailing wage” is the same standard used by the SCA, which requires that any employee performing any government contract work under a covered contract must be paid no less than the monetary wages “in accordance with prevailing rates in the locality.” Because they are paid prevailing wages, PIECP participants obtain employment at a faster rate after release than other prisoners.

Despite these benefits, PIECP has its own set of problems. For instance, PIECP has been allowing “government purchasers” to “re–sell products made through the PIECP program without” fully “informing buyers” that the goods are made by prison inmates. PIECP also leaves workers with little funding despite their higher wages because taxes, victims’ compensation fees, payments for room and board in prison, and fees for alimony and child support are all taken out of their earnings. “[P]arties other than the inmates themselves are the first beneficiaries of PIECP incomes,” with thirty percent of their wages “returned in the form of [taxes]” through room and board payments, eleven percent of their wages going “to Social Security and Medicare, and [eight] percent going to victims of crime.” While a minimum-wage payment would not solve all issues related to poverty of inmate workers, PIECP proves that it is possible for a UNICOR company to pay prison laborers the minimum wage without putting prisons in dire financial straits.

III. Analysis

The SCA, implemented to protect low wage laborers, provides a useful model to assess UNICOR’s prison labor system. The first Section will examine the purpose of the SCA. The second section will demonstrate that prisoners, private businesses, and the government procurement system as a whole would benefit from paying prison laborers in accordance with the prevailing wage rate.

A. The Purpose of the SCA Is to Safeguard Underpaid Workers, While Simultaneously Protecting Contractors from Unfair Business Practices Stemming from Low-Wage Labor.

The purpose of the SCA to “prevent[] the exploitation of the ‘poorest’ and ‘most marginal’ workers in America” is not fulfilled if it does not protect the “most underpaid members of the labor force.” From a contracting perspective, the SCA ensures contractor employees are receiving wage increases and not lower salaries because of a fear that new contractors could underbid existing contractors. Before the SCA, many “employees were forced to take pay cuts” in order “to keep their jobs.” The Solicitor of Labor at the time, Charles Donahue, stated that the federal government’s money should not be used to “finance contracts which undercut and depress the wage rate prevailing in a locality or upon which undesirable working conditions obtain.” The SCA was further amended in 1976 to specify “that all service employees were covered by the Act.” The Department of Labor later defined a “Service Employee” as “any person engaged in the performance of a service contract other than any person employed in a bona fide executive, administrative, or professional capacity.”

1. The SCA Was Enacted in Order to Protect the Most Underpaid Members of the Labor Force: Blue-Collar Workers.

This principle that the SCA must “prevent[] the exploitation of the ‘poorest’ and ‘most marginal’ workers in America” is directly applicable to the situation federal prison laborers face. The SCA was designed to make sure contractors were not working hand in hand with procurement agencies to exploit underpaid laborers. In his testimony, Solicitor Donahue stated that the bill should apply to service or blue-collar employees, including workers who provide janitorial services and maintenance services under federal government contracts.

The SCA is designed to protect the work that prisoners do, namely blue-collar work and janitorial services. Therefore, exempting prison labor disrupts the leading purpose behind the SCA’s enactment—protecting the “most underpaid members of the labor force.” Because inmates provide services such as food services, janitorial services, and laundry services within prisons, subjecting inmate laborers to the SCA’s protections would fulfill the purpose of the SCA.

2. The SCA Is Committed to Ensuring That the Federal Government’s Funds Are Not Being Used to Depress the Prevailing Wage Rate.

The SCA is meant to prevent workers who provide services to government agencies from being exploited. Prisoners are providing services to the government both directly and indirectly. Directly, the inmate labor offered through UNICOR provides products and services to government agencies. Prisoners who provide these products and services are not paid a wage consistent with the federal minimum wage or the wage rate prevailing in a locality. Thus, government contracts involving prison labor reduce the predominant wage, which directly contradicts one purpose of the SCA—namely not “finance[ing] contracts which undercut and depress the wage rate prevailing in a locality.”

Prison labor needs to be protected by an amendment to the SCA to better ensure that federal government funds are not being used to decrease the prevailing local wage. As it stands, government agencies are getting cheaper products and services from prisons who pay their workers low wages because of regulations that force agencies to buy prisoner-made goods if a comparable item is offered. By doing so, those agencies are not getting products or services from other companies or providers who are required to use minimum wage standards. Paying prison workers at least a minimum wage in accordance with the SCA would prevent the prevailing wage rate from being depressed and would better effectuate the purpose of the SCA.

3. In Order to Further the Purpose of the SCA, New Contractors Must Not Use Low-Wage Labor in Order to Underbid Existing Contractors.

Indirectly, “UNICOR may assist private firms that compete for government contracts by allowing [the firms] to purchase manufacturing time and to subcontract parts and services directly through UNICOR.” Doing so allows the private firms to reduce costs and have more competitive bids at the expense of low-paid inmates. Thus, the SCA’s prohibition on new contractors underbidding existing contractors by using low-wage labor is violated. Each of the SCA’s purposes are undermined as a result of failing to apply the SCA to prison labor. By subjecting inmate labor to prevailing wages governed by the SCA, this problem will subside because low-wage labor will not be utilized. Instead, the cost of prison goods will be more consistent with other sources of obtaining goods that result from minimum wage labor, and as a result, the worry of underbidding by using low-wage labor will no longer exist as the goals of the SCA are met. Overall, it would be consistent with the SCA’s mission to apply its wage requirements to prison labor.

B. Prisoners, Private Businesses, and the Government Procurement System Would All Benefit from the Protections Afforded by the SCA.

The benefits afforded by this adaptation of the SCA would be felt beyond the walls of penitentiaries. This Section will discuss the different positive effects such a change would have on the greater community. Subsection One focuses on the impact on inmates themselves. Subsection Two highlights the gain of private businesses. Subsection Three details the expected benefits that would accrue to the government.

1. Inmates’ Ability to Afford Basic Prison Necessities

Inmates who work while incarcerated do not make a high enough wage to afford basic necessities such as menstruation products and phone calls to loved ones, nor can they afford these necessities in addition to other goods including basic hygiene products. The SCA provides prison laborers with a solution to their problems associated with affording these goods—namely a wage in accordance with that prevailing in their locality, or the federal minimum wage as established under the Fair Labor Standards Act of 1938.

If inmate laborers were paid the current federal minimum wage of $7.25 per hour, and they worked forty hours a week, these inmates could get paid $290 per week, before taxes. This is approximately fifty-one times more than inmates who complete maintenance labor while incarcerated currently make. With this higher wage, inmates would be able to afford prison products that they otherwise could not afford—including menstruation products at $13.90 per week, phone calls at $12.60 per hour, and goods from the prison’s commissary.

2. Private Businesses’ Financial and Reputational Benefits

Inmates are not the only people who benefit from the increase in their salary to minimum wage level. Private businesses are likely to have an interest in making sure prison laborers get paid an amount in accordance with the Fair Labor Standards Act. Currently, UNICOR profits through its ability to provide goods to businesses that are competing for government contracts. Because UNICOR pays less to its workers, it can charge less for its products, thereby making prospective contractors’ bids more competitive. However, these more competitive bids come at a price for businesses who choose not to buy goods associated with low-wage labor. Since the SCA does not govern prison labor but governs other contracts, it is difficult for covered contractors to be able to get goods that are as low in cost as the ones produced through inmate labor and sold by UNICOR.

By paying a higher salary to inmates, UNICOR will likely pass on that cost to businesses that want to procure those goods. As a result, businesses who do not want to purchase low-wage labor will benefit for two reasons. First, they will be more likely to buy the slightly cheaper goods from UNICOR, which saves them money, businesses would not have to worry as much about widespread repercussions of associating with low-wage prison labor, as UNICOR would pay a higher wage under the revised SCA. Second, businesses will benefit because they would not be not competing against low-wage labor for contracts with agencies. Under a revised SCA, there would be a more level playing field in terms of a bidder’s ability to obtain contracts, especially those contract types that place a high value on price comparison.

3. Implementation of the Government Procurement Goals of Fairness, Uniformity, and Competition.

The entire federal government procurement system will also benefit from amending the SCA. When the federal government decides which businesses to award contracts to, it must take into account a number of procurement goals set forth in the Federal Acquisition Regulation (FAR). Putting businesses on a level playing field in order to get contracts is also consistent with the government procurement goals of fairness and uniformity. As it stands, businesses are placed in a tough situation because they face potential public chastisement for utilizing cheap inmate labor on their goods. On the other hand, if they do not use UNICOR-produced goods, they may be at an economic disadvantage because they are forced to try and compete with contract bidders that use the cheap goods produced through low-wage prison labor. If the SCA was to provide prisoners with higher wages, and the cost of goods increased as a result, proposals would be more fair and a successful bid would not be as dependent on how much prison labor saves people who purchase from it, but on other substantive aspects of the bid. Additionally, because there would be more uniform rules regarding wages under the amended SCA, the uniformity and integrity of the government procurement system may increase, because companies would compete “solely upon the merits of their demonstrated capabilities and the quality and price of their offers.”

Similarly, an amendment to the SCA will enhance the government procurement system’s goal of competition. Competition is a leading goal of the government procurement system, as codified in Part 6 of the FAR and in the Competition in Contracting Act (CICA). Both outline the requirement for all government contracts to be subject to “full and open competition” with limited exceptions. It is clear that CICA, which governs all government contracts, places a high value on competition during the procurement process. Use of the SCA increases competition because companies that buy UNICOR goods for use in their procurements, likely at a cheaper price, will not be at an automatic price advantage. As a result, prospective federal contractors will be motivated to compete “head-to-head in seeking to obtain work,” thereby increasing competition. Likewise, the acceptance of proposals would turn on a number of other factors, such as price of goods other than those manufactured by prisoners who make low wages.

IV. Anticipated Counterarguments

A number of counterarguments could be raised against amending the SCA to apply to the wages of prison workers. This Part will address some of these counterarguments. Subpart A addresses the ability of the SCA to be implemented in a way that makes a substantial impact on prisoners while still keeping prisons profitable. Subpart B responds to concerns about prisoners’ ability to afford prison goods even if they were to be paid prevailing wages. Lastly, Subpart C will explain how providing prison laborers a prevailing wage rate is a decision popular with the public that will positively impact private businesses.

A. Increasing Wages in Accordance with the SCA Is a Tangible Goal.

One potential counterargument is that increasing wages may come at the cost of harming UNICOR because it will have to increase its prices in order to pay inmates higher wages. With higher prices, businesses may be hesitant to buy from UNICOR since it would no longer be a cheaper option. However, increasing prison labor wages in accordance with the SCA is a tangible goal that will neither bankrupt prisons nor cause funding issues for UNICOR. Although UNICOR will not have as much funding as it previously had and prisons will have a significant extra expense, this is no barrier to increasing prisoner wages. As a revolving fund, UNICOR derives its revenues from the sale of products and services less the operating expenses and inmate and staff wages. If UNICOR’s 2017 accrued salaries and wages expense was increased to pay prisoners at minimum wage level, UNICOR would still be operating at a net gain of income each year.

1. UNICOR Can Sustain Its Profits, Despite Paying Its Workers More, by Altering Its Objectives.

Similarly, if UNICOR needed to increase its profits and assets further, they have available avenues by which to do so. One such avenue is by changing their goals to reflect increased wages for current inmate workers, rather than an increase in the number of inmate workers employed. Currently, UNICOR has a goal “to increase the number of . . . inmate positions by 4,000, or twenty-four percent” over the next five years. Thus, instead of paying 4,000 workers an average of $5.60–$25.20 per week, or $22,400–$100,800 per week total for all new workers, that money can go a long way toward giving all current employees a minimum wage.

Currently, UNICOR’s revenue depends on federal procurement for the sale of its products and services. However, in fiscal year 2017, UNICOR made purchases totaling $341.8 million through private sector procurement, particularly in buying from small businesses in order to obtain “supplies, raw materials, equipment and services to support its operations.” The current relationship between UNICOR and the private sector is limited to these interactions because UNICOR is restricted by statute to selling its products only to the federal government.

Despite this, UNICOR could also increase revenue and afford higher wages by strengthening relationships with commercial customers, which is something that it is already exploring. For instance, there has been approval for FPI to obtain commercial customers through “repatriation,” or the bringing of overseas goods production back into the United States. In 2017, twenty repatriation projects were executed, totaling $1.8 million in sales. UNICOR estimates that this repatriation income could grow to $7.5 million in sales and an additional 500 UNICOR inmate jobs. Doing so increases the amount of customers, orders, and sales, which in turn creates more revenue.

Another method UNICOR could employ to ensure inmate workers are being paid at least minimum wage is increasing the cost of the goods and services it provides which, as mentioned above, helps satisfy procurement goals including those of competition and fairness. Currently, FPI “operate[s] in six business segments” based on products and services. From those segments alone, FPI generated over $453,763,000 in revenue in fiscal year 2017. By increasing the costs of the goods and services it provides in each of these six segments even marginally, UNICOR’s revenue could drastically increase. Customers are still likely to buy from UNICOR, especially if the increases in cost are marginal and the products offered are still cheaper, just not as low cost as before, as other goods on the market. Additionally, charging more for its products is in accordance with the SCA’s goals of neither using low-wage labor to lessen the prevailing wage rate, nor using it to allow new contractors to underbid existing contractors.

2. The Federal Government’s PIECP Program Has Proven That It Is Possible to Pay Prison Workers Minimum Wage or Higher and Still Be Profitable.

As mentioned above, PIECP is a federal government program indefinitely authorized by Congress that engages about 5,000 prison workers in private sector jobs that pay minimum wage or higher. PIECP benefits financially by allowing for private companies to “establish joint ventures” with state and local correctional facilities. PIECP has succeeded in part by employing strategies that are similarly available to UNICOR, such as commercial sector contracting. By utilizing these same strategies to increase revenue, UNICOR may expand its profits in order to afford an increase in wage salaries to a level consistent with PIECP, which is that of “not less than that paid for similar work in the same locality’s private sector.”

B. The Protections Afforded by the SCA Are Enough to Help Inmate Workers Afford Basic Necessities While Incarcerated.

Another counterargument concerns whether prisoners would be able to afford basic goods while incarcerated even with higher wages under an amended SCA. One of the criticisms of PIECP is that paying minimum wage does not actually help these prisoners afford basic necessities, as wages are subject to various deductions before they even reach the individual. These deductions for room and board, taxes, and victims funds total almost fifty percent of inmates salaries. Therefore, there is potential for similar problems to arise with UNICOR, where inmates are not getting the full amount of the salary that they earned, even if they earn the minimum wage level in accordance with the SCA. If this occurs, inmates would be in a similar situation to where they are now, although perhaps not as severe, in terms of struggling to afford basic necessities while incarcerated, despite working full time.

To avoid this problem, inmates need to not only be paid wages in accordance with the SCA, but they also need to be paid wages that are not immediately subject to various deductions like PIECP wages are. It is essential that UNICOR differs from PIECP in this important aspect in order for the protections of the SCA to be efficient in ensuring that inmates are receiving a livable wage while incarcerated.

C. Paying Inmates Wages Governed by the SCA Will Garner Public Support.

An additional counterargument involves whether paying prisoners wages in accordance with the SCA is a position that will be welcomed by private businesses looking to decrease their labor costs in order to lower the costs of their products. Over fifty prominent American corporations use prison laborers as a means of reducing their payroll costs, including McDonalds, Johnson & Johnson, UPS, Costco, and others. Big businesses are motivated to use prison labor because while prisoners receive such low wages, businesses receive millions of dollars a year in tax cuts in exchange for employing inmates. Despite the existing financial benefit, some companies have increasingly decided to stop sourcing foods produced using prison labor. This is in large part because customers have grown uncomfortable with the use of prison labor, and have public protested, which in turn attracts media attention. Companies try to justify their participation in prison-work programs by saying they are supporting rehabilitative work programs that are made to try to get inmates “back on their feet” by providing them with life skills. However, some customers have expressed that they were uncomfortable with companies sourcing products produced with inmate labor, given that inmates are paid such low wages.

Due to this negative attention associated with utilizing prison labor, companies often want the fact that they use inmate services to be kept away from the public eye. Despite wanting to keep information under wraps in fear of public reaction, news stories and the media often expose the use of inmate labor. In one case, Victoria’s Secret was subject to media scrutiny for hiring prisoners to replace “Made in Honduras” garment tags with tags that read “Made in the U.S.A.” When two prisoners exposed this practice to the media, they were “placed in solitary confinement”—indicating how seriously the potential impact of exposed labor is to companies and how much companies dislike the public attention. While there is an extensive list of companies and individuals that engage in some form of prison labor, there is no such list for those who no longer engage in it, so the full extent of the practice may never be known.

Additionally, because prisoners’ low wages have garnered public attention, the issue of prison labor has remained prominent throughout the 2020 Presidential campaign. Some candidates announced during the Democratic Party presidential primary that their platform responds to and denounces the employment of prison laborers for below minimum wage—making it apparent that payment of prevailing wage to incarcerated individuals is a popular political opinion supported by the public.

V. Conclusion

Currently, prison workers are being paid wages that do not allow inmates who are employed full time to afford basic necessities needed to survive in prison. By applying the provisions of the Service Contract Act to prison labor, many of the problems that prisoners face will subside. Increasing wages in accordance with the SCA can be done given the success of a similar prison employment program, PIECP. UNICOR could also alter its goals and expand its partnership with commercial customers in order to obtain additional revenue. Ultimately, the extension of the SCA to apply to inmate labor would further the purposes behind the SCA’s original enactment. An amendment to the SCA would better incarcerated individuals, private businesses, and the government alike.