Statement of David A. Smith, Director

Public Policy Department, AFL-CIO

Before the House Committee on Education and the Workforce

Subcommittee on Oversight and Investigations

April 21, 1999

I am pleased to submit this statement on behalf of the more than 13 million members of the AFL-CIO and our affiliated unions.

The issues before the Subcommittee today are complex and far reaching, They require us to balance our concerns for fairness, our concerns for justice, and out concerns for an effective and safe prison system. The AFL-CIO and its affiliate unions, nationally and in the states, have consistently supported efforts to provide training opportunities for prisoners to help in their rehabilitation, and to reduce recidivism, but always with the caution that prisoners should never be used in competition with free labor.

Unfortunately today, prison labor is increasingly being used to perform work in both the private and public sectors ordinarily done by free workers. Prison laborers are generally denied coverage under minimum wage, unemployment compensation, workers' compensation, collective bargaining and other worker protection laws.

In light of these disturbing trends, the AFL-CIO is very concerned about two recent expansion initiatives by the Federal Prison Industries (FPI), which could become sources of additional unfair competition with free labor and the businesses that employ them; 1. FPI's intent to sell inmate produced services in the commercial market, and 2. The recent FPI publication of a comprehensive regulation to codify "existing standards and procedures."

First, the AFL-CIO has serious reservations regarding FPI's intent to begin selling inmate produced services in the commercial marketplace. FPI's proposed expansion into commercial services , after several decades of practice during which sales of inmate-produced services to the commercial market were avoided, is questionable policy with the potential for severe negative impact on the free labor market.

Equally troubling is a Department of Justice February 1998 legal memorandum which would free the state prison industry programs to sell inmate-produced services in the commercial market without constraint. in effect, the restrictions imposed by the Prison Industries Enhancement (PIE) program would no longer be applicable. This would be an unprecedented and unacceptable expansion of inmate-produced services for the commercial market.

Secondly, the AFL-CIO is concerned with FPI's January 7, 1999 publication of a comprehensive regulation to codify "existing standards and procedures utilized to accomplish FPI's mission." These proposed rules have the potential to substantially expand FPI's activities without Congress having an opportunity to consider and perhaps modify the proposed changes.

An especially troubling aspect of the proposed regulation is that the definition of what constitutes a "new product" or a "substantial expansion of production of a current product" could foreclose any opportunity for public comment on most future expansions.

With these two initiatives, FPI is proposing sweeping changes in the way Federal Prison Industries operates, without a detailed review of the impact of prison industries on free labor and the companies that employ them. FPI has clearly not done its homework before proposing changes that could produce a large expansion of both federal and state prison industries.

Federal Prison Industries must produce more comprehensive analysis of the effects of prison labor on the free labor market before embarking on specific plans for prison expansion. We should begin by commissioning an analysis of the impact of the PIE and other state programs on labor and product markets. The projected growth in the prison population makes the argument for comprehensive analysis even more compelling.

The AFL-CIO believes that here are too many unanswered questions and concerns which require a serious independent and thoughtful analysis before any action is taken on these proposals.