Private industry can’t compete if government prefers prison labor

Duplicity is a difficult word. It carries a negative undertone, and essentially refers to an entity that says one thing and actually does another. The motive for duplicity could be intentional or, perhaps, simply unforeseen.

For those of us who live in the world of fashion and who tirelessly promote the Made in USA concept, the reason we need to revisit the word “duplicity” is simply because we are forced to question the rationale behind the U.S. government’s decision to increase purchases of apparel from U.S. federal prisons when the same product can be obtained from private domestic contractors.

While the federal intent may be noble (trying to keep prisoners busy, preventing recidivism), the actual result is catastrophic for the commercial “Made in USA” movement. Private government contractors are the last remaining major anchor for apparel and footwear that is “Made in the USA.” If the anchor gets pulled, the ship will just drift away.

In actuality, prison labor isn’t a new subject and the duplicity has been going on for years. The problem is that it keeps getting worse, and while the overall federal uniform buying program has decreased (due to troop reductions), data shows that the government agency UNICOR (the group that handles the prison factory program) is growing their apparel production at a rapid rate. The result is UNICOR getting a larger piece of a shrinking pie and, understandably, domestic contractors are crying foul.

While UNICOR says it provides a vital recidivism service and teaches life skills to inmates, the actual result is that they literally steal millions of dollars in government contracts from the free market. During a time when the “Made in USA” mantra is so valued, our own government is causing factories to close while UNICOR is making profits by using prison labor.

Private industry just can’t compete with the federal institutions that pay prisoners pennies per hour, and many of these legitimate domestic factories (that generally employ 50 to 200 workers) are now feeling the need to shut their doors for good.

{mosads}In this past fiscal year (2016), sales of clothing and textiles manufactured in federal prisons reached $196 million. This business segment is now 39 percent of the total UNICOR sales universe, despite being one of six sectors serviced by federal prisons.

To make matters worse, UNICOR now has now received approval to go after commercial business opportunities, if it is able to determine that the sales would otherwise be sent to a foreign country. Since over 97 percent of apparel is made offshore, they just discovered a faster way to haul the anchor in.

Sales of clothing and textiles made in the federal prisons increased from fiscal 2015 by more than $18.6 million, and earnings doubled to $32.6 million. The clothing and textile sector is now 74 percent of UNICOR’s total earnings! This is troubling because, by statute, UNICOR is supposed to diversify its portfolio and not overpower any one sector.

In March 2016, Obama signed the Trade Facilitation and Enforcement Act into law, allowing U.S. Customs to prohibit, stop and enforce a ban on products coming into the U.S. if products are made with “forced” labor.

This part of the trade legislation is very interesting, because the federal government draws a distinction between “forced” labor and “prison” labor. In fact, if you are incarcerated in a federal prison, work is mandatory and thus not “forced.”

What we now realize is that it is illegal to import products made with forced prison labor, but it is legal to use U.S. prison labor to manufacture apparel in the U.S.

Talk about a free pass for the prisons.

Add to this disaster Obama’s October 2016 executive order creating “blacklisting” rules for companies doing business with the federal government, if those government contractors have current or past labor violations. This allows the government to “blacklist” a private company for labor violations as they attempt to secure a contract from the government.

The problem with this executive order, as pertains to apparel contractors, is that while private companies have several laws they must follow with regards to employment — such as minimum wage — UNICOR does not have to follow these mandates. In fact, per the courts, U.S. prisoners aren’t actually included or excluded by labor laws (such as the Fair Labors Standards Act).

The courts have generally found that prisoners are not considered to be employees, thus avoiding any responsibility by the employer. Many prisoners have referred to this as this to “modern-day slavery,” and called for a nationwide strike last September.

All these issues mean that we need to take a serious look at UNICOR. When a government recidivism program is severely hurting the legitimate American commercial market, then something must be amiss. At the very least, this is the definition of “duplicity” and that spells doom for the “Proudly Made in the USA” label, which will soon be change to “Not-so-Proudly Made in the USA with prison labor.”

Rick Helfenbein is president and CEO of the American Apparel & Footwear Association and is a strong advocate for a robust U.S. trade agenda and for “Made in USA.” He lectures frequently on the subjects of politics and international trade. Follow him on Twitter @rhelfen.

The views expressed by contributors are their own and not the views of The Hill.