The darker side of ‘Made in USA’

Donald Trump and Hillary Clinton have squeezed the energy out of international trade deals  as they both continue to promote “Made in America.”

{mosads}However, like all things political, both camps have seized the headlines yet failed to look over their shoulders. Trump loves to talk about making product here, and the Clinton camp is quick to read garment labels from Trump’s own labels that say: “Made in Mexico/ Bangladesh/China.”

Truth be told, there is a real threat to our U.S. apparel manufacturing base, and the nature of that threat will surprise you.

As the “Made in USA” rhetoric plays out on national TV, those of us who fight the daily battle for domestic apparel manufacturing have routinely encountered unfairness, one that remains hidden from most Americans. This behemoth will destroy your job, close your factory and — hard to believe — is actually controlled by our own government!

The group is a division of the Federal Bureau of Prisons, operating under a program called UNICOR. They profess to do all things good for prisoners but, at the same time, their efforts and growing business enterprise will ultimately put legitimate U.S. apparel makers out of business.

But how can that be? Our own government forcing hardworking American firms out of business? 

Well, there are multiple reasons as to why this is happening, but suffice it to say, as a country, we sometimes spin out of control (remember Fawn Hall of Iran-Contra fame, stuffing top-secret documents in her boots and walking out of the White House?) Well, UNICOR is less random than Ms. Hall, but it is far more determined. UNICOR pays prison inmates slightly more than 23 cents an hour (prisoners who get free healthcare, free room and board, and don’t pay taxes or utility bills). With advantages like these, plus having first dibs on every available government apparel order, only a fool couldn’t win a federal contract.

Policymakers instinctively believe that all this is probably not true. After all, President Obama recently signed the Trade Facilitation and Enforcement Act into law. By doing this, U.S. Customs and Border Protection can now prohibit, stop and enforce a ban on products coming into the United States if the products are made with prison labor.

Surely, what’s good for the goose is good for the gander, but that’s not the case: It is illegal to import from the prison environment, but it is very legal to make apparel if the prisons are located in the U.S.!

In 1934, the Federal Bureau of Prisons (BOP) created Federal Prison Industries (FPI) and called the work effort UNICOR. Most people think UNICOR is only involved with stamping automobile license plates, but they’re wrong. UNICOR is huge, with sales approaching $500 million, and a manufacturing base that includes apparel, mattresses, linens, draperies, office furniture, electronics and printing — to mention a few.

Today, it appears that UNICOR utilizes more than 12,000 inmates and operates in 80 prison factories for all of its product segments. Sales of clothing and textiles reached $177 million last year, and UNICOR made a profit of $16 million. Apparel items represented 37 percent of all product groups, thus making apparel and textiles UNICOR’s largest and most lucrative operating segment.

UNICOR claims that the factory environment assists the prisoners when they are released. Really?

Most of the legitimate factories that supply branches of the U.S. government operate under a federal law, the Berry Amendment, that requires the purchase of U.S.-manufactured products. Many of these private-sector factories are family-owned enterprises that employ 50 to 200 people, but lose orders to UNICOR, mostly because of a requirement that the government must “mandatory source” its apparel first from UNICOR before going to the private sector. As our military shrinks in size, it becomes harder and harder to compete for orders.

So, where does this lead us? Well, just last week, Obama stuck another fork in the meatloaf when he signed blacklisting rules for government contractors. His new requirement insists that firms who do business with the government must report past labor violations in order to qualify for federal contracts. Do you actually think the prisons will comply with this rule, and that they will operate under the exact same guidelines?

Labor violations in a prison? Really?

Of course, UNICOR puts out good P.R. and portrays an excellent face. In fact, it even warranties its products. In terms of clothing and textiles, UNICOR “guarantees all products to be free from defect in materials and workmanship.”

While that sounds great, it would certainly be interesting if someone would read that warranty (or a similar one) out loud, so that the thousands of Army and Marine Corps troops that received defective UNICOR combat helmets a few years ago could hear about the warranty. All of the approximately 126,000 UNICOR helmets were recalled and, fortunately, no one was hurt.

However, the government sustained a loss of more than $19 million, and (to make matters worse) no criminal charges were filed. Do we need soldiers to die for us, to understand that prisoners should not be trusted to make combat helmets for the military? Do we all have a collective hole in our heads?

If Clinton and Trump are genuinely focused on growing the domestic apparel manufacturing and promoting the “Made in USA” label, they need to look beyond the horizon. If the prisons continue to steal business from the private sector, and if UNICOR continues to have the ability to underprice their products, then the U.S. domestic apparel industry is simply doomed. An advertisement for a job may ultimately look like this:

APPLY NOW TO WORK IN OUR PRISON FACTORY — free housing, free medical care, guaranteed workflow, all finished products covered by warranty, super-competitive pricing, and absolutely no liability if products turn out to be defective.”

Start your “Made in USA” career today … COMMIT A CRIME, GET A JOB!

Helfenbein is president and CEO of the American Apparel and Footwear Association and is a strong advocate for a robust U.S. trade agenda and “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.