“Insourcing”..: there is no current definition for this word in our Urban Dictionary or Websters. I plan to change that by defining in detail the concept of insourcing and who is responsible for the practice of it. First we must compare the word to its cousin, Outsourcing.
Society today is familiar the term “Outsourcing.” When used in connection with manufacturing it means a company sending work outside the business and having it performed utilizing the labor or expertise of others. Since the mid ‘80’s most realize to American workers, it really meant sending millions of our jobs overseas where foreign labor was cheap and plentiful.
Not so well understood is the term “Insourcing” – Insourcing is is widely used in production to reduce costs of taxes, labor and transportation. Insourcing describes the process used by corporations to remove jobs from private sector labor markets and “Insource” them to prison industry operations here in the U.S. This allows for profits more in line with outsourcing, but eliminates the necessity for expensive transportation costs to return the finished goods to U.S. consumers – it also allows manufacturers to attach labels to their goods marked “Made In The U.S.A.”
Insourcing of jobs is the “quiet” elimination of private sector jobs by transfer to prison industries. Corporations wishing to participate in using prison labor, partner with prison industry operations under the federal Prison Industries Enhancement Certification Program (PIECP or Pie Program). 18 USC 1761(c) is the controlling federal statute of PIECP. Though private sector corporations are prohibited from closing private sector operations in favor of prison operations, they do so without consequence. There are other mandatory requirements that must be followed in order to participate in PIECP, but those also are rarely enforced.
The way these prison partnerships typically work is that a manufacturer wanting to increase profits moves their equipment, technology, materials and unfinished goods to a factory setting within a prison industry facility. Once up and running, the same products come off the assembly lines and are shipped as before. The difference is this, private sector employees of the company have been terminated or laid off. A handful of employees are usually kept on long enough to train inmates and prison supervisors in the manufacturing used to make the products. Once that is accomplished, they are also eliminated and their positions taken over by a prison industry supervisor.
This Insourcing of labor creates quite a number of unemployed citizens. Burdens are placed on state and community social help programs, unemployment compensation, etc. So while the corporation saves lots of money in labor costs – no more unemployment insurance premiums, less expenses in lease of facilities (usually leased by the prison operators at $1.00 per year), and no more employee benefits such as medical insurance, vacations or paid time off – the communities they vacated are left to fund the displaced unemployed workers. In addition the local government loses taxes that were paid by the corporation, previous landlords of the facilities once leased to the corporations are left with vacant property and local shops and other businesses suffer a drop in sales due to the newly unemployed workers left behind.
In the two previous segments I have talked about the current situation in Las Vegas involving the discovery of prison labor used in the manufacture of products used in the construction of major projects. The developers and or investors involved in these new construction projects in Las Vegas are all influential, well connected; Andre Agassi, SPB Capital Partners, family members of Thomas & Mack Center and the Bulloch family – all well known to the citizens of Nevada.
To many this was a “new” discovery – the use of prisoners as a cheap labor force. But this practice has been ongoing now for years, and in particular since 1998 when major movers and shakers in the world of politics, finance, manufacturing and prison operations converged in Washington to discuss “innovative strategies for Prison Industries” and “Policies and Programs in Prison Industries.”
Participants included: the CEO of Prison Rehabilitative Industries and Diversified Enterprises (PRIDE), the first private corporation formed to operate Florida’s entire prison industries; U.S. Attorney General, Janet Reno; Florida Representative Bill McCollum, Texas Representative Ray Allen and a business owner of Genoex, one of the first private corporations to eliminate American workers, replacing them with prisoners.
PRIDE’s CEO was Pamela Jo Davis, the darling of Florida’s newest Governor-elect Jeb Bush, and she also “just happened to be” the Chairwoman of the National Correctional Industries Association (NCIA), a trade group representing prison industries, industry vendors, suppliers, workers and companies using prisoner labor in manufacturing. Representative Allen (R-TX) was soon to become Chairman of the House Committee on Corrections– and also “just happened” to be a member of the American Legislative Exchange Council (ALEC), serving on their criminal justice task force. Allen again, “just happened” to also be a registered lobbyist for the NCIA.
This NCIA also “just happened to be” the private association the U.S. government had outsourced oversight of the PIECP to in 1995.
It was this happy group of industrialists, politicians, lobbyists, program regulator and prison industry authorities who met in DC in ’98 to discuss just how prison labor could be exploited – legally, of course – to reduce wages to American private sector workers and increase profits to business owners. First thing was to find a way to make their actions legal and in order to expand; a means was needed to propose such legislation in every state. These were the responsibility of ALEC. With more than 2,000 legislative members representing every state, ALEC had a proven track record (going back more than two decades) of enacting and passing model legislation written by their corporate members.
How about federal laws?