10 Companies that Use Prison Labor to Rake in Profits

Check out the major corporations that benefit from prison labor.

Illustration showing prisoner in jumpsuit doing manual labor.

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Is prison labor an antiquated practise in the United States and other Western countries?

Many might believe that this strategy, primarily used to cut down on operating costs, is a relic from a distant past. However, in the last 50 years or so, the use of inmates and felons as labor has taken on a whole new meaning. Since the COVID-19 pandemic, some companies have resorted to exploiting prison labor for goods and services, such as stove assembly, paint products, safety gear, electronics goods and many others. In fact, it is estimated that approximately 4,200 large corporations have utilized prison labor to produce goods.

So, who are these big businesses that hire prison labor to perform garment manufacturing, vegetable and fruit picking, customer service and fast-food preparation? Today, lots of large corporations use prison labor for many types of jobs. Some jobs are outsourced inside the prison, and some are done off-site. The exact number of inmates who perform labor for corporations are not released by the prison services, but the numbers are not minuscule. It is estimated that out of the 2.3 million incarcerated individuals, as many as 600,000 are used to produce goods.

Here is an overview of major corporations that currently and reportedly use prison labor:

1. Walmart

Walmart is probably the one corporation that has used prison inmates for its production supplies the longest. Inmates are used to perform manufacturing tasks. The inmates also clean products of UPC barcodes and erase the barcodes of returned items so that they can be repriced and resold. Other work includes repackaging returned goods. According to Walmart, the company only uses voluntary prison labor. Their program pays inmates prevailing wages to prepare them to get back into society by providing marketable skills and job training that will benefit them in a job search.

2. McDonald’s

McDonald’s has been using prison labor for many of its frozen foods. Inmates process beef for burgers, prepare potatoes to make fries and package a variety of chicken products. Inmates also process bread and milk products. These foods are then transported to the various franchises all over the country. The fast-food chain has been rebuked for its exploitation of prisoners. McDonald’s issued a statement in 2020 saying they are against any form of forced or involuntary prison labor.

3. Compaq

It was first discovered more than 20 years ago that Compaq and a couple of its other industry counterparts had used prison labor to manufacture circuit boards. Twenty years later, there has been no sign that Compaq, which is now a subsidiary of Hewlett-Packard, has slowed down its usage of inmates to produce these computer components.

4. Wendy’s

Like McDonald’s, Wendy's has also been a prominent fast-food titan using prison labor for many years. The inmates process beef to prepare burgers, and Wendy’s ensures its cost of operations remains low by using this labor source. Wendy’s state in their supplier code of conduct that their suppliers should only use individuals who manufacture voluntarily.

5. Starbucks

Starbucks also utilizes prison labor to cut down on its manufacturing costs. The company subcontracts various coffee packaging jobs to Washington State Prison services. Prison labor is mainly used during the holiday season to package holiday coffees. While Starbucks doesn’t directly mention prison labor in their supplier code of conduct, they do state that their suppliers respect the rights of individuals who work with them.

6. Sprint

Sprint has used blue- and white-collar criminals to provide telecommunication services to its customers. Inmates work in call centers 24/7 and provide customer service and assistance to Sprint clients. Similarly, Sprint states that they are completely against involuntary or forced prison labor.

7. Verizon

Verizon, another major telecommunications firm, also takes advantage of white-collar criminals to provide telecommunication services to its customers, but also states that none of the prisoners are forced into the labor. This type of labor is cheap and easily available, with the savings passed onto subscribers and the revenues given to shareholders.

8. Nintendo

A 2020 report by the US State Department-funded Australian Strategic Policy Institute found that at least 83 companies were directly or indirectly linked to Chinese forced labor camps. Nintendo was one of the companies on the list, with rivals Sony and Microsoft also named in the report.

The video game brand is not directly using labor from these camps, but it has ostensibly used parts sourced by these places for video game hardware manufacturing.

As the report stated, factories across China are using forced labor 'that is tainting the global supply chain.'

9. Avis

You might notice a pattern with this next selection.

Avis, the car rental company behemoth, uses white- and blue-collar criminals to support its call centers and customer service needs by taking reservations and arranging transportation at different airports for clients throughout the US.

‘The call centers can be found in various state and federal prisons across the country,’ said Stephanie Redden, the author of a research project titled ‘Hello from the Inside: Race, Gender, and Unfree Labour within the Transnationally Situated Prison Call Centre Industry’. Several transnational companies have utilized call center labor, but it’s unclear which organizations are specifically involved.

10. Aramark

Aramark has used prison inmates for its dining services for many years. The company has been lamented for its poor food quality, but it still uses inmates to prepare and package most food items. Unlike other corporations, Aramark has been accused of not paying inmates anything and in 2019 were sued for using ‘involuntary servitude’.

Final thoughts

The history is a bit extensive as prison labor in the US has been utilized for more than a century. In the early days, prisoners were used to maintain the infrastructure of the prisons and keep its functionality and operations. This was followed by using prison labor to perform more formal work onsite, including making garments, tending gardens and growing vegetables. In rare cases, low-level prisoners used to work on prison farms, picking fruit and repairing nearby roads.

In general, all able-bodied inmates can be used as prison labor, be it menial or challenging jobs. However, those with a medical illness or a physical handicap are not forced to work. The work hours may vary from six to eight hours every day, including weekends. Rest periods and food are provided, including any safety gear if there is a need. Correctional officers are usually present and watch over the inmates.

Despite controversial claims in the media, the working conditions for prison labor are not always poor, and inmates are not treated badly or inhumanely. Inmates who work well and work more are also incentivized. If they are sick, they are allowed to take some time off to recuperate. Also, like everyone else, the money earned by the inmates is taxable income. The one major incentive prisoners have for working is that their prison sentence is reduced by months or even years, depending on how long they have worked and their productivity.

Of course, some companies do not pay inmates good money and exploit their situation for their own profit. In recent years, the treatment of inmates by these corporations has been highlighted, and some areas have been improved.

Unfortunately, there is still a long way to go. But it is important to note that if paid well, and if the labor is offered voluntarily, without any force or threat, these work opportunities can provide inmates with the skills and the foundation they may need to get back con their feet when they are released from prison. Nevertheless, there is a need for greater transparency and better regulation of this labor force so that the situation of the inmates is not unnecessarily exploited or misused.

Join the discussion! Did you know that these companies used prison labor? Does it change your opinion of the brand? Let us know in the comments!

 

This is an updated version of an article originally published on 11 October 2017.