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Analysis of Correctional Industries Programs

NCJ Number
Corrections Today Volume: 61 Issue: 6 Dated: October 1999 Pages: 94-97
Mike Yae
Date Published
4 pages
This analysis of four crucial business issues that correctional industries (CI) experience concludes that these programs are very difficult businesses to manage, have formidable problems without clear answers, and struggle to compete and even just to stay afloat.
Most people believe that the low hourly cost of inmate labor is such an advantage that CI programs would completely dominate business and eliminate private-sector jobs without laws to prevent CIs from entering the open marketplace. However, CI programs have to deal with four major issues. The first is whether low costs of inmate labor provides a competitive advantage. The benefits of the low labor costs are more than offset by the additional expenses associated with operating in a prison setting. Problems that result in higher costs include the untrained workforce, a frequent lack of socialization skills necessary for teamwork, regular work stoppages due to the need to count inmates and other factors, the need to move raw materials through multiple security gates, and high turnover rates. Three other business issues are the unique restrictions on market access due to State and Federal laws, the concentration of CI operations in the later stages of product and industry life cycles, and cash flow problems due to the inability to borrow money. Many people assume that the political issues are more difficult for CIs than are the business issues. However, what CI practitioners have been able to accomplish from a business standpoint with the limited resources available has been nothing short of a miracle. Photographs, tables, and 3 references