The Prison Industry Enhancement Certification or PIE program was created 15 years ago - designed to give inmates work skills and provide inexpensive labor to industry participants. PIE has 200-300 working inmates at any given time - only five companies participate currently.
Among other things, HB 1914 would require TDCJ to reject prison industries contracts "if the board determines that the contract has negatively affected or would negatively affect any employer in this state." That's so broad, it's inevitable somebody will come forward to complain. I'm told by those involved with prison industry programs that, if this bill passes, they fear it will soon eliminate PIE programs entirely.
By all accounts, PIE has a pretty good track record as reentry programs go - recidivism is low, inmates help pay for their incarceration, pay into the Crime Victims Fund, and contribute to supporting their families in the free world. PIE graduates frequently are employed upon release by their in-prison employer, helping overcome the biggest barrier to success for ex-prisoners: finding a job.
But Chairman McReynolds and state Sen. Robert Nichols are seeking restrictions that would likely choke off PIE as it currently exists. Why, you might ask?
Last year, a company called Lufkin Trailer (in McReynolds' and Nichols' districts) cried foul claiming that a PIE-based competitor, Direct Trailer, assumed an unfair advantage because they used inmate labor and paid minimal rent for their in-prison manufacturing facility. Sen. Nichols rode to their defense, convincing TDCJ to end Direct Trailer's contract. (Even so, with this supposedly unfair competition gone, Lufkin Industries continues to lay off more employees.)
The idea that in-prison manufacturers have some great advantage is a myth. For starters, Lufkin Trailer's 2008 10-K form filed with the SEC notes that "any labor disruption could have a significant impact on Trailer’s ability to maintain production levels," however think about the labor disruptions in prisons, where lockdowns, disciplinary actions, and any number of other problems free world employers never have to deal with may significantly impact labor availability.
Further, PIE programs must comply with byzantine prison rules that simply dont' affect free-world industries - for example, elaborate systems for counting and accounting for tools at the beginning and end of each shift to keep inmates from smuggling weapons or contraband.
For that matter, all existing PIE programs are relatively small endeavors that are unlikely to directly affect other Texas' businesses. Tellingly, in their official 2008 10-K statement, Lufkin Industries announced its decision to close Lufkin Trailer but didn't once mention competition from in-prison labor as a significant factor. Instead, the company blamed
reduced activity in the home and road construction markets as well as reduced profitability from higher fuel prices. In 2007, industry order rates and backlog for flatbed trailers decreased over 40% and for dump trailers over 25% compared to 2006 levels. In the fourth quarter of 2007, industry order rates and backlog for flatbed and dump trailers decreased almost 50% compared to the fourth quarter of 2006. Due to these market conditions, in January 2008, the Company announced the decision to suspend its participation in the commercial trailer markets and to develop a plan to run-out existing inventories, fulfill contractual obligations and close all trailer facilities during 2008.Indeed, the 10-K's specific discussion of "competition" never mentioned their PIE-based competition as a serious factor:
The trailer market is highly competitive with relatively low barriers to entry. The majority of the cost of a new trailer comes from purchased materials of aluminum, steel, tires, axles and wood flooring. Since there is minimal product differentiation in this market, price is the key driver. The companies with the highest market share are Great Dane and Wabash, along with several other large manufacturers like Utility, Stoughton, Fontaine, Vanguard and Hyundai. The Company does not have a significant market share in the trailer market.By that account, any minor, extra competition from a small PIE outfit didn't have nearly as much to do with Lufkin Trailer's closure as macro trends in the global trailer market and competition from larger producers. Direct Trailer isn't even mentioned in the company's 10-Ks as a significant source of competition.
So the prime example being trotted out to restrict the PIE program is a false one. International market conditions and competition from larger economic players were the reasons Lufkin Trailer closed, by the company's own assessment, not some penny ante prison industries operation.
Still, Sen. Nichols in particular continues to attack the PIE program as some villainous activity while painting Lufkin Trailer as an innocent victim of a prison jobs program. What Nichols neglects to mention is that Lufkin Industries recently lost a class action racial discrimination lawsuit brought by African American employees of Lufkin Industries (Lufkin Trailer was specifically named in the suit.) The conservative Fifth Circuit Court of Appeals in February of 2008, affirmed (pdf) most of the lower court's ruling against the company, particularly related to the "discriminatory impact of [the company's] subjective promotional policies." If Nichols and McReynolds are concerned about Lufkin Trailer employees, maybe they should be seeking remedies for those problems.
I wish the Corrections Committee was looking for ways to expand the PIE program, not restrict it beyond its current, minimalist presence in Texas prisons. After all, who would you rather have released from prison - the guy who sat around the whole time working out and swapping techniques with other cons, or the guy who went to work every day at a PIE facility and learned job skills to become a productive citizen upon release?
We need more initiatives like PIE and the Prison Entrepreneurship Program to prepare inmates for success upon reentry, not less. Efforts to restrict in-prison jobs programs IMO are misguided and counterproductive to public safety.