Federal Prison Industries: Fair to business, vital to society

Larry D. Thompson
Larry D. Thompson Former Deputy Attorney General - U.S. Department of Justice, Lawyer, Trustee - The Brookings Institution

March 1, 2004

Shortly before Congress’ holiday recess, the House of Representatives passed HR 1829—the Federal Prison Industries Competition in Contracting Act. This bill is designed to cut the Federal Prison Industries (FPI) program substantially, purportedly as a means to provide relief for American manufacturers and small businesses that have suffered the brunt of this country’s recent job losses.

In reality, restricting the FPI program would provide little, if any, relief for industries claiming to be adversely impacted by “unfair” competition from FPI. Rather, the only certain result from reducing the FPI program is the revictimization of the communities to which inmates return, when they are unable to maintain employment because they were denied the opportunity to develop a work ethic and learn job skills in the FPI program while in custody. Although the FPI program produces products and performs services, the real output is inmates who are more likely to return to society as law-abiding taxpayers because of the job-skills training and work experience they received in the FPI program.

Created by Congress in 1934, FPI is a wholly owned government corporation whose mandate is to employ and provide job skills training to as many federal inmates as possible. By law, FPI is self-sustaining, receives no appropriated funds, and operates in a manner that minimizes adverse effects on the private sector. Critics of the program contend that FPI has a negative impact on the private industry that exceeds its social benefits. The facts indicate otherwise.

First, FPI improves public safety by reducing crime. Specifically, professional research has demonstrated that inmates who participate in FPI are 24 percent less likely to return to criminal behavior than those who do not, and 14 percent more likely to be employed following release than their nonparticipating peers. Inmates who return to the community with the skills provided by working in FPI earn higher wages, providing additional benefits to the community.

About 34 percent of FPI participants belong to minority groups. Minorities, who are at greater risk of recidivism according to studies, have a higher rate of improvement from participating in FPI programs than nonminorities. These FPI training programs improve their chances for a successful return to society. Additionally, the FPI program focuses on training and employing inmates who, due to their criminal background and unstable work histories, are at risk to return to criminal behavior. Of the inmates in the FPI program, 76 percent have been convicted of drug, weapon or other violent offenses such as homicide, aggravated assault, rape or kidnapping.

A study by the Washington State Institute for Public Policy assigned a dollar value to the benefit to society provided by correctional industries programs (FPI and those operated by some states): For every $1 spent on prison industry programs, as much as $6.23 is saved in future criminal justice costs (arrest, conviction, incarceration, post-release supervision and crime victimization).

FPI also supports private industry. Approximately 75 percent of FPI’s revenues are spent on purchases of raw materials, equipment, services and supplies from private-sector companies. In fiscal 2003, FPI purchased approximately $497 million of raw materials, supplies, equipment and services from businesses. More than 53 percent of FPI’s procurements were from small businesses, including businesses owned by women and minorities, and disadvantaged businesses.

The debate about the FPI program should focus on the quality of life for law-abiding citizens, particularly those in communities to which these inmates will return. With that thought in mind, a reasoned analysis may only conclude that any effort to reduce or restrict the FPI program is not wise public policy.