Small Businesses Complain About Prison Competition

listen:

In a warehouse behind barbed-wire fence, bars and i-d check points, a printing press spits out envelopes for the town of Rye. The man working the machine is closely guarded -- he’s an inmate at the state prison in Concord.

Print shop manager Jim Weaver says prisoners here learn almost all they need to know to get a job when their sentence ends. "Anything you could order from a shop on the outside is pretty much how it goes, we’re trying to give these guys a marketable skill when they get out, and the only way they can do that is to have them running the same types of jobs they would have on the outside."

The state prison runs a print shop, sign shop, furniture shop, tech shop, the list goes on… Correctional Industries Administrator Dennis Race says of the 1300 men serving time, more than 300 work in various industries.

He says it’s for good reason – these jobs help decrease recidivism. "Statistically it’s been studied by the US Department of Justice that an inmate going back into the community with a marketable skill is less likely to return to prison."

Race says that saves taxpayers money. And state correctional industries make about two million dollars a year in sales. That money is pumped back into the prison, and that too saves taxpayers money. Most of the work –about 75% – is for state agencies, cities and towns.

But prisoners are also making products for sale to the public. Sales to private individuals account for almost 25% of business, a four percent increase from 2001. And some small companies say correctional industries are taking their customers away.

"I try really hard not to be outraged because that seems to be non productive but it distresses me," Howard Hoke is C-O-O for Echo Communications, a New London based print shop. He says he’s had two of his customers take their work to the prison.

"It appears that it might be leading towards two percent of our commercial printing sales volume going out the door, that’s fairly significant I think, its enough annual sales volume that I can’t just let something like that go."

Hoke says businesses can count on losing a few customers a year for one reason or another, it’s fair competition. But he says customers are leaving because the prison can offer lower prices. "When the only reason is they could get it done for a third the price and oh by the way it’s the state prison, there’s no competition there’s nothing we can do."

Prisoners wages average around a dollar an hour. The prison print shop couldn’t provide a price list for their products. They say their prices are similar to other print shops. And Corrections Industries Administrator Dennis Race says it would be counter-productive to put private shops out of business.

"We don’t strive to compete with them, it would be contrary to what we’re all about. We want these companies to hire our inmates when they’re released we’d like to partner with them, we’re not in competition with them at all."

But Hoke isn’t the only small business owner complaining about prison industries. In Grafton county, county jail inmates work selling produce at a farmstand on busy Route 10. The stand brought in about $25,000 to the county this fiscal year.

But local farmer Daryl Grasso says their produce prices are way below market value. She owns a stand a few miles away, off route 10, and is leading a fight to get the prison farm stand shut down. "When they first hit the scene the pricing that they came out with completely flattened the local market, all the local farmers and farmers markets were affected, it hit them in the pocket book."

Since then the stand’s pricing policy has changed, says Grafton County Corrections Supervisor Glen Libby. "It’s not less than 10% of the average of what you can get at the local markets, the department of agriculture’s weekly bulletin and farm stands registered with the NH Department of Agriculture."

Customers like Monroe resident Dick Fagnant says he’s seen a difference in prices this year, but says he supports the prison farm stand for other reasons. "I think it’s a good project for the inmates to have, as far as the labor goes, and I don’t feel they’re competing they started this stand when there were no others around."

But Grasso says the new pricing policy is unfair because it uses grocery store prices, which are always cheaper than farm stand prices. And she argues even if prices were the same, a government industry will always have more advantages.

"They don’t pay one cent for the prisoners for working, they have no tax dollars for all the acreage they have, no workman’s comp requirements, so they have all that free labor, and they’re still charging the public for produce, a little or a lot it doesn’t matter, it makes no difference. They don’t belong there."

Grasso’s dispute with the prison farm stand has led state legislators to consider a bill that would stop the sale of products made with inmate labor -- if it competes with private businesses.

Representative Bob Guida from Grafton County co-sponsored the bill. "Is it fair for government to, for the sake of inmates, disadvantage any business. Those people broke the law, they’re certainly entitled to retraining, but not at the expense of the local population that’s already paying their freight."

Several states, including Vermont, Connecticut, and New York limit prison industry sales to state agencies, municipalities, or schools. But state correctional industry administrator Dennis Race says many states are looking to expand industries as well.

He thinks the bill is a bad idea. "Anything that would diminish the sale of our product would be a negative impact to what we’re trying to do, I believe at the end of the day intelligent people will make the right decision."

State Representative Bob Guida says the bill is unlikely to pass as written because it’s far too sweeping. A study committee is currently looking at the bill, and legislators will likely take it up again the next legislative session.

For NHPR news, I’m Amy Quinton.