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As I wrote previously here and here, there has been great attention concentrated upon Nevada's use of inmate labor to unfairly compete against other Nevada companies.  As a result of this work, big changes have taken place in Nevada - and hopefully will continue next month...

I traveled out to Las Vegas at the end of January to interview owners of companies and in an attempt to discuss prison labor issues with the NV. DOC Director, his Deputy Director in charge of Prison Industries and the owner of Alpine Steel, Inc.  Owners of competing companies were quick to discuss the unfair advantage given to Alpine, but neither Alpine's owner, Randy Bulloch or either of the NDOC officials returned my calls or email requests to speak with them.

Unfortunately, this is typical in instances where those in support of exploiting prisoners have to speak to the merits of program policies involving using prisoner's labor for private companies. This time, their silence did not keep the Governor, Attorney General or Secretary of State for Nevada from voicing their opinions - most of which were surprisingly negative about the prison industry's operations, lack of effective oversight, failure to follow state regulations and statutes and the impact of those industries upon Nevada's small businesses and the unemployed.

In the articles linked to above, I wrote about the Wet 'N' Wild theme park and Sky Vue projects taking shape in Vegas.  Individuals with great reputations and well known to the public in America are investors in both of these - as well as other projects involving Alpine Steel.  When I called individuals out for investing in a theme park project that was using inmate labor, I was asked again and again "How do you know of the investors and the use of inmate labor was involved in these projects?  Each has denied to us that is the case...what was your sourcing for these claims?".  

The media who had read my Study and articles here on DK and at VLTP.net, tried unsuccessfully to get a response from investors such as Andre Agassi to confirm that prison labor was being used for these projects.  With strong denials from all involved, the journalists were skeptical of my sources.  Even so, I refused to divulge the names of those who I'd spoken to or provided documents to me that I relied on for the Study and my postings - as I had promised them anonymity.

Sky Vue Wheel
Wet 'n' Wild
Wet
Sky Vue from my hotel in Las Vegas - looking abandoned

As I was preparing to tape an interview (click on Feb 3 program to watch) for a local news station in Las Vegas on Friday the 1st, word came in that my information and sources had been correct.  Alpine's owner had just admitted to having the low bid on the Sky Vue Wheel project - as well as having already received the contract for the Wet 'N' Wild job.  With that admission came a disclaimer that there would be no prison labor involved in either of those construction projects.

Checking with Nevada authorities to verify this claim of no inmate labor being used, it was discovered that following the release of my "Study of Nevada's Prison Industries" on January 25th, a decision was made to close Alpine Steel's steel fabrication operation at Nevada's High Desert State Prison complex, disallowing further use of inmate labor by that company.  In addition authorities has gotten a payment plan agreed to by Alpine to repay the state more than $400,000 owed for facility leases and staff salaries.  Alpine was going to have to do what their competitors were doing - hire workers from the unemployed in Las Vegas to fabricate the steel for those two jobs!

When I returned from Las Vegas the minutes of the December Board of Prison Commissioner's meeting had been made public.  At that meeting, the NDOC Director appeared and admitted that he and his department had not been following the laws governing the use of inmate labor or when approving new products or industries.

Members of the Board of Prison Commissioners, are heroes in this battle over the use of inmate labor to disadvantage small business and the unemployed, as demonstrated by the positions taken and the strong pursuit of protecting Nevada's workers:

"Director Cox reported that he testified at the Nevada Legislature’s Interim Finance Committee on Industrial Programs.4 There are three different mechanisms in place to provide oversight of NDOC Industrial Programs. First there is the Legislature’s Interim Finance Committee on Industrial Programs as discussed, second there is this Board of Prison Commissioners and third the Board of Examiners. Director Cox said we are reviewing our Administrative Regulations (AR’s). There is a reference to the Statutes that cover the oversight. After reviewing this at the last Committee meeting it appears that historically, we have never received approvals from the BOP.
We are preparing a draft of an AR.


"Governor Sandoval brought up the issue that inmate labor might be taking away jobs from citizens. DD Connett replied that if Alpine lost the bid that they would be in a position where they would have to lay off employees in their shop in Las Vegas. The Governor pointed out that we don’t want to subsidize private companies to the detriment of other local companies. DD Connett agreed. Regarding the current Alpine contract, he is working with the Attorney Generals office and they have created a repayment agreement with Alpine.

"Governor Sandoval confirmed that until recently Director Cox was not aware that businesses who want to contract with Silver State Industries need to come before the BOP Commissioners as well as the Legislature’s Interim Finance Committee on Industrial Programs. Director Cox will have an AR in place to assure that happens moving forward. DD Connett commented that since James Cox has become Director, no new Silver State Industries contracts have been approved. Director Cox said that the Legislature’s Interim Finance Committee on Industrial Programs is well represented with business and community leaders, labor, and elected officials from various parts of the state."


"Secretary of State Ross discussed NRS’s 209.549 & 209.461 subsection 2.,c. and asked Director Cox if in the past the processes listed within were followed properly. Director said that to his knowledge, they were not however moving forward he will have an AR, written in full compliance of the statutes in place. This will be completed before the next BOP meeting.


"Attorney General Masto requested a list of the current Prison Industries. DD Connett said he will provide it. She discussed the difference between existing and new prison industries and how they are handled. Additional discussion included her concerns as to the intent of the training of inmates within various industries and the affect on current local businesses. She asked if the intent of the industries is training inmates in a vocation so that they would be able to find work upon their release from prison and become a productive part of society therefore lowering their chance of recidivision. Or is a labor force being created (within the prisons) that existing private sector businesses can co-op to the benefit of their needs when they are engaging in an RFP process. She stated that this issue needs further and continued review.

"Director Cox assured that all of the issues brought up today would be further discussed at all three mechanisms in place that provide oversight of NDOC’s Prison Industries.

"Senator Brian discussed the ongoing competition with Alpine Steel that in his view is unfair to other competitors in regards to the labor costs and outstanding indebtedness. Attorney General Masto recommended reviewing current contracts for existing programs. Governor Sandoval said this issue will be examined before, and addressed during, the next BOP meeting."

So it appears even if Director Cox and Deputy Director Connett would not speak with me or acknowledge any of the claims I made in the Study, top officials in Nevada did in fact get "the memo" and decided to take quick and appropriate actions to stop the blatant and deliberate unfair advantages taken by Alpine Steel and other companies having access to the state's prisoner work force.

It isn't simply the failure to notify competing businesses and labor about prison industries or new products, it's the refusal to pay inmate workers the required prevailing wage rate, oversight provided by the National Correctional Industries Association (NCIA) - and fact that Deputy Director Connett is now the Chairman of the Board of the NCIA - that needs addressing.  It is the underlying fact that legislation in each state to allow access to this inmate workforce was written by and lobbied for by the pro-corporate American Legislative Exchange Council (ALEC).  Corporations seeking low wages to increase profits have sought a cheap "American" work force for years.  Through ALEC and the NCIA they have found that labor force here at home.  They will continue to exploit these men and women as long as we continue to look away, refusing to acknowledge that labor is a primary reason for so many American's being in prison today.  This well oiled and quickly growing industry needs new workers for those released from incarceration and as laborers for new factories being built every year and partnered with private companies.

Inmate drilling a steel column in prison shop for Alpine Steel job
Some would consider what happened in Nevada a small victory perhaps, in a larger battle involving the use of inmate labor.  I consider it a huge victory to: inmate workers; competing companies, and; the unemployed all across the U.S.  The effort of lowering costs to private companies with the result of taking jobs away from unemployed non-inmate workers in the community, was just handed an upset at the hands of a conscientiousness state Governor, Attorney General and Secretary of State - looking to protect small businesses and Nevada's workers.  Today there are 1,022 factories in the U.S. prison industrial system...and that represents 1,022 private factories that have closed down and laid off hundreds of thousands of workers.  In Nevada there is now one less factory competing for jobs and profits at the expense of competitors and the unemployed.  That represents one of the few wins on behalf of American jobs.

To give you an idea of the extent of the work being done by Alpine using inmate labor to fabricate the structural steel components - in addition to the theme park and Sky Vue jobs, Alpine currently has several ongoing or just completed jobs that they won through their ability to underbid competitors due to low labor costs:

Desert Inn Mental Hospital project
Fifth Street Bridge over the Interstate

Planet Mazda, Car Dealership

Many of those I spoke with stated they've lost as many as "four or five contracts a year to Alpine" due to the low wage costs.  Each of those lost projects to competing companies represents a half dozen to dozen jobs that could have been filled by unemployed steel and fabrication workers in Las Vegas.  So, the impact is anything but "insignificant" as prohibited by Nevada's statutes on prison industry operations.

Jacob's Trading Company is also using inmate labor in Nevada to repackage refurbished or returned items to retailers such as Wal-Mart - and of course paying the inmate workers less than the wages paid for similar work in the community

Another company, TJ Wholesale is operating out of the prison industries there in Nevada at the same prison as Alpine.  They pay inmates "by the piece" for sorting, punching and repackaging used Casino cards to sell retail to tourists. At their website, this company advertises:

Business Services

"I would like to take this opportunity to formally introduce you to our company; TJ Wholesale is an established company of 27 years with many patented and trademarked products. The new owners have been in the manufacturing/distribution business for the past 30 years. We have manufactured both in the US and abroad to meet our customer’s needs.

"Our connections in China, Taiwan and other Pacific Rim countries are superb.

"We all have traveled throughout the years and created beneficial relationships that will make a wide variety of projects possible. We are looking forward to developing our relationship with your unique company and hope you will think of us on your next project. We are confident that we can meet and exceed your most demanding goals and cost requirements.

"Our unique relationship with a 700 man workforce in Nevada spans 20 years, with a wide and diverse set of industries, some of which include but not limited to:

Card Sorting
Cut & Sew
Printing, Bookbindery, Silk Screening
Embroidery
Draperies
Carroll Shelby Custom Auto Fabrication
Dairy & Ranch Operations (700+ wild mustangs)

Office Furniture
CAD & Metal Fabrication
Auto Paint & Body Work
Auto Re-Upholstery
Custom "Big House" Motercycles (sic)
Truss Manufacturing
Flat & Embossed License Technology
Institutional & Residential Mattresses

"Through our working relationships with our partners, we believe we have the capabilities to fulfill a vast amount of working processes and provide a large array of products. We have access to almost an unlimited workforce with flexible work schedules who are trained and skilled to meet all of our customers’ needs.

"We invite you to explore all the possibilities and opportunities that can benefit both our companies by working together.
Sincerely,

Ronald K. Steiner
VP/Sales
Diamond Mountain Distributors, LLC
Dba TJ Wholesale

This local company was formed 4 years ago and is owned by Diamond Mountain Distributors, owned by the same individual.  Today they hold a new trademark, "Just Vegas" under which they are selling T-shirts and other clothing products.  Are these made with prison labor at Nevada's "cut and sew" industry?  I don't know, but from the look of TJ Wholesale's website, it appears they are operating as a broker or surogate for the prison industry operation, hoping to attract customers for the other products or services offered by Silver State Industries.

Again, this is why prison industry operations are like a huge, rotting onion.  Once you begin to peel back the layers, more and more information is discovered that shows how community jobs are being transferred from workers to inmates.  The entire industry is designed to lower the wages of non-inmate workers while providing companies access to a very cheap and captive workforce.  Nevada represents just the tiniest of glimpses into this secretive operation of providing corporations with cheap labor...labor with no voice, prohibited by law from organizing unions, collective bargaining or requiring annual raises, medical insurance or unemployment insurance premiums.  Once complaints against Alpine Steel were voiced and a Governor with a conscience looked at the situation, all the other industries, products being made and manipulations being made by Silver State Industry's Deputy Director came into focus.  He and others in authority now want to know whether these programs are really for "training" or as AG Masto asked,

"[I]s a labor force being created (within the prisons) that existing private sector businesses can co-op to the benefit of their needs when they are engaging in an RFP process?"
Today China's cheap labor is not the threat to American jobs - it is the prison industries across the state or down the street.

In one conversation I had in Vegas, a business owner told me that he has to consider the labor rates paid by Alpine to inmate workers when he considers raises to his employees.  Knowing that Alpine is out there paying minimum wage for the same work his company pays wages of between $17.00 and $20.00 per hour for, this business owner fears he could price himself out of bid contention due to the disparity in labor costs.  Currently this company is already losing a half dozen jobs a year to Alpine - due to labor estimates.

In order to compete with Alpine, he would have to reduce wages or the number of workers in order to keep his estimates comparable to Alpine's.  Since none of his workers would be willing to perform skilled work for minimum wage - like inmates working for Alpine - he continues to lose contracts to Alpine.  This story was repeated again and again there in Nevada, and not just by owners of steel businesses, but others involving industries competed against by Silver State's prisoner work force making other products.

So - while what happened in Vegas earlier this month was a victory for Nevadans - there is still a lot of work to be done.  More skirmishes to increase inmate wages to what is required under the law; insistence that all union and labor groups be consulted prior to opening new industries or starting new product lines and; consultation with competing companies who may be affected by competition from prison industry operations.

Realizing that today over 40 states and county jail industry operations are participating in this program making inmate labor available to private companies, one begins to understand the depth of this competition working against small businesses in the U.S.  When UNICOR is added to the state industries, we find that in the more than 1,000 factories competing for business collectively, there are an estimated 600,000 to 1 million inmates working in some type of prison industry.  In any terms that's one hell of a lot of jobs!  Considering that we have millions out of work, prison industry jobs represent a significant number of jobs removed from our non-inmate labor markets.

So it is the combination of jobs lost to inmates added to the contracts lost to private sector companies due to the low wages that together represent a hidden and unrealized impact upon business expansions and the hiring of new workers due to those expansions.  Both employment and growth are depressed in private sectors due to the continuing growth of prison industrial "training" programs.

Again due to the number of states involved, each operating multiple and diverse industries, employment and expansion in the private sectors is curtailed in all competing industries.  Even in those cases where a private company can compete, the labor and wage disparities prevent raises and cost of living adjustments, because neither exist within the prison industrial complex.

As I also reported in my last diary, here Congress just gave the go ahead to UNICOR to begin allowing private companies access to federal prison labor and facilities under the PIE program.  This is going to substantially increase both the number of prison workers and factory facilities available to corporations.  In addition Congress saw fit to approve a repatriation program whereby U.S. companies can bring American jobs back to the U.S....where products made are not being made in the U.S. now.  This repatriation program allows UNICOR to put men and women prisoners to work making those products for private manufacturers in prison factories, earning between $.23 and $1.15 per hour worked.  So the jobs coming back...will be going to prisoners.  This is intended to be the "new face" of American manufacturing in the 21st century.

While our President continues to urge passage of his "Jobs Bill" Act...the GOP supported by the likes of ALEC and the Chamber of Commerce, continue to oppose that legislation vigorously - in favor of providing their corporate benefactors with slave labor instead.  Why hire our unemployed at fair wages, provide them with medical and health insurance, unemployment benefits, paid vacations and paid time off...when a prisoner will do the same work for pennies on the dollar, and by can't complain or seek higher wages?  It literally is a "win-win" for companies involved in industry and services.

Now when a friend or family member asks "where have all the manufacturing jobs gone?" you can answer that question factually and in so doing, help awaken more Americans to this hidden theft of our jobs.

Originally posted to Bob Sloan on Mon Feb 11, 2013 at 02:39 PM PST.

Also republished by American Legislative Transparency Project, In Support of Labor and Unions, and Headwaters.

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