Starbucks admits its contractor uses prison labor

By Erica C. Barnett, <ebarnett@seattleweekly.com>, Seattle Weekly, 27 December 2001—2 January 2002

MOST PEOPLE assume that prisoners, especially those convicted of felonies like rape and murder, spend their days stamping license plates, making furniture for state offices, and digging ditches along state highways for 25 or 30 cents an hour. So it may seem a bit odd that Steven Strauss, until last August an inmate at the Twin Rivers Corrections Unit in Monroe, says he spent his last Christmas holiday packaging brightly colored bags of chocolate-covered Starbucks coffee beans and Nintendo Game Boy systems that would end up under Christmas trees across the country.

Twin Rivers, part of a four-unit prison that houses mentally ill inmates, high-security felons, and participants in the state’s Sex Offender Treatment Program, is also home to one of three facilities operated by Signature Packaging Solutions, one of 15 private companies that operate within the state prison system and use inmate labor to supplement their outside workforce. The majority of the workers are hired for big jobs, which come around holiday times, says Strauss, who was sent to Twin Rivers in 1997 on drug and firearm charges. We used to [package] all Starbucks’ coffee for the holidays. With Nintendo, we would do all their overflow, everything from Game Boys to [games like] Super Mario Bros. and Donkey Kong. The work was dull, tedious, and repetitive, but it paid at least minimum wage (currently $6.72 an hour, a sizeable increase over the state prison standard of 35 cents to $1.10 an hour).

In a statement, Starbucks public affairs director Audrey Lincoff said Starbucks is aware that Signature uses inmate labor and believes its contract with Signature is entirely consistent with our mission statement, which says the company will respect others, contribute to the community, and embrace diversity. Nintendo did not respond to requests for comment.

Since 1983, when a commercial clothing assembly line at the Washington Corrections Center for Women marked the first private venture into the Washington prison system, the program has expanded and evolved into the largest private-sector prison employment program in the country. Washington State Department of Corrections (DOC) officials bill it as a revolutionary rehabilitation and job-training program. It’s also a revenue generator, providing room and board, legal expenses, and money for crime victims that the state would otherwise be required to pay itself. There’s a benefit to the inmate, there’s a benefit to the state, and there’s a benefit to you and me as taxpayers, summarizes Doug Edlund, co-owner of Monroe-based Signature.

The mission is to give offenders, if nothing else, a work ethic and experience mirroring some real world experience, says DOC’s Cathy Carlson, who oversees the program. When offenders are engaged in employment, they’re mentally out of prison that eight hours a day.

The corrections department, Edlund adds, has little or no problems with the inmates that are in this program, who must have a GED and a spotless disciplinary record to even be considered for an interview.

OTHERS SUSPECT that DOC’s motives are more pecuniary than pure-hearted, noting that by shaving nearly 50 percent off the top of an inmate’s paycheck, the department slashes its own expenses while subsidizing the companies in the program, which aren’t required to pay for inmates’ health insurance or retirement. They figure that if somebody’s sitting around, doing their time and doing nothing, they don’t make any money off them, Strauss says. They would much rather have you working, especially in a minimum-wage job.

Richard Stephens, a Bellevue property-rights attorney, is suing DOC on the grounds that the program is unconstitutional, allows businesses that use prison labor to undercut their competitors’ prices, and unfairly subsidizes some private businesses at the expense of others. His case heads to the state Supreme Court on Jan. 31.

Stephens says the company his clients are targeting, a water-jet cutting operation called MicroJet, paid minimum wage (at the time, $5.75 an hour) and offered no benefits for jobs that pay between $14 and $20 an hour outside prison walls. Of his seven clients, all MicroJet competitors, two have gone out of business and others are about to, because the one company that gets to operate within the prison system can seriously undercut their prices, Stephens says.

Edlund denies that his company undercuts its competitors, noting that federal law requires companies to pay the prevailing wage for positions within the prison system. You don’t get the labor for free, he says. Signature also offers paid vacation and holidays, when inmates can have visitors, make doctors’ appointments, and visit with their lawyers on company time.

But Paul Wright, a prisoner and the editor of Prison Legal News, a newsletter focusing on prison-related legal issues, likens the program to border maquiladoras, where Mexican workers, often child laborers, make clothing, sporting goods, and other products for subminimum wages.

Companies, like some advocates of prison labor, justify the practice by pointing out that the workers are making more than they could have in their impoverished rural villages, even if the pay is minimal by U.S. standards. You could make $55 a month doing janitorial work, or you could make $150 a month working for an outside business, Wright says. Private businesses are paying prison workers less than they’re paying on the outside, but they aren’t reducing the markup to the consumerthey’re pocketing the profits.

Another key difference, Wright notes, is that prisoners can just be sent back to their cells whenever business goes through a lull; on the outside, they have to lay off workers. It’s much more difficult, Wright says. Strauss says employment at Twin Rivers was cyclical and sporadic. When the economy started to go down a little bit, there was no guarantee that they would work you, Strauss says. They’d work these guys really hard for the holiday season packaging coffee, and then some people wouldn’t work for eight months straight.

Carlson and Edlund deny this, noting that Signature has a contract for a minimum of 80 prison workers at a time, but Carlson acknowledges that during the holiday season, there’s even more employment.

Attorney Stephens believes the system is a PR nightmare in the making. A majority of people don’t even realize that these products are being manufactured by prisoners, Stephens says. They need to know that they are buying these products from a company that is basically getting rich off prisoners. Wright, sent to Twin Rivers for first-degree murder in 1987, believes parents would be disturbed to know that their child’s GameCube was packaged by a murderer, rapist, or pedophile. These companies spend a lot of money on their public image, Wright says, but then they’re quick to make money any way they can.