PRISON LABOR CAUSES A STIR AS A SOURCE OF UNEMPLOYMENT

Manufacturers Say They Are Losing Jobs, Profits

With inmates at 72 federal prisons crafting hundreds of millions of dollars
in pajamas, desk chairs and other products, American manufacturers are
complaining prison labor is stealing their jobs and profits.

The idea that some workers, whose taxes pay to keep an inmate in jail,
might lose their jobs because of prison labor ``just doesn't sit well with
us,'' said Douglas Brackett, executive vice president of the American
Furniture Manufacturers Association in High Point, N.C. Furniture makers
especially have rallied around a bill introduced last month by Rep. Peter
Hoekstra, RMich., that would stamp out an advantage enjoyed by Federal
Prison Industries a requirement that federal agencies shop first with
the inmate program, even though the goods aren't always cheaper or better
made.

``Plain and simple, (the program) takes job opportunities away from
thousands of honest, hardworking Americans,'' Hoekstra said.

But advocates of the industry behind bars say it teaches inmates a skill,
while helping to defray the cost of their incarceration.

It also keeps a lid on tensions made worse by the crowded conditions in
federal penitentiaries, advocates say. Overcrowding in federal prisons has
nearly doubled since 1990, from 58,021 inmates to 101,648 as of last month,
according to the Justice Department.

``If inmates sat around with nothing to do, we'd have a potentially very
inflammatory situation,'' said Ira Kirschbaum, general counsel for FPI, the
Bureau of Prisons' industrial conglomerate. The jobs program not only helps
control and manage the inmate population in a productive way, he said,
``It's teaching a work ethic get up on time, work all day long, do a
good job.''

The program was launched in 1934 to teach inmates skills they could use
after their release from prison. Private industry and labor unions
initially supported it. But that support has waned as the program has grown.

More than 18,000 inmates earn about $1 an hour making furniture, uniforms,
housewares and dozens of other items offered under the name UNICOR through
catalogs to federal agencies.

By law, the agencies are required to go to the prison program for those
goods unless the company issues a waiver saying it cannot meet the
procurer's requirements.

The program has generated about $600 million in gross sales so far this
year. During one recent sixmonth period, FPI sold nearly $5 million in
cabinets, lockers and shelving to the General Services Administration, more
than $300,000 in draperies, awnings and shades to the Department of
Veterans Affairs, and nearly $250,000 in nightvision equipment to the
Department of Defense.

Despite the program's expansion, private industry still accounts for most
of the federal government's purchases, observed Steve Schwalb, FPI's chief
executive officer. Last year, the federal government bought 18 percent of
its office furniture from FPI and 82 percent from private companies, he said.

``They like to say they want to level the playing field,'' Schwalb said of
manufacturers who support such legislation. ``Our contention is the playing
field is already uneven and it's against us, not in favor of us.''

Private industry is asking too much when it expects FPI to compete the same
as everyone else, Kirschbaum said. It's not exactly a business where
efficiency is the ideal.

One maker of office furniture, Steelcase Inc., of Grand Rapids, Mich.,
estimated the prison program has leveled some damage. ``We'd have another
$7 million to $10 million in sales a year'' if it weren't for the program,
said Marsha Goodman, director of government market sales for Steelcase.

Responding to concerns about cost and quality, the Senate authorized a
study in July on how to make the prison jobs program more competitive. At
the same time, it shot down an effort by Sen. Carl Levin, DMich., to allow
federal agencies to accept bids for their contracts from the private sector.

What especially galls those in the furniture industry is the government
supports a program they view as the enemy.

``Here we have a government corporation aiming at momandpop America, the
business our government is supposed to be helping prosper,'' said Brad
Miller, manager of government affairs for the Business and Institutional
Furniture Manufacturers' Association in Grand Rapids, Mich.