The Return of Commercial Prison Labour

Anil Shah

Christoph Scherrer

Prisons are seldom mentioned under the rubric of labour market institutions such as temporary work contracts or collective bargaining agreements. Yet, prisons not only employ labour but also cast a shadow on the labour force in or out of work. The early labour movement considered the then prevalent use of prison labour for commercial purposes as unfair competition. By the 1930s, the US labour movement was strong enough to have work for commercial purposes prohibited in prisons. In the decades following, the number of prisoners decreased to a historic minimum. But with cutbacks in the welfare state, the prison population exploded from about 200 000 in 1975 to 2 300 000 in 2013 (Scherrer and Shah, 2017: 37) and prison labour for commercial purposes became legal again. Today, about 15% of the inmates in federal and state prisons perform work for companies such as Boeing, Starbucks and Victoria’s Secret. Migrants detained for violating immigration laws are one of the fastest growing segments of prison labour. Under the Trump administration, their numbers are most likely to increase.

Using the example of the US, we will discuss drivers of the return of commercial prison labour.

Is American capitalism running out of steam? Comparative insights from the Great Depression and the Great Recession

Maria N Ivanova

From 2007 to 2009, the United States (US) experienced a major financial and economic crisis, a ‘Great Recession’, whose depth, severity, and global impact evoked numerous comparisons with the deepest structural crisis of the twentieth century – the Great Depression of the 1930s. There are significant similarities between the circumstances and dynamics surrounding both crises. And yet, those similarities should not distract from even more important differences.

The boom and the bubble: then and now
The Great Depression and the Great Recession were triggered by asset-price bubbles – a stock market bubble in the late 1920s and a housing bubble in the 2000s – but pre-existing structural imbalances in the US economy were the reason why the burst of speculative bubbles induced a general economic collapse. One fundamental imbalance was the highly unequal growth of property income relative to labour income. The combination of relatively stagnant labour income and surging corporate profits played a leading role in the run-up to the downturns and was chiefly responsible for the slow recoveries. The boom and the bubble in both instances were driven by similar dynamics: sluggish wage growth and falling labour share of national income, deepening inequality with heavy concentration of wealth gains at the top, corresponding mounting indebtedness among lower- and middle-income households, surging corporate profits and a corporate saving glut seeking financial ventures. Thus, two causal mechanisms underlay the structural fragility of the economy then and now. On the one hand, the stagnation of labour earnings represented a key factor behind rising income inequality and a drag on consumption which was temporarily alleviated by credit expansion; hence, the rising household debt levels which eventually became unsustainable. On the other hand, rising corporate profits created an overhang of idle money, eager to lend itself to speculative ventures, which played a key role in fuelling the stock market bubble of the 1920s and the housing bubble of the 2000s.

Reflecting on electoral catastrophe: What lessons can we take away from the victory of Trump?

Peter Evans

Trump’s minions have already made it clear that organised labour will be among their immediate targets. Public sector workers, who are the main pillar of organised labour’s strength, will be attacked early. Turning the National Labor Relations Board into a thoroughly anti-labour organisation will make union certification, via officially sanctioned elections, close to impossible. Another obvious agenda item is a national ‘right to work’ law which will remove the requirement that workers represented by a union pay membership dues. I will not try to exhaust the list of likely attacks here, although projecting the disastrous details of Trump’s regime will be a crucial part of figuring out how to mount some kind of defense.

Trying to think about how it might be possible to change the political landscape is a different sort of task. It requires a careful debate on the structural circumstances that produced so many Trump voters. Theories of ‘The Trump Voter’ abound, and sorting them out will require a careful analysis of exit polls that has yet to be done. But two preliminary themes have already emerged. 

Trump and the Losers of Globalisation and Modernisation

Thomas Greven

Donald Trump clearly lost the popular vote and will only inhabit the White House because of the anachronistic and undemocratic institution of the Electoral College, once specifically designed to foil populists like him. Contrary to claims that he somehow ‘hijacked’ the Republican Party, I argue that he simply used the traditional Republican playbook to the extreme - dividing the population along racial, ethnic, and religious lines as well as exploiting anti-elite sentiment – to sell economic and social policies that will hurt the majority of Americans. This got him support from right-wing extremists in the Alt-Right movement as well as the white working class – Americans without a college education – and surprisingly also from white working class women, given that he tried very hard to offend all women. This latter group of voters, previously either non-voting or marginally part of the Democratic coalition, was the key group for Trump’s success in the old industrial heartlands now called the rust-belt states. It is necessary to ask why this group supported him.

‘Carwasheros’ unionise in New York City: community-labour partnerships and the challenges of organising a runaway industry

Carwasheros on strike in Park Slope, Brooklyn
(Photo Credit: Center for Popular Democracy)

New York City carwashes harbour some of the most exploitative labour practices in the city. State law sets carwash workers’ hourly minimum wage at nearly three dollars below the state minimum – US$7.25 per hour in 2012, when carwash workers began organising. Employers are expected to pay workers the difference in tips, but minimum wage violations are rampant in this cash-run and largely unregulated industry. A 2008 New York Department of Labour report found 78% of investigated carwash operators violated minimum-wage laws, depriving workers of more than US$6.5 million (Smith, 2008). Compounding already precarious working conditions, many carwasheros, as some workers call themselves, are undocumented immigrants, a vulnerability employers prey upon by threatening to call immigration when workers begin to organise (Center for Popular Democracy, 2013).

Reconfiguring the US Auto Sector: Lessons from Germany

John Cody

Advocates of neoliberal policy believe that flexible workforces, looser regulations and less government will lead to stronger economies and a better environment for business. Within the US, many such policies have been put into effect with disastrous consequences for the labor market and industry. Even beyond the US, there are claims that all countries are converging into one homogeneous neoliberal set of actors due to globalization pressures. However, in contrast to such assertions is the case of Germany, which features a relatively secure and well-paid manufacturing workforce that fuels one of the largest export surpluses in the world.

Germany’s automobile manufacturing sector provides a pertinent example as to how workers can have both fair wages and decent work while sustaining companies that generate far more profit than US automobile producers since the 2008 crisis. Germany’s comparative advantage in automobile manufacturing has much to do with its institutional arrangements, all markedly different from those in the US. These institutional arrangements touch on a broad range of areas, including worker training, union power, co-determination and social welfare provisions. Due to labor's position as an institutional stakeholder, Germany has ultimately seen reduced conflict between employers and employees and fostered a competitive workforce to produce in-demand vehicles.