Andrew Cuomo fights ‘Price Gouging’ With Prison Labor
Article from For Liberty by Norm Leahy.
New York Gov. Andrew Cuomo is tackling what he sees as price gouging in the hand sanitizer market, introducing a line of state-manufactured product that will be provided free to schools and local governments.
How can the state provide this free product? By using prison labor to make it – and paying wages as low as 16 cents an hour:
NYS Clean is being produced by Corcraft, a division of the state prison system that uses inmate labor to manufacture products to sell primarily to state and local government agencies.
At 13 prisons across New York, Corcraft produces a wide range of products, from metal products at Albion to mattresses and pillows at Eastern to textiles at Clinton and Coxsackie.
The program generates tens of millions of dollars in sales, in part because it is considered a “preferred source” provider, meaning state agencies can purchase goods from Corcraft without putting out a contract for bid.
Corcraft employees – all inmates in state prison – are paid a starting wage of 16 cents per hour and a maximum wage of 65 cents per hour, according to the Department of Corrections and Community Service.
They can also earn a bonus of up to $1.30 a day for productivity.
The hand sanitizer is being produced at a maximum-security facility that is already in the business of “making various cleaning solutions for janitors and chemicals for vehicle maintenance.”
And while we’re looking at the state’s lucrative captive labor supply…
New York’s prison-labor system has long been criticized by reform advocates, who note the hourly wage hasn’t risen for state inmates since Cuomo’s father, former Gov. Mario Cuomo, was in office in the early 1990s.
For a refresher on what prices tell us, and what prison labor pols miss, check out this piece from Prof. Steve Horwitz on how “emergencies provides a unique opportunity to explore some of the most fundamental ideas in economics.”
Image Credit: By Alex Proimos from Sydney, Australia; cropped by Beyond My Ken (talk) 00:05, 29 August 2014 (UTC) (Broadway Crowds) [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons