Unicor, also known as Federal Prison Industries, is part of the U.S. Bureau of Prisons, which has been preparing inmates for jobs after they get out of prison since 1934. they employ over 13,000 inmates. Their wages are as low as 23 cents an hour up to $1.15 an hour. These inmates produce goods for the Pentagon and other federal agencies. For most of us, we think it's a good thing that inmates work and learn a skill. However, the problem is that it is hurting private factories in the U.S who are not on a level playing field with government projects like Unicor.
With very few exceptions, Unicor gets an advantage when it comes to federal contracts over private companies. Seeing that Unicor has a much lower overhead than private companies, they are able to have a much better competitive price.
Kurt Wilson, executive at American Apparel Inc., which is an Alabama company that makes military uniforms, is flaming mad about Unicor. He's been going up against them for twenty years.
"We pay employees $9 on average," Wilson said. "They get full medical insurance, 401(k) plans and paid vacation. Yet we're competing against a federal program that doesn't pay any of that."
Wilson said that he has had to lay off 150 people over the years as a result of Unicor.
Unicor is able to undercut legitimate businesses that have to abide by federal regulations of minimum wage. Also they don't have to provide benefits or pay federal, state, or local taxes. They have a tremendous advantage. The company made over $900 million in revenue last year alone and has 83 factories that make goods in seven industries.
But American Apparel isn't the only company that is riled up over Unicor.
In February Ashland Sales and Service Co. in Olive Hill, Kentucky learned that Unicor was looking to undercut their contract of making windbreakers for the Air Force. The company has been providing windbreakers for the past 14 years. Michael Mansh, who runs the factory, got in touch with Senator Mitch McConnell (R-KY) and informed him of the situation. A public statement by McConnell that urged Unicor to back off from the contract was successful as the following day they did just that.
With 100 employees, Mansh said Ashland is Olive Hill's largest employer. And he said losing the Air Force contract would have shut the factory down.
"That's 100 people buying groceries. We use trucking companies in the town, buy parts and light bulbs there every day," he said. "That's all lost when prisons take away contracts."
Unicor is not required to pay its workers minimum wage and instead pays inmates 23 cents to $1.15 an hour. It doesn't have health insurance costs. It also doesn't shell out federal, state or local taxes.
This is just as small part of why unemployment is where it is. There are at least two questions I would like to ask here. What candidate running for president supports this? After all, everyone is claiming that their presidency is about the economy. It's not, but that's what they are saying. Second, who is actually being punished here, the criminals or employees and private companies who are forced to play by silly federal regulations?
Well let's see which political party is going to deal with this hot potato?Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.