Source: San Jose Mercury News Author: Melanie Eversley, Mercury News Washington Bureau Contact: Pubdate: Fri, 26 Dec 1997 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.