In 1924, Arthur Davenport, chairman of the Advisory Committee on Prison Industries, stated, “The effect of placing on the open market a volume of goods that have been produced below normal costs is to lower prices and disorganize the market. . . . The increase in prison production, which is predicted, will exaggerate this evil.” This sentiment toward inmate labor prevailed in the following decade. During the economic slump of the Depression Era, Congress outlawed the interstate transportation of products manufactured by inmates paid less than the minimum wage.

However, due to the recent prison population boom, Congress has established programs to bring private enterprise back into federal prisons. One estimation concludes that in the year 2000, correctional industries’ sales would exceed $8 billion.

Supporters of inmate labor claim that inmate earning power is needed to subsidize the spiraling costs of the U.S. prison...