Iowa's Prison Industries & the open market

Is the program needed rehabilitation or an unfair monopoly?

Mike Wiser
Published: March 17 2014 | 3:30 am - Updated: 1 April 2014 | 9:42 am in

DES MOINES — Bob Simonsen said the state froze him out.

Simonsen is the longtime sales manager at RJ Thomas Manufacturing in Cherokee. Founded in 1959, the 65-employee company makes campground equipment — the kind you see when you arrive, such as a picnic bench or flip-top grill, not the kind you carry in — and he then sells it across the country.

But it doesn’t sell to Iowa’s state parks.

“We used to, but then we were told the waiver process became too long and too frustrating for the state campgrounds and parks, so they just weren’t going to do it any longer,” Simonsen said.

The waiver he’s referring to is from Iowa Prison Industries. Prison Industries employs the state inmate work force that produces items ranging from desks to signs to graphic arts services for sale to state agencies and not-for-profits.

With a few exceptions, if Prison Industries makes an item, state agencies are required to buy it from them. The exceptions include emergency situations and purchasing from small businesses for contracts of less than $10,000. Agencies also can ask Prison Industries for a waiver to the requirement.

Prison Industries was built on the idea that if prison inmates learn a marketable skill by the time of their release, they are more likely to find a job after their release and less likely to reoffend. It seems to work, too. Ex-convicts involved in Prison Industries have a recidivism rate of 4.9 percent compared with 35 percent for those not involved, according to a 2006 state study. It’s also self-supporting in that the items Prison Industries sells support its continuing operations.

Still, the requirement rubs some Iowa manufacturers the wrong way. They think Prison Industries should compete in the open market, and they have found a sympathetic ear among Republicans.

“We all recognize there has to be useful work in the prisons for rehabilitation purposes,” said state Rep. Guy Vander Linden, R-Oskaloosa. “But I don’t think we should unilaterally exclude private industry from at least bidding on the contracts. … This isn’t just a few rough-hewn chairs they’re making. If you go to their website, it’s a little bit like going to Walmart.”


"I’m sitting on a Prison Industries chair right now,” Danny Homan, president of the American Federation of State, County and Municipal Employees Council 61, said into the phone. “My office is full of Prison Industries furniture.”

It might seem odd that the head of union would back an organization like Prison Industries, which pays its workers between 40 cents and 90 cents an hour, but Homan’s AFSCME group has long supported it.

“Do I always like how they get things done, no,” he said. “But over the years, we have come to work with them when we’re able to.”

Yes, Homan said, he would like to see the items the inmates make made by union workers with good wages instead of prison labor, but he doesn’t think that’s where the work would go.

“It would probably be made somewhere overseas,” he said. “We have Prison Industries for a reason, and we ought to use them.”

Vander Linden’s committee on state government moved a bill this year changing the way waivers worked. It was a watered-down version of earlier legislation backed by the Iowa Association of Business and Industry that eliminated the specialty purchase requirements benefiting Prison Industries.

“The Prison Industries director has, in essence, veto authority over whether any state agency can go outside the Prison Industries to order their stuff,” Vander Linden said. “I think that discriminates against a lot of small businesses in Iowa.”

The bill would have given the authority of the waiver request to the Department of Administrative Services, instead of Prison Industries. Association of Business and Industry lobbyist Nicole Crain said Prison Industries “is obviously the entity that’s benefiting from getting the work, and I don’t think it’s an unbiased entity making that decision.”

It passed the House on a party-line vote.


State Sen. Jeff Danielson, R-Cedar Falls, said the bill didn’t solve the philosophical differences the business community has with Prison Industries operations but “just added another layer of red tape” to the waiver process.

He’s the chairman of the Senate State Government Committee, which would have had to have taken up the bill if it was going to move forward during this legislative session. He declined.

“This is a perennial issue,” Danielson said. “It’s the same tension, right? Do we want a way for inmates to learn a skilled trade that could be productive after they leave by ensuring that the state purchases those products? There’s also evidence this is a positive reinforcement tool for inmates, so you don’t want to diminish that aspect.”

Dan Clark, director of Prison Industries, said given that job training is important it makes sense for Prison Industries to sell its finished products. During a conference call that includes Iowa Department of Corrections Assistant Director Fred Scaletta, Clark stresses several times that Prison Industries is self-supporting and takes no additional tax money from the state.

“We train welders here,” Clark said. “That’s a skill that’s in high demand. If we didn’t sell it, they would just have to weld stuff and throw it away.”

Yes, he said, inmates are paid at a rate way below the minimum wage, but Prison Industries also has other costs — such as security — that traditional companies don’t have. That extra security is covered by the products they sell.

As far as waivers go, Clark said Prison Industries has not turned one down in the past five years. They’ve either granted it or changed the products they have offered to compete with the private-sector price.

Asked if he could compete with private companies without the state protection, Clark doesn’t bite.

“It’s hard to answer because it’s a hypothetical. Part of the cost you have to consider is the rehabilitation aspect,” he said. “I really wouldn’t want to find out.”

Vander Linden said he expects to push the issue again next year.

“It’s a monopoly,” he said.

Danielson agrees, to an extent.

“There’s a solution that has eluded the Legislature for a number of years, and I would admit there is some merit to the idea that it’s not based on competition right now,” he said. “But the trade-off is do we want restorative justice that gives prisoners a chance for a skilled trade? For that, you need a market for their goods.”

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