BIRMINGHAM, Ala.: Prison labor is back

With a rising prison population and a state budget crisis, Alabama has been contracting-out people in jail to a furniture maker and a telemarketer. Prison labor, once outlawed, is back with a vengeance.

U.S. Disadvantaged Industries, Inc. (USDI) employs three disabled workers and more than 50 women from Tutwiler Prison, paying them between $6.50 and $8 dollars an hour. The state takes 40 percent of the prisoners’ wages. The three disabled workers package products, like pot holders and ironing board covers, made by blind people in Pennsylvania. The women from Tutwiler sell the products over the phone via telemarketing.

Taffenee Frazier was on work release from Tutwiler to USDI and worked as a telemarketer for three months. She blew the whistle on USDI when she discovered that they were targeting senior citizens and selling a mop and broom set for $53, an ironing board cover for $30, and a U.S. flag for $40. The estimated mark-up was 1000 percent. “It was older people. C’mon, have a heart sometime,” Frazier said. She was fired and sent back to prison. She served the rest of her sentence for drug possession and now works at Waffle House. At USDI and Tutwiler prison, however, it’s still business as usual.

DETROIT, Mich.: Millionaires and unemployment

Home to the Big Three auto corporations, K-Mart and oodles of auto parts companies, Detroit now reports that the average corporate executive’s pay in manufacturing and retail skyrocketed 17 percent in 2002. The Detroit Free Press released a study of the top 50 executives and found that the average take-home pay for a top executive in that state was $5.4 million in 2002 alone. Reported earnings of these 50 men, not enough for a professional football roster, totaled $269.4 million. The average auto worker would have to work on the line for 100 years without missing a day, starting when the first Model T rolled off, to make that much money.

Richard E. Dauch, CEO at American Axle and Manufacturing Holdings, topped out the list, stuffing a cool $27,594,886 into his pocket in 2002.

Chuck Conway led K-Mart for two years. The company declared bankruptcy in January 2002. Conway walked away with a total of $25 million, $7.6 million of that paid after the corporation went into Chapter 11. How’s that for “merit pay”?

Meanwhile, Michigan is slashing and burning human services to make up deepening budget deficits. Currently, unemployment is officially 6.2 percent. Since 2001, 151,700 Michigan workers have lost their jobs and 47,600 have exhausted unemployment benefits. Thirteen percent of all Michigan children are living in poverty.

BUFFALO, N.Y.: When empowerment means exploitation

In the 1980s, with distressed communities popping up throughout the “Rust Bowl” from Birmingham to Duluth, then Buffalo Republican Congressman Jack Kemp came up with an idea to re-vitalize former industrial areas with state investment and tax breaks in so-called “empowerment zones.” Since 1986, when Buffalo broke the ice, about 40 states adopted the scheme.

A recent exposé by the Buffalo News has now revealed the reality of empowerment zones in the place where it all got started.

There are 500 companies in Buffalo receiving subsidies. Of that group 66 percent failed to hire the stated number of workers and 33 percent actually laid-off workers. The jobs were supposed to pay $10 an hour, nearly $3 an hour below the region’s median wage. Minority-owned firms account for just 5 percent of the companies despite the fact that 46 percent of the city’s population is minority. The tax breaks to these companies cost New York State $200 million a year in lost revenue. According to the business people involved in the enterprise zone project, the zones did nothing to hire economically disadvantaged workers. Instead of rebuilding manufacturing (Buffalo was a big steel town), law firms signed up in droves. Twenty-two law firms are in the program, including eight of the 14 largest in the state.

Another example is the redevelopment of a former department store into 29 apartments and offices. For that $240,000 tax break, two Buffalo residents will work there as security guards at $6.50 an hour.

National Clips are compiled by
Denise Winebrenner-Edwards (