GUEST BLOG: Robert Reid – Prison employment schemes unfair for Kiwi workers



In an interview on TV3’s The Nation last weekend regarding the new private prison in Wiri, Corrections Minister Sam Lotu-Iiga described how a commercial contract between prison operator Serco and Placemakers will give prisoners employment and training building house frames.

The Minister said he didn’t know how much the prisoners would be earning; since the contract was a commercial one between Serco and Placemakers, he was not privy to those sums.

He may not be privy to the sums, but he is privy to the Inmate Employment Policy. “[I]nmates are not subject to the same wage rates, rights and remedies as private sector workers”, but an “incentive allowance” is paid, ranging between $0.00 and $1.00 per hour. Prisoners are also excluded from key sections of the new Health and Safety Reform Bill regarding worker engagement, participation and representation.

Corrections Association organiser Beven Hanlon told the NZ Herald that inmates will be paid the same wages as prisoners in other jails, 24 cents an hour. There is no holiday pay, no sick pay and no kiwisaver contributions.

TDB Recommends

That means a prisoner working an eight-hour day will earn less than two dollars.

Many will say that this is appropriate – prisoners are paying off their debt to society, and until that debt has been repaid they shouldn’t be eligible for the same protections as workers in the rest of the economy. But there’s more to it than that.

FIRST Union has members at Placemakers Frame and Truss, and most of the workers there earn around $20 an hour. Demand for the timber frames is high, and Placemakers has to contract out to a number of external suppliers to keep up. Placemakers have indicated to us that Serco will be paid the same amount for timber frames as their other suppliers.

For Placemakers, contracting out makes things easy. Administration costs are lower than if the workers were directly employed; they don’t have to worry about employment relations or health and safety obligations. They also get gain goodwill from doing their bit to help rehabilitate prisoners for the outside world.

For Serco, however, it’s even better. They’re paid the same rate as Placemakers’ other suppliers, and then they pay the workers less than two dollars a day. And they don’t have to worry about the prisoners joining a union or striking for better wages.

Prison labour radically reduces labour costs, and allows them to pocket the rest.

Presumably this is how Serco was able to report to the London Stock Exchange that winning the prison contract for 25 years would net them NZ$31 million a year, while also bringing down the costs to government by 17%.

And, while it hasn’t been suggested yet, Serco’s low labour costs mean they could start offering the timber frames to Placemakers at a lower cost than the other suppliers. If this were to happen, it is conceivable that our members at Placemakers, and workers engaged by Placemakers’ other suppliers, could lose their jobs, undercut by cheap prison labour.

New Zealanders need to think very carefully about this. For many prisoners the training, experience and discipline gained will be of immense value. However Serco is a commercial entity, which profits from paying wages a fraction of what they would otherwise have to in the private sector.

Employment statistics this week show that unemployment is still 5.8%, or 146,000 people. Deals like this one militate against that rate coming down by allowing employers to exploit extremely cheap prison labour rather than creating new jobs for Kiwi workers.

We should also remember that it’s workers’ wages that are used to buy goods and services in the broader economy. That demand is what creates jobs for other workers. Removing spending power from the economy slows the process of job creation.

It is great that men and women going through the NZ prison system will have new skills and be more employable upon their release, but the more commercial deals exploit prison labour, the fewer jobs there will be for them on the outside.

It begs the question: will they have to re-offend to find work again?


Robert Reid is the General Secretary of First Union


  1. Kia ora Robert.

    Highly valid points, cogently made. Clear incentive to create a steady supply of reliable ‘criminals’, superb new way of driving wages to rock bottom.

  2. Nazi Germany also used slave labour. They found that the slaves were resentful and sabotaged the production. The slaves were then punished. Serco is part of a long and shameful history and should be booted out of our country.

  3. An helpful article but no one has yet asked the critical question on this whole subject.

    Neither here nor in MSM have I heard interviewers, so-called, ask the very obvious question: if you’re employing prisoners to do this work, what about law-abiding people outside of prison who cannot find such work and are therefore unemployed? Or even businesses themselves who are not able to do such work because they’re being grossly undercut by cheap prison labour and therefore the businesses lose money? I know of one such business in the past that closed down when prisoners started producing the same product in the local area at much cheaper than market prices, and cut him right out of business.
    Seems the obvious question to ask but no one seems to have enough clues – or gumption – to ask it.
    With the unemployment rate still high I’m surprised Robert Reid didn’t address this question.
    I know it’s a worthy and decent thing to get prisoners prepared for life after prison but should it be at the expense of jobs for law-abiding unemployed citizens and businesses?

    • Isn’t that exactly what this article is saying?

      “If this were to happen, it is conceivable that our members at Placemakers, and workers engaged by Placemakers’ other suppliers, could lose their jobs, undercut by cheap prison labour.”

  4. Thank you for saying this.
    I wholeheartedly agree with your points.
    Slave labor under the guise of prisoner reform is a nasty business and the cool casual ignorance of the Minister is a sight to see.
    Its a very slippery slope – imagine if we had a government that really had it in for the people and made say ‘jaywalking’ or ‘copyright infringement’ a prison offense creating a steady stream of low cost workers.
    I wonder if there is a provision in the TPPA where if we don’t make more prisoners for the private prison system we can get sued for cutting into their profits…?

    • The government will pay to ‘retrain’ prisoners in trades, allow them to study for tertiary qualifications, and yet, any ‘older’ mere beneficiary cannot access the same. Cheap prison labour will cost the law-abiding their jobs. All part of the depressing downward spiral to lower wages and make everyone, employed and unemployed, fear for their jobs and therefore be further exploited by employers. Ultimately, the unemployed will commit crimes, then end up in jail and work virtually for free while the likes of Serco make profits. Neo-liberalism’s ultimate goal – enforced low wages or slavery. Oh well, at least you get three meals a day in jail …

  5. How cunning. Breaking rocks would not make money, making frames is a good idea. If only the profit made would return to the tax payer…….

  6. There is nothing inherently wrong with prisoners doing work, as long as it done on a voluntary or reward basis.
    The question is who profits from that work.
    It should be a combination of the inmates themselves, taxpayers and voluntary organizations. Make it like repaying debt to society for your crimes, learning something new and a bit for yourself at the same time.
    What is not so good here is that Serco, which is basically a multi-national corporation, pockets most of the profits which go god-knows-where and we have very little accountability for it.
    Any time anyone asks any questions about it we are given the same response: no comment, commercial confidentiality.
    This is the real problem with privately-owned prisons – we don’t know what really goes on behind the bars.

  7. There is an option here that would revolutionise punishment. Let’s suppose that all crimes regardless of their nature are punished by a fine, which includes all the costs of bringing the offender to court and the ensuing court case. There is no set time to repay the fine but for a large fine, a prison sentence would be mandatory and the prisoner cannot be freed until it has been paid off. He also pays the cost of food and board.
    The work he does meets Health and Safety standards and his wage is paid for at prevailing rates. The sentence ends when all debts have been paid. The faster The better a person works the quicker he is out. Promotions within the prison work environment time would occur as in any factory, so there is an incentive to work well. The hours worked should be at least 40 hours/week and weekends off are permissible.
    This means that the produce is sold at market rates but there is no profit for the prison, which should simply meet costs. I think that meets all objections.

  8. Enforced incarceration for the profit of a corporate (Placemakers). It just doesn’t get more vile, does it??

    Oh wait, National has prison-loads full of women.

    Add a few dozen visiting Asian and Russian fishing boats.

    $100 a time.

    Should pay for their incarceration in no time at all.

    Of course, when National announces a new policy to prostitute female prisoners, it’ll be announced by female National ministers, just to give it maximum credibility.

    This is where we’re heading.

  9. A really hard one. Prisoners getting some work experience is probably hugely beneficial to not only them selves but the community as a whole. And the cost of doing facilitating this for prisoners will be substantial too. A hard call no matter what side you may be on.

    • Well, no it isn’t, because one thing that is absolutely certain is what is made from doing this should never, not ever, be going into the hands of a few shareholders of a private company and foreign at that. And if it is possible for anything worse for it to do, it is to undercut others in order to provide profit for those shareholders.
      If there is to be a “profit” that should be going back into the hands of those who pay for the costs of incarceration – us, and to compensation of victims of crime, a bit of it needs to go to helping prisoners after they are released

      • On second thoughts, I can see that having prisoners working in the community, with the associated costs, risks and so on is not going to be a money maker. It would be lucky to be cost neutral. Must also remember that having prisoners working is not new at all, its been going on forever. I still see it as beneficial too all. I think some are seeing conspiracy when there really is not one.

  10. “New Zealanders need to think very carefully about this. For many prisoners the training, experience and discipline gained will be of immense value. However Serco is a commercial entity, which profits from paying wages a fraction of what they would otherwise have to in the private sector.”

    Thank you Robert for presenting your position on this, for First Union and other unions, I suppose.

    Indeed, it stinks what goes on, but sadly too few out there seem to bother, in the divide and rule society we now have. “Serves them right”, many will comment, re prisoners to work for such low “pay”.

    Let us not forget, what SERCO also stand for, and are, or at least have been involved in:

    The NZ government should hang their heads down in shame, to make contracts with such a company!

    And for former Labour Party president Mike Williams to virtually praise the new prison and to some degree Serco, he should also hang his head in shame!

Comments are closed.