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.
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