opinion@dailylobo.com
After some struggle, the minimum wage increase will be on the ballot in November. This measure would increase the minimum wage from $7.50 an hour to $8.50, increase the tipped minimum wage to 45 percent of the regular minimum wage and also keep this minimum consistent with the rising cost of living. After dealing with the frivolous issue of a small typo, the ballot initiative was passed through the state Supreme Court four weeks ago and will appear on the ballot.
Some have raised the criticism that this increase would crunch small employers and make it hard for unemployed youth to find work. However, small businesses and the unemployed today face much tougher and more complex problems than a reasonable minimum wage increase.
One of these challenges is the increased use of prison labor in the United States. While historically prisons have been only a small part of the manufacturing sector, making things like license plates, recent legislation such as the Prison Industries Act has allowed incarcerated workers to manufacture a larger variety of things, and also provided for the sale of these products to the private sector. Indeed, prison labor has been greatly expanded to produce such a wide variety of things as military uniforms, solar panels and even processed meats, such as chicken patties.
While this perplexing trend may only seem to be a problem for the prisoners involved, it also has had a great impact on small businesses and unemployment. The use of this very cheap and ethically murky prison labor undercuts small employers and also takes away jobs at a time when unemployment rates are high and finding a job is difficult.
One example of this practice is Unicor. This company operates inside 83 federal prisons nationally and makes an annual revenue of $900 million. This company employs prisoners at wages between $0.23 and $1.15 an hour to do a variety of tasks ranging from call center and help desk support to the making of military apparel and solar panels. With unfair competition from companies such as Unicor, other businesses that manufacture these items, such as Tennier Industries, American Apparel and American Power Source, all had to lay off hundreds of employees. While this is only one example, the trend seems to be on the rise.
Like the effects of outsourcing, increased use of prison labor also raises unemployment, as private sector jobs are taken away and given to companies using this cheaper labor source. On this issue Scott Paul, executive director of the Alliance for American Manufacturing, commented, “It’s bad enough that our companies have to compete with exploited and forced labor in China. They shouldn’t have to compete against prison labor here at home.” This practice is indeed one that threatens small businesses and works against Americans trying to find employment.
This seems to be only one in a long string of practices that cut down American service and manufacturing workers, who have already had a hard enough time as it is. This example is one of the many that endanger small businesses and workers alike. Looking at large economic structural problems facing small businesses today, I feel that a sensible increase in the minimum wage is one of the last things small businesses have to worry about.
