Claims of unfair prison labor practices that black lawmakers have likened to slavery and private businesses have protested as unfair competition are being addressed with new requirements after an investigation by The Greenville News exposed details about the use of prisoners and their lack of pay.
Three businesses that used state inmates for labor at wages of under $2 per hour must now pay at least minimum wage.
South Carolina Department of Corrections Director Bryan Stirling notified the three businesses that they must apply for the U.S. Justice Department’s prison industries "enterprise program" and follow those guidelines, which include payment of at least minimum wage, or they can no longer use inmate labor, Stirling told The News.
One of the companies, King of Carts, had been using inmate labor in the prison system’s lesser-paying "service program" for three years and was paying inmates $1.50 per hour to help refurbish golf carts, The News learned.
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Greenville-area golf cart firms are among those who have questioned the fairness of the state allowing companies the firms view as competitors to use such cheap labor.
“Because of their complaints, we are going to move these companies to the prison industry enterprise program, where they will have to pay minimum wage and have to be certified by the U.S. Department of Justice,” Stirling said. “They will have to make a business decision if they want to continue operating in the confines of the South Carolina Department of Corrections.”
The other two companies are Garrett’s Discount Golf Cars, which operates in Fountain Inn, and Southeastern Equipment, which operates in West Columbia.
Darren Murphy, sales manager for Southeastern, said the company would have no comment on the matter. Officials with King of Carts and Garrett’s could not be reached for comment.
The prison agency's "service program," which earlier this summer employed 315 prisoners, includes inmates who have rebuilt or upholstered furniture for private and public sector customers, made license plates, refurbished golf carts, recycled textiles and assembled meter parts, among other work. Because the work is not considered manufacturing, inmate wages do not fall under federal minimum wage requirements. Inmates earn between 35 cents and $1.80 per hour.
Southeastern paid inmates between $1 per hour and $1.35 per hour, according to the agency.
Black lawmakers have criticized the service program, telling The News earlier this month that they felt the program exploited inmate workers. Some even used the word slavery to describe what was happening. Sen. Karl Allen, a Greenville Democrat and member of the Senate Corrections Committee, recently called for an increase in prison wages, calling them “shameful.”
The prison system operates two other labor programs, traditional and enterprise.
The traditional work program, which has 206 prisoners, includes inmates who produce office furniture, mattresses, apparel and picture frames for sale, mostly to state and local agencies, as well as school districts. Many inmates are not paid, but those who qualify earn between $6.75 and $24.25 every two weeks.
The enterprise program involves manufacturing and pays inmates between $7.25 and $8.30 per hour. There are 815 prisoners employed in that program, according to the prison system, making signs, flooring and other items.
King of Carts advertises itself as one of the “largest remanufacturers of golf carts on the East Coast.”
According to its website, the Columbia-based firm sells new and refurbished carts and golf cart parts, including pre-built carts for dealers.
“We operate off-site refurbishing facilities totaling 80,000 square feet that operate using assembly line techniques, providing golf carts to our partner dealers and dealers all over the United States,” the website states. “We purchase golf carts by the fleet and accessories by the trailer in order to provide fully assembled golf carts to dealers at prices lower than they can build for themselves.”
King of Carts paid the prison agency $269,792 during the fiscal year ending June 30, with $96,216 of that going for inmate wages. The company used 29 workers, according to the agency’s latest inmate labor breakdown. That would mean an average of $276 in pay per month per inmate.
“If you are competing against the South Carolina Department of Corrections at $1.80 per hour, you’re no competition at all,” said Chad Galloway, a vice president of Adventure Golf Carts in Piedmont.
Jim Foster, president of Adventure Golf, said it is difficult to find skilled labor even paying minimum wage, especially in the Upstate.
“You can’t pay people minimum wage, not and do skilled work,” he said.
Galloway, Foster and other golf cart dealers who spoke with The News say they are not criticizing King of Carts or other companies. They just believe it is unfair for the prison system to create a program in which some companies can gain a competitive advantage by using cheap prison labor and overhead.
Stirling has said that firms operating inside the prison, such as King of Carts, pay the agency to lease space for their operations and for the officers needed to watch the inmates.
The enterprise program, which allows firms to make goods using prison labor, falls under federal guidelines that require payment of at least minimum wage and certification that the jobs do not displace currently employed workers in the community.
Galloway says the program requires the inmates be paid a “fair market wage” and consultation with businesses in the same market to validate the impact of prison labor.
Stirling, who became prison director in 2013, said he does not know why King of Carts was allowed to sign a five-year contract three years ago or how the three businesses came to be allowed in the lesser-paying service program.
“That is a question that I have and that will not happen again,” he said, “where they go in under 'service.' They will have to follow the proper rules and regulations to become a traditional PIE (Prison Industry Enterprise) program. If they cannot get proper certification for PIE, then they are not going to be working with the Department of Corrections.”
Galloway says the companies using the system are not breaking the law.
“They’re taking advantage of it,” he said. “How is it legal for a private company to use state-supported, 35-cent to $1.80 per hour captive labor to compete with the open market? That question is the one that has to be answered.”
Brian Babcock, president of Carolina Golf Cars, based in Charlotte, said he agrees with others’ concerns.
“King of Carts didn’t exist five years ago,” he said. “Now they are one of the biggest golf cart dealers around. Their expansion and their disruption of the market is only possible through this program. And the program does not create a fair playing field.”
Stirling said he remains a strong advocate for the prison agency’s labor programs.
“It’s a 10 percent lower recidivism rate,” he said. “These guys are working. It makes our institution safer. They want to be in these programs. They want to work.”