According to a new report released today (Thursday, May 2) by a University
of California, Berkeley economist, the products and services provided
by state prisoners benefited Californians in fiscal year 1997-98 to
the tune of $151 million in direct sales, leading to spinoff effects
of $230.1 million in total sales.
"People don't usually connect positive economic impacts with inmates,
but this report shows how much the prison industry contributes to the
state economy," said report author George Goldman, a cooperative extension
economist at the Department of Agricultural & Resource Economics at
UC Berkeley's College of Natural Resources.
"When the PIA purchases wood to make furniture or grain to feed the
chickens on a farm, it has the ripple effect of generating sales, jobs
and income in other industries in California," said Goldman, who used
records of PIA farm and factory operational expenses in his calculations.
"Then the workers in those industries and the civilian employees at
the PIA go out and spend their wages at local restaurants, movie theaters
Goldman pointed out that in terms of sales, the PIA is the largest
state prison work program in the country. He also found that the agency
generated $142.4 million in personal income.
Statewide, 3,000 jobs were connected to purchases made by the PIA,
which commissioned the study. In addition, 7,000 inmates worked for
the PIA, earning 30 to 95 cents per hour. Up to 20 percent of an inmate's
wages is deducted for court-ordered fines and is transferred to the
Crime Victims' Restitution Fund.
Prison industry officials say the work programs not only help inmates
develop useful job skills, they provide a positive outlet for inmates
who would otherwise be unable to make an economic contribution to the
state, a factor the report's analysis takes into account. The programs
have the added benefit of reducing prison violence by keeping inmates
productively occupied, said Frank Losco, PIA spokesman.
According to state law, the PIA may only sell its products and services
to government agencies. The California Youth and Adult Correctional
Agency is by far the PIA's biggest customer, buying about half of the
goods made by the inmates every year.
Goldman said that many of the products manufactured by the California
PIA would probably otherwise come from out-of-state regions. "This
is particularly true for metal, wood and paper products, which would
likely come from the Midwest states if the PIA were not manufacturing
them here," he said. "The PIA benefits California by keeping money
in the state."
Expanding upon a similar analysis of the state prison industry released
in 1998, the new report for the first time examines specific impacts
for eight economic regions in the state, including the counties in
the Bay Area, San Joaquin Valley and Southern California.
Of all the regions, the San Joaquin Valley felt the largest impacts
from the prison industry with more than $49.5 million in sales and
812 jobs in the local economy. Agricultural products - including eggs,
milk and almonds - represented the largest category of goods produced
and sold in that region.
On the other end of the spectrum lies the Northern California region,
which includes the counties of Del Norte, Humboldt, Mendocino and Trinity.
That area saw a combined impact of $2.7 million in total sales and
Southern California and the southern border regions, including Los
Angeles, San Diego and Riverside counties, had a combined impact of
$24.5 million in total sales and 352 jobs.
The Bay Area region, from Sonoma to Santa Cruz counties, fell in
the middle with a combined economic impact of $13.6 million in sales
and 200 jobs. Products manufactured by the PIA in the area include
mattresses, furniture and eyeglasses.
PIA officials said the economic impact tends to be greater in regions,
such as the San Joaquin Valley, with a relatively high concentration
of prisons with industries.
Overall, the work programs reach out into more than 65 service, manufacturing
and agricultural sectors at 23 prisons throughout the state. "The products
and services go far beyond license plates," said Goldman.
The report was co-authored by Vijay Pradhan, a senior statistician
with UC Berkeley's Department of Agricultural & Resource Economics.