Time Is Money

Inmates still stamp out license plates, but an emerging corporate ethic is pushing Minnesota's prison industries to branch out, cut fat, and pay peanuts

George Segler is the best-paid employee in the shop where he works, pulling in exactly two dollars an hour for his labors. A soft-spoken 43-year-old with dirty-blond hair, a wispy mustache, and tattoos lacing his sinewy forearms, he spends his days cobbling together cabinets and office tables in the clanky din of a cavernous factory at the Stillwater Correctional Facility. "I try and save a hundred dollars a month or so," Segler says with a shrug. "Sometimes my family needs help."

Since 1993 he's managed to sock away about six grand. That accomplishment is a noteworthy one in a prison economy that is lately riding the wave of both shrinking wages and legal requirements that offenders part with more of their earnings--to cover everything from victim restitution to child support to the cost of their incarceration. Those developments have left many inmates scrambling to scrape together the cash to buy staples like soap and toothpaste, let alone accumulate a nest egg.

Segler doesn't grouse about his pay or, for that matter, his job. "I'm in a leadership position," he offers with a subdued note of pride in his voice. "You know, the opportunities are here to learn a skill. And this is what I want to do when I get out. Some of the guys say they want a job, but they really don't give a shit and they get weeded out." Segler says he likes the work--and his boss Daniel Ferrise says he's good at it. "George is a guy I'd refer to anyone," Ferrise brags. "You keep him busy and he'll produce for you like nobody else."

Producing has been much on the mind of Ferrise these days. A former warden at Stillwater, he now heads up Minncor, the Department of Corrections' prison-industry division, which cranks out some 39 product lines in seven state pens across Minnesota. As the CEO, Ferrise is responsible for meeting a legislative mandate that Minncor become financially self-sufficient by fiscal year 2003. Currently, the operation--which racked up some $20 million in sales last year, mostly to schools, libraries, and government agencies--requires an annual subsidy of nearly $2 million to break even. That situation, Ferrise says, represents a big improvement over the $6-million-plus subsidy Minncor needed in 1995. But a daunting challenge remains, he points out, as the division seeks to strike a balance between the sometimes conflicting objectives of showing a positive bottom line even while employing the maximum number of inmates possible, teaching them skills that may help them on the outside--welding, construction, and the like--and selling well-made products.

With those goals in mind, Minncor has streamlined its non-inmate staff (from 175 in 1995 to 145 now) and instituted various private-sector-style reforms: hiring sales and marketing directors, conducting focus groups, tweaking its product line. And slashing inmate pay. Wages now typically run from fifty cents to one dollar an hour, Ferrise says, with a two-dollar ceiling set for "exceptional" workers like George Segler. "Back in '95, the wages were different across the board from institution to institution," Ferrise recalls. "Some guys were earning forty cents an hour and some were earning $3.50 an hour. That was ridiculously high. We were losing big dollars." Minncor's pay scale for its nearly 850 convict-employees, he adds, remains well above the national prison-system average.

Still, it raises the question: With labor costs so cheap, why isn't Minncor turning a profit already? The answer, according to Ferrise, is complicated. To begin with, he says, running a business in a prison has scads of inherent inefficiencies. As a state enterprise, Minncor must comply with complex purchasing and procurement rules that don't apply in the private sector. When materials are brought to a prison factory, the shipments must be carefully searched for contraband. As those in business ranks are fond of saying, time is money, and delays of one sort or another are endemic in big-house operations.

While inmates may not share, say, the commuting delays of their free-world counterparts, other protocols of prison life--the regular head counts and security searches--eat into the productive workday. All tools, for instance, must be carefully accounted for in the course of each shift. "We don't need a lunchroom full of carpet knives and screwdrivers. So we have to be good at tool control," Ferrise remarks, as he points to a "shadow board" where each tool's special spot is marked by a blackened silhouette, making it easy for supervisors to take note of a missing item.

There are additional considerations as well. A few years ago, Ferrise recalls, Minncor had to cease production of a line of dumpsters after legislators received complaints from a private manufacturer that the use of cheap convict labor represented unfair competition. These days Minncor focuses most of its efforts on delivering products for public-sector consumption: license plates, which are stamped out at the state prison in St. Cloud; rehabbed computers, which are donated to public schools and, according to Ferrise, have provided more than 100,000 Minnesota kids with Internet access; a variety of wood and metal furnishings for offices and prisons; and some real oddball items, like the beaver-dam mufflers that inmates build at Stillwater. (Sold to the Department of Natural Resources, the contraptions, made from PVC and chainlink fence, are designed to quiet the flow of water on partially dammed streams, thus tricking beavers into believing that they've accomplished their mission to flood.) Marnie Kittleson, Minncor's marketing director, underscores another, elemental obstacle in the organization's efforts to get out of the red: "A lot of these guys have never held a regular job before, and a lot of them don't come in with much of a work ethic or good work habits."

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