Locked Up & Locked Into Low Wages
New Insights on Subminimum Wages of Prison Labor
Author: Inayat Sabhikhi, National Coalition Manager & Economist at One Fair Wage
Introduction
Consider this - you’re working for close to zero dollars an hour. Your wages have been stagnant for over a decade. You routinely face harassment on the job. Your labor is creating billions of dollars of value that will never be yours to access.
This describes incarcerated workers, locked away and forced to work while in prison. Eerily, it could apply equally to the tipped restaurant worker serving you at your favorite restaurant. Unbeknownst to customers, servers also earn close to zero dollar wages ($2.13/hour federally), haven’t got a raise in decades and face some of the highest rates of sexual harrassment compared to other industries. Both tipped restaurant workers and incarcerated workers are subject to the subminimum wage which has its roots in the legacy of slavery.
A recent report by the American Civil Liberties Union (ACLU) and 13th Forward coalition provides an in-depth exploration of the exploitation of incarcerated workers. What emerges is a completely legal form of exploitation in need for reform, similar to other low wage workers, particularly tipped workers. As we fight for a better future and one fair wage for tipped-workers, we must all draw a firm line in the sand and demand that all workers be treated with dignity and respect.
Legal Exploitation
The conditions of tipped restaurant workers and incarcerated workers are unfortunately, completely legal. The 13th Amendment to the U.S. Constitution, which protects against slavery and involuntary servitude, explicitly excludes those held in confinement due to a criminal conviction. This means that the American prison labor system operates within the law as it enforces prison slavery. Incarcerated Americans work under the threat of punishment, and have no right to refuse dangerous work or to take a sick day. For states that provide wages to incarcerated individuals, the average minimum wage amounts to $0.13, just pennies per hour. The Fair Labor Standards Act of 1938 also included a key exception: while it gave many workers the right to a minimum wage for the first time in the United States, it excluded large employment categories, within which workers of color were chiefly represented. The excluded categories were domestic workers, farmworkers, and tipped workers—who at the time were servers, bussers, porters, and bartenders, all still synonymous with low wages.
Low Wages
As the report shows, incarcerated workers typically earn little to no pay at all. In seven states, incarcerated workers are not paid at all for the vast majority of work assignments. In states that do pay workers, they earn on average between 13 cents and 52 cents per hour. The work is primarily prison maintenance (80%) and public works projects (8%). At least 30 states explicitly include incarcerated workers as a labor resource in their emergency operations plans for disasters and emergencies. Incarcerated firefighters fight wildfires in at least 14 states - for as little as 13 cents an hour without the right to refuse. From these earnings, workers have to pay for their essentials such as sanitary pads and toilet paper. Prisons spend less than 1 percent of their budgets to pay wages to incarcerated workers, who toil to do all the work required to maintain the prison so that it can continue to receive funds to operate.
Compare this to restaurant workers. From 1938 until 1991, the federal minimum wage for tipped workers rose from $0 an hour to $2.13 an hour. Thanks to lobbying from the National Restaurant Association, it was frozen at $2.13 an hour in 1996 and has not risen since then. 16 states still have a federal subminimum wage of $2.13 per hour for tipped workers. The majority of states (26) have a tipped subminimum wage between $2.13 and the regular minimum wage. Most restaurants spend less than 25% of their total cost on wage bills. Technically employers have to ensure that workers get up to minimum wage with tips, but this is impossible to ensure. For an industry with rampant wage theft, a fairer system would be a full minimum wage, with tips on top.
COVID & Subminimum Wages
The lockdown and subsequent reopenings made everything worse for workers. Incarcerated people faced brutal working conditions. As per the report, many were forced to continue working as the rest of the country shut down, and were threatened with solitary confinement and having their parole dates pushed back if they refused to work. Workers in at least 40 states were forced to produce masks, hand sanitizer, and other personal protective equipment during early pandemic lockdowns - even as they often lacked access to these protective tools themselves. Others were forced to launder bed sheets and gowns from hospitals treating COVID-19 patients, transport bodies, build coffins, and dig graves. At five New York prisons, the number of incarcerated workers staffing prison factories increased during the early months of the Covid-19 pandemic.
Meanwhile for restaurant workers - first they lost their jobs overnight, had trouble accessing unemployment insurance because their wages were so low, and were then pushed into hazardous jobs via hasty reopenings. Restaurant workers doubled as public health marshalls during this crisis, tasked with enforcing mask and vaccine mandates on customers, which in many cases negatively affected their tips, and therefore their wages.
The subminimum wage has long forced an overwhelmingly female workforce to tolerate inappropriate customer and supervisor behavior because their income is so dependent on customer tips. Restaurant workers surveyed in December 2020 reported that sexual harassment during the padenmic increased both in quantiy and severity –– becoming life-threatening. Given the power relationships at play, there is rarely recourse for this behavior.
The Bureau of Labor Statistics data revealed that nearly one million workers left the restaurant industry in 2021. Further One Fair Wage surveys have revealed that a majority of workers who remain at restaurants are leaving, citing low wages, lessened tips, and increased hostility and harassment as the primary reasons for their departure. Even as workers leave the industry the opportunities that await them are likely to be similar low wage jobs, such as driving gig work. This burgeoning industry too mutates the idea of tips, paying workers a per task commission and relying on customer tips to pay 40-50% of workers take home income.
Conclusion
As the ACLU report notes, the jobs of the nearly 800,000 incarcerated workers look similar to those of millions of people working on the outside, but are stripped of basic protections and fair wages. Unfortunately, the jobs of tipped workers follow a similar pattern of low wages and harassment. This unacceptable race to the bottom has to stop. Thankfully the indefatigable efforts of workers are showing the way.
Lawmakers need to amend the U.S. Constitution to abolish the 13th Amendment that allows slavery and involuntary servitude as punishment for a crime. The 20 states with similar exclusion clauses in their constitutions should also repeal them. It is good news that three states - Utah, Nebraska, and Colorado have done just this since 2018, and this November, voters in Vermont, Oregon, Alabama and Tennessee will each have the opportunity to end prison slavery in their states.This would pave the way for worker protections for incarcerated workers.
We need federal lawmakers to pass the Raise the Wage Act that removes the subminimum wage for tipped workers bringing them at par with other workers. It also enables an annual indexing of wages to update the now almost century old Fair Labor Standards Act. 7 states already have one fair wage and the 43 states that don’t, could take the lead and pass this legislation without waiting for the federal bill. This November, voters in DC and Portland (Maine) and in Michigan in 2024 will have the chance to give tipped workers a raise and parity with other workers. If it passes this year, close to 40,000 tipped workers in DC will get a raise from the current $5.05 per hour to $15 per hour. In Portland 17,800 workers will get a raise from $6.05/hr to $18 by 2025.
Reversing the race to the bottom into one of increasing standards, is thanks to the efforts of millions of workers who insist on dignity and fair wages. With their stewardship we work towards winning one fair wage for everyone.