MANAGING COMPETITION AS A PRINCIPLE FOR EFFECTIVE STATE GOVERNANCE: THE QUEST OF THE FREE VENTURE PROGRAM
Dr. Kimberley A. Garth-Lewis
"There's nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. For the initiator has the enmity of all who would profit by the old system and merely lukewarm defenders of those who would gain by the new one."
The Prince, by Machiavelli
The USA government begins with a strong belief in individualism as Alexis de Tocqueville noted: man is responsible for himself. Individualism is free choice and social responsibility. It is by way of competition that we appreciate individual freedom. We encourage competition in school and sports-- to the best goes the spoils. Competition is the driving force of excellence! The quest for government is to manage competition so that it is profitable and produces quantifiable results. The re-invention of government principles (Gaebler and Osborne, 1992) and enactment of the Republican Contract With America (1995) have focused policymakers attention on taxpayer relief, balancing the budget by 2002, eliminating "welfare" and putting people to work, and getting "tough-on-crime." Re-invention concepts have ushered in privatization as one viable solution to helping an entrenched bureaucracy evolve towards effectiveness and efficiency.
During the 1990's, the author researched, organized and consulted policy-makers regarding privatization (or ventures) as a viable alternative to reducing and eliminating wastes in government. The Free Venture model creates a new system of public-private interaction that reduces the cumbersome and costly way justice is administered in the USA. The reaction to uses the private sector, has been fear on the part of the bureaucracy. More than anything else, government employees view the private sector as a competitor that will take over government operations. These fears must be addressed. Improved governance-- the way bureaucracies are structured to administer services to the public-- mean the re-invigoration of democracy. For example, problems facing the administration of justice system are rapid social change and high costs. Youth crime in the USA is up by 4%. There is a 14% increase in young adult offenders committing rapes, and homicide is up 9%. In California, there are more than 250,000 youth per year under care and/or supervision by local and state corrections. Furthermore, the ethnicity of the corrections' population is 80% minority: African-American, Latino (Hispanic) and Asian. The reaction to these factors are expectations of designing a competitive system that produces customer satisfaction (public) and a reduction in cost of agency operation.
This paper will present some of the controversial issues surrounding privatization. There are many challenges facing bureaucracies forming public-private partnerships. The Free Venture program enables us to identify and, perhaps, eliminate some barriers to privatization because this model forces a reduction in bureaucratic "status quo," as it aims to provide the highest level of post-employment preparation services to young adult offenders.
History of Detention Policy
Since midway through the twentieth century, the practice and study of administration of juvenile justice has undergone dramatic changes. In the last 25 years, few of society's institutional arrangements have been scrutinized more closely than the justice system and its administrative bodies: the courts; prosecution and defense; police; corrections; and, juvenile justice. Law enforcement is criticized for not apprehending criminals, the courts blamed for not locking away offenders and not enforcing capital punishment laws, and corrections is scolded for not reforming criminals. Juvenile corrections is lambasted for its inability to eliminate youthful offenders' propensity to commit crime. And while developing detention facilities for young adult offenders is part of the broader history of the penal system and childcare services of 17th Century Europe, throughout the 1800-1900's in the United States, young adult facilities have been poorly designed and operated. The philosophic and legal forces concerning crime and punishment, influenced state practices in child custody and care. It must be remembered that during this period in our history, there was not a clear understanding of the purpose of juvenile detention. Today, we have information that has had plenty of time to flow in and out of circles of academia and practice, to guide juvenile policy towards an instructively entrepreneurial approach to managing and training our young adult offenders. The philosophic premise that underlies progressive government programs is to operate for a profit (help the detention facility become self-supporting) and make youthful offenders responsible.
The biggest surprise, is that efficacy in the system does not just happen because of a blueprint for hierarchy. The Juvenile Court Act of 1903, established a five-tiered social apparatus consisting of private orphanages, mixed almshouses, indentured and apprenticeship work centers, jails and public institutions for youth committed to state care. These highly centralized structures forced administrators to hold tightly to a rigid and command-and-control approach; and, little attention was given to prescriptions for criminal behavior that were beyond the boundaries of harsh punishment.
Faith in the notion that criminal behavior can be modified by imposing long sentences and using principles outlined in the medical, deterrence and rehabilitation models, has proven ill-placed. Indeed, the philosophical settings for ideas on the subject of punishment have markedly shifted since biblical times. For instance, jails are no longer characterized as the following:
"What a spectacle must this abode of guilt wretchedness have presented, when in one common herd were kept by day and night prisoners of all ages, colors and sexes! No separation was made of the most flagrant offender and convict; none of the old and harden culprit from the young, trembling novice in crime...."
Moreover, under the Mosaic Law the death penalty was imposed for adultery and thievery. Today, few are likely to be put to death for adultery; and in postbiblical times, a movement toward treating offenders less harshly is in response to attacks on conventional "wisdom" and practices inspired by fundamental Christian religion. The benchmark period for tracing the legislation creating institutional descendants of state-operated young adult detention facilities, begin with the Elizabethan Poor Laws of 1601 (a compilation of single laws). The Poor Laws received this author's attention as they not only enumerate provisions for the direct care and custody of children, but also specify the relevance of work.
In fact, the Statute of Laboures (1531) and subsequent legislation, was England's way of controlling the scarcity of labor. Poor Laws following the Elizabethan Laws, created large workhouses: "children could be bred up to labor, principles of virtue implanted in them at an early age and laziness be discouraged...and, settled in a way serviceable to the public good."
Present in legislation are references to work and its utility in "re-directing" offenders. Erecting poorhouses and workhouses was considered "proper." In American history, there can be found a keen awareness of the value of work in administering justice.
President Regan's Reform '88 initiative had as a goal the restructuring of governmental operations to more closely resemble practices and principles embodied in contemporary business management. Maximizing the human potential, containing costs, and satisfying the demand for public services are considered important aspects of American governance. Retrenchment in government has meant a new vision and innovation to handle the challenges facing modern government (Osborne and Gaebler Reinvention of Government 1989 ; Drucker, Leader of the Future 1995; Roberts and King, Transforming Public Policy 1996). Third-party government is a new system for delivering products and services to meet the demands of the public. The new entities are comprised of public- and private-sector partners, collaborating to teach and train free and incarcerated adults and youth. Examples of partnerships are set below.
Alternative Ways to Structure Public Service Delivery
1. Creating Legal Rules and Sanctions
2. Tax Policy
3. Regulation or Deregulation
5. Control Management
1. Public-Private Partnerships
2. Non-governmental Efforts
3. Quasi-Public Corporations
5. Tax Incentives and Credits
7. Employee Training
1. Voluntary Organizations
2. Joint or Free Ventures
3. Restructuring the Market
4. Seed Money
5. Innovative Management
A. Employee Training in TQM
C. Encourage competition and risk-taking
Based on Osborne and Gaebler's findings of 36 alternatives to deliver public services, which range from traditional to avant-. For a complete discussion see, Reinventing Government, David Osborne and Ted Gaebler.
There are collaborations between the private organizations and public agencies seizing opportunities to work together to provide public services and goods to citizens. Former Governor Lawton Chiles of Florida said during his 1990 campaign: "We believe the central purpose of state government is to be the catalyst, which assists communities in strengthening their civic infrastructure. In this way we hope to empower communities to solve their own problems."
In like manner, the private presence in prisons has not been totally eliminated, in hopes of achieving cost-savings when and where possible. Private companies provide food and laundry services, staff/management training, and security, and in some areas, they own and operate the correctional facility. For instance, on August 4, 1997, in Kern County, California, a private company announced they are building a private prison. In addition, inmates are greeted and educated by a staff of psychiatrist, guidance counselors, teachers and clergy, who plan the inmate's program, including the sort of education and work to be done. Staff is composed of private and public employees as well as volunteers.
The High Costs of Administering Prisons
It is recognized, yet not widely agreed upon, that in-prison education and work experience determine inmate's post-release employment outcomes. The author's research in this area supports the notion that there is a correlation between in-prison work training and post-release outcomes (see Lewis, Public Private Partnerships, 1993). National prisoner data through 1995 reveals more than 1 million offenders are under correctional supervision; and, over 800,000 adults are in prison. In the California Youth Authority (CYA) facilities, the largest youthful offender agency in the nation, there are 9,000 inmates (or wards). Moreover, the ethnic breakdown is 42% Hispanic, 32% Black, 15% White and 9% are Asian. The changing demographics, crowding and high cost of administering justice, have spurred a movement toward privatization.
The United Stated invest billions of dollars annually in perfecting the justice system to handle bad check-writing, robbery, theft, domestic violence and juvenile delinquency and crime. Government spending on justice services has outpaced spending on space research and technology and nearly equals spending on healthcare. Of every justice dollar spent, an estimated 22 cents is for courts and legal services, 29 cents for corrections and 49 cents for police protection. Corrections has become quite expensive in California. The largest distribution of direct spending on justice services is absorbed by the counties, counties, where 42% of monies are for justice. Nevertheless, the State General Fund expenditures have grown to nearly 30 percent. Figures from the Legislative Analyst Office, California State Legislature, indicate spending on justice in 1985 through 1995, grew three times faster than spending on education and four times faster than spending on health and welfare. Also disconcerting is that upon completion of the massive prison construction project underway in our state, there will still be a need for beds, assuming no change in criminal policy. Moreover, county jails are as overcrowded today as they were in 1994; thereby jeopardizing manageable operational capacity. In the CYA, the capacity of the facility is overcrowded, so that there is difficulty on the part of correctional officers to minimize escapes, preserve peace and prevent prison violence. Finally, inmate education and work programs are adversely affected in overcrowded conditions. In 1990 for example, juvenile courts were sending first-time offenders directly to the CYA. The reason for CYA incarceration is that these youth are committing more serious crimes; they accounted for some 500 homicides in Los Angeles alone. The twelve counties that account for more than 95 percent of all homicides committed by youth represent northern California, including San Francisco, Contra Costa, Alameda, San Joaquin, Sacramento, Santa Clara; and the southern area including Orange, San Bernadino, Riverside, San Diego and Los Angeles. More importantly, these youthful offenders have limited or no work history.
The inmate with appropriate skill, knowledge and ability may have the opportunity to work; and more importantly, work for a private prison-based company. The next step in the modernization of correctional facilities is the development of penal philosophy and practice that favor, albeit cautiously and carefully, a private-sector role in providing marketable jobs skills to some inmates.
Work in Prisons
The state prison is the most widely used form of incarceration. One of the greatest problems of prison life is idleness. Unless inmates are occupied, they become restless, uncooperative and violent. Preventing violence in prisons is critical to the safety of the staff. In the past decade, about 70% of all prisoners in the United States is serving a sentence for a violent crime and had a prior history of violence. To combat boredom and maintain facility control prisons offer education and work training programs. Inmates work in shops, perform clerical work, prepare meals, do laundry, or engage in building maintenance/ repair, horticulture, refrigeration, pet rooming, and airline reservations. Contemporary prison work programs differ in both philosophy and design. The work-punishment philosophy guided the development of hard labor as a way of punishing wrong doers. Work was done on the railroads by convicts organized in chain gangs. Robert Ellison, a New York publisher and fugitive, wrote about his prison experience in I am a Fugitive From the Georgia-Chain Game. It was made into a Hollywood movie and helped Ellison obtain a pardon in the 1940s.
Hard labor sought to achieve justice through breaking the spirit in the hope of causing repentance. As for those who did not embrace the tenants of fundamental religion--repent and remain law-abiding--they died in chains. Hard labor was subsequently replaced with the so-called soft labor. Inmates worked in "solitary", alone in the cell or together in "silence." Driven by the philosophy of treatment and rehabilitation, Cherry Hill Penitentiary in Philadelphia popularized the use inmate skills to offset the cost of operating the prison facility. This privatization model emphasized the fixed or piece-price contracting out of inmate labor systems. Inmate labor was used to work on private projects for an agreed upon fee. The generated revenue was used to pay for half of the facilities operating cost. These activities did not last, however, as social pressures, namely opposition from the unemployed labor unions, and rival manufacturers ensured the demise. The single most important setback for the state-run facility, is the absence of a clear mission. Experience at Cherry Hill calls to attention the need to set organizational goals that are aligned with practices that work.
Ideally, challenges to the public-private partnership concept would be addressed in law. The difficulties faced by partnership participants can weaken correctional authority, increase state liability and add to costs. Unifying the public and private organizations is not easy. Legal guidelines are considerably blurred in the area of these third-party governments (joint partnerships or ventures). Some problems that challenge partnerships in corrections are when inmates are restricted to their cells during a "lock-down," what happens to the inmate-employee? When custody Return to Custody facilities (or private prisons) are privately managed and operated, yet the law mandates that public peace officers provide security, what happens to the officer-employee? And, when lawsuits are filed for wrongdoing, which is liable?
There are no clear rules about the legal status of inmate-workers who are employed in prison-based work programs structured like "real-world," employment centers (ventures). Problems sometimes arise that have not been considered during the architectural phase of the venture project. The author has discovered, after years of working in this area, that the solutions to forging effective partnerships are conceptually simple, but not easily implemented. Legal/statutory constraints, labor unions and political opposition, shifts in philosophy as well as management and administrative complications, must all be mitigated or resolved. The following paragraphs provide a brief overview of the challenges faced by participants in privatized programs in general, and especially by those involved in correctional ventures.
A report of the National Institute of Justice (NIJ) entitled The Private Sector Involvement in Prison-Based Businesses, explore the extent of public-private partnerships in corrections. It provides an overview of the laws prohibiting, limiting and authorizing partnerships in corrections.9 Key areas discussed are: (1) the usefulness of establishing prison-based businesses (correctional industries or free ventures); (2) partnership models; and (3) the legal/statuatory authority to form partnerships. The brevity of this paper permits an only a superficial discussion of the laws. For a more in-depth discourse, refer to the study entitled Public-Private Partnerships, by the author. Federal and state legislation is important because it defines the parameters within which ventures operate.
The majority of the laws restricting prison-made goods in the interstate market were promulgated in the 1930's. A brief examination of federal law hindering the forging of partnerships, are the Hawes-Cooper Act; Sumners-Ashurst Act; Ashusrt-Sumners Act; and, the Walsh-Healy Act. These 1930's laws govern the transportation of prison-made goods; explain the criminal penalty for breaking the law; and impose limits on parties involved in ventures. The Hawes-Cooper Act (1929), 49 U.S. Code 60, restricts the movement of prisoner goods from one state to another, unless the state receiving the goods permits it. It also restricts the use of prisoner goods to correction facilities and for government use. In short, federal laws regulate the marketing and distribution of prisoner products as well as limit prison labor use on federal and state contracts.
Access to the interstate market is one crucial requirement of the Free Venture Program operating in the California Youth Authority, because products have to be competitive Executive Order 117555 (1973) and the Justice Assistance Act (1980), also known as the Prison Industry Enhancement Act, permit some federal "employment" of prisoners and access of their goods in the interstate. Congress has exempted some pilot venture projects under the P.I.E. Act so that some 250 programs can flourish. OSHA laws and the Fair Labor Standards Act (FLSA) also affect the operation of ventures. As regard the FLSA, the P.I.E. Act mandates a minimum or market wage is to be paid for inmate workers in ventures. In so doing, the definition of "employee" is challenge. In fact, an inmate in Nevada sued for "perks" and better wages under the FLSA, asserting the "employee"status. The courts will continue to hear from inmate-employees involved in ventures.
Thirty-eight states have no statute specifically prohibiting sales of prison-made goods in the open market or have statues at all on the subject. Some states, such as Oklahoma, have no specific statues prohibiting or authorizing open market sales, yet contracting with the private sector may occur. In California, legislation governing ventures is designed to enhance the operation of the business in the prison setting and protect the rights of the participants. There are five major laws that dictate Free Venture Program operations. Until recently, adults were prohibited from participating in these programs by Article 14, Section 5 of the California Constitution. The author worked diligently in this area to overturn this constitutional barrier that also limited the expansion of the CYA projects. In 1990, Proposition 139 removed this barrier. Under the authority of Penal Code Sections 2717-3 and 508, the Joint Venture Program (adult corrections) was born. In 1981, the CYA secured a legislative amendment, section 1124 of the Welfare and Institutions Code to authorize a few pilot venture projects. This was granted based on provisions in the P.I.E. Act. Still, a narrowly defined category of goods and services are permitted in the interstate commerce; thus, limiting the international companies that may want to locate a business behind bars.
Title 15, California Code of Regulations, allows some access to state markets. Section 3, Article 16, Gifts of Public Funds, of the California Constitution, prohibits use of funds for private purposes rather than for the public good. Lease of land is crucial to the expansion and tenure of ventures. Government Code section 14670 only permits the "leasing of state-owned land for a period of five years." This limitation is still an issue for private companies desiring to locate their prison-based business for longer than five years. CYA has attempted to get legislation passed to extend leases from five to twenty years. In this way, the private sector could depreciate capital cost of initial involvement over a longer period of time. In summary, the actions of Congress and state legislatures in promulgating laws sometimes impeded innovative leaders of the administration of justice system. On the one hand, laws appropriately establish parameters, which compel correctional facilities to recognize rights and liberties. On the other, laws can be so restrictive as to cause stagnation. Surely, venture participants are in a catch-22 situation during the Age of Reinventing the Government (REGO).
Tradition and Change
A major theme of the REGO era is recognizing the extent to which philosophy shapes public policy. Much of what has been previously discussed could be summed up under the rubric of a public- or market-oriented government. REGO attempts to empower communities through a
market-oriented government model: competition, customer choice and accountability for results. This idea has as much to do with liberalism and conservatism. By implementing a public private partnership agenda, goals and methods may not come from traditional notions of public governance. A problem facing the justice system is rapid social change. The philosophic premise that underlies traditional correctional work programs are command and control: prioritized custody and security matters. Traditional Prison Industry Authority (PIA) programs goals are to reduce inmate idleness and violence. Consequently the administration of justice administrators have learned to create programs to keep inmates busy and provide space for solitude (security housing unit or SHU) for inmates engaged in prison violence. National and regional governance is responding to the pressures of over crowding and high cost by marrying the private and public sectors. Through partnerships state government is forced to adapt to rapid change; but it has not been easy.
In California, the free venture program must operate for profit; it is unrealistic to expect the state-operated PIA program to become financially self-supporting. The author recognizes that different orientations of the private and public sectors influence program operations, even the implementation and evaluation. Neither changing technology nor new knowledge of social behaviors and the relationship between unemployment and crime are going to force a re-invention of the traditional PIA. At most, PIA represents the bureaucratic status quo--facility rules and regulations--necessary to its operation. PIA must balance its goal of employing large number of inmates with the reality of less staff, space, and management. But, venture programs cater to a small subculture of the inmate population. It depends on management expertise, staff support, adequate space, high-tech equipment and administrative flexibility. A new system is created. This is indeed a challenge. The author does not believe that prison work programs should be judged by one set of standards; nonetheless, philosophic underpinnings account for that programs mode of operation.
Administrative and Legal Issues
The challenges of bringing together the public and private sectors are evident in ventures. The author recently attended the eighth annual Cal-Tax Conference. Public and Private leaders, scholars and union representatives met to discuss California's competitiveness. Suggestions were offered to improve local and state government through partnerships. The new paradigm for administrative agencies in corrections embraces and encourages joining the positives of business of labor with government. In so doing, the highest and best use of limited resources is accomplished. Quality is directly associated with administrative matters such as inmate marketable skills training and management and staff expertise. Before it is possible to forge effective and flourishing partnerships in general, and in particular ventures, an approach that embraces Total Quality Management is recommended. TQM can address the big issues of budget, personal, financial planning, education and job training.
The issue of legal authority is debated by proponents opponents of public-private partnerships. Of particular interest is whether forming ventures is legal. Apparently, the answer has been determined by the Constitution as well as federal and state laws. The courts have upheld legislation authorizing and restricting venture activity. A nation-wide survey commissioned by The National Institute of Justice indicates that 21 of the 50 states have statues authorizing the employment or contracting of prison labor. California is among the states that also allow a broad private sector role in prisons. Legal authority, however, does not guarantee successful program implementation. In fact, there are no foolproof guidelines to assist the public agency and private business in avoiding or diminish its liability. The loss of correctional facility control can result in liabilities for which the public agency is held accountable. In the CYA facilities where venture projects are prominent, liability has not been an immediate issue. The contract has an indemnity clause intended to reduce the correctional facility's "exposure by specifying it will be protected against any damage award or cost."
Finally, administrative liability typically involves suits against the government or the public official. The magnitude of public-sector accountability is not defined. Nor have the courts settled the issue of sovereign and public official immunity. Prior to the 1960s, the courts generally held that administrators were exempt or immune from liability suits. Since the 1960s, courts have decided that "under sections 1983 of the Civil Rights Act ... and in analogous cases" the act's provisions extend to artificial "persons" such as government agency and the state. State immunity under the Eleventh Amendment and administrators' use of immunity may not protect them from potential liability suits.
It is certain that controlling crime (policy) and achieving justice through punishment and rehabilitation (philosophy) determine the extent and nature of inmates under state care or in the community. In short, we have found that young adult offenders are not prepared for release back into the community; and, sentencing policy is a factor in poor preparation.
Industrial Policy, Philosophy and Inmate Work Programs
Industrial policy has greatly influenced the development of inmate work programs in a variety of ways. The Cherry Hill Penitentiary was a facility for making idle prisoners industrious. Public policy to achieve rehabilitation progress, focused on the "evils" of idleness. Even Max Grunhut thought that the "essence of prison discipline was prison labor;" and the British Prison Commission in 1885 required punishment of "hard, dull, and monotonous
labor." In The Prison, Hawkins writes that work can be useful in promoting the "inmate-welfare" point of view. This view holds that idleness puts the inmate in a "stupor," leading to poor morale. In addition, Louis Robinson distinguishes between labor as a punitive factor and labor as a mitigating factor. The rationale for prison industries is that meaningful work where inmates are paid for their services assist in rehabilitation. Of course, new forms of work programs are a refreshing contrast to the hard-labor discipline of the past.
Recent research regarding ongoing prison industries, which involve the public and private sectors, include information provided through the National Institute of Justice Criminal Reference Service; the People's Republic of China Ministry of Prison Industries; and, Correctional Services of Canada. These organizations have graciously provided the author with reports on prison industries worldwide. Some ongoing international partnerships are mentioned below.
In July, Thailand hosted an Asian and Pacific Conference of Correctional Administrators to discuss corrections in eleven countries, including Hong Kong, the Republic of China, and Japan, regarding prisoner rights, exchange programs, and industries. Information from the conference indicate that throughout the Pacific region, there is a deep concern for improving prison conditions and rights without alienating prison guards. Policies that create avenues for cost-cutting programs are being considered by international policymakers. Countries reported "on the costs and benefits of policy that obligates the convicted offender to work when sent to prison ... gain skills necessary to function upon release, and to use work as a form of discipline."
This brief overview reveals how extensive partnerships are, and gives indication of the philosophy shaping industrial policy. What these projects describe is a new paradigm, a shift in the basic model of governance traditionally used by states in the administration of prison work programs. This author discovered there are a set of assumptions that appear to be guiding policy makers in this area. First, there is a strong belief in the utility of work. Although some work programs such as chain-gangs may not provide marketable skills, but, can be useful. Second, a work ethic seems to be important. Corrections administrators continue to struggle with a theoretical framework that can be used to integrate notions about the Work Ethic with viable industries. Third, there is consensus that this new paradigm of work must locate private business(es) behind bars. Last, an accepted venture model is one that embellishes the idea of marketable job skills training and reduced recidivism during post release. This new paradigm began its reign during the 1980s.
Partnership: the Joint Venture Paradigm
During the 1990s, California is known as number one in prison population; and yet, 42nd as the least punitive state in the nation. The ISL/DSL Senate Hearings further revealed that under indeterminate sentencing, inmates were less violent, more motivated to avail themselves of prison programs, and more committed to their rehabilitation (habilitation is preferred) progress. Also, the various economic and social pressures have spurred corrections administrators to seek the expertise of the private sector for efficiency and effectiveness. Reasons for the renewed interest in privatization, namely ventures, is expressed in the following quote by Peter Drucker:
"The next twenty or thirty years will be very different. The need for social innovation may be even greater, but it will very largely have to be social innovation within the existing public-service institution. To build entrepreneurial management into the existing public-service institution may thus be the foremost political task of this generation."
A host of job-training programs have been established under Job Training Partnerships Act. This model is elaborate and will not be discussed in detail (see Lewis, Partnership for a cogent discussion). Elements of the JTPA concept--partnerships that target unskilled adults and at-risk youth between sixteen and twenty-four years of age-- have been adopted by corrections. Prisoners across the country are trained by programs operated by the private sector. The American Correctional Association (ACA) operates a national clearinghouse of information on correctional work programs or government-operated industries in the city and county jails. The results of a survey of 3,316 jail and detention facilities across the United States on the status of correctional industries, are published in the Correctional Industries (CI-Net) report. Of the 749 jails responding, 25 facilities reported operating over 65 jail production shops in 23 jurisdictions serving populations ranging from 45 to 5,400 inmates.
Inmate length of stay in the facility was a minimum 20 days and a maximum of 5 years. Jail industries across the nation employ more than 5,000 inmates, 80% of whom are men. Partnerships between counties and cities to provide in-prison job experience to inmates in jails are prevalent. There are, however, jurisdictions where activity is dormant. One jail reported that it had closed its industry because of "short" length of stay of inmates. Despite the challenges of short-term populations, jails are starting new industries on a daily basis. A wide variety of inmate goods and services are offered to government; for example, electronic components, dairy products, and garden materials. California corrections operate industries through the Prison Industry Authority (PIA). Areas of work training are ranch operations, farm equipment maintenance, manufacturing, general fabrication, freight service, bookbinding, printing, knitting, textiles, wood products, agriculture, dairy, and license plates. PIA employment is available to inmates who have good institutional behavior and a willingness to work. Credit-earning reduces time served in prison. Outside workfurlough (California Penal Code section 1208) programs exist. Inmates leave the facility for part of the day to perform work in the community. At the end of the day, inmates return to the correctional facility to continue serving the remainder of their sentences, less time off for credits earned.
A variation of furlough is work release (Penal Code section 4024.2). Work-release programs allow offenders to perform eight to ten hours of supervised manual labor on public works or streets, in parks and schools, in lieu of one day of confinement. These programs are for low-risk offenders. Generally, work release is utilized more extensively at the county level. In New Jersey, a work release program operates the Jersey Mike Fast Food Restaurant, which employs twenty youth living in a nearby group home. Youthful offenders are trained in all aspects of the fast-food business, ordering supplies, setting policies and procedures, and learning about cooking and production costs. They are paid a market wage and profit sharing.
In short, tremendous energy is put into designing work programs for inmates. This effort is even greater when building workshops behind bars. Networking with institutional staff and community providers is key to the functioning of vocational training, PIA, and support work programs. Still, it has been a herculean task to provide work assignments for all inmates and, more importantly, to employ inmates in "meaningful" work. Meaningful work commands the inmate's interest, utilizes the inmates' skills, and enhances his or her marketable job skills. Corrections strategy has been to create a feeling of partnership so that the private sector would become more interested in prison-labor business opportunities.
Structure of Free Venture Models
Since the mid eighties, privatization is being used to maximize human potential, reduce violence and hold inmates responsible and accountable for paying obligations, self-care and victim restitution. Private prisoner training is found predominantly in medium- and minimum-security facilities. There are an estimated 2% of the total US prison population working in ventures.
In these public-private venture projects, the private-sector participant may play one of several roles. In the Customer Model, the private sector purchases a significant amount of product produced by the state-owned and operated prison venture. For example, in Utah's Correctional State Prison at Draper, the Utah Printing and Graphics shop is a prison operation that manufacturers signs largely purchased by two companies, Walker Safety Sign and Pace Industries. Under
the Customer Controlling Model, the private sector purchases all or more than 50 percent of the prison-based business's production.
The private organization may also play a central role in the capitalization of the industry, or it may provide technical and management assistance. The Manager Model allows total private management of the publicly owned industry. An example closely resembling this model exists in Florida. Price, Inc., operates all prison industries for the Florida correctional agency and therefore replicates many features of the manager model. The Investor Model describes a situation in which the private organization capitalizes or invests in the public prison-based business. Whalers Company has invested in Arizona Correctional Industries (ARCOR) at Arizona's prison in Perryvile. Whalers provides the equipment in exchange for a share of ARCOR's profits. Finally, there are the Joint Venture and Employer models. The former involves the private sector as a manager of the industry it jointly invested in with public agency.
The Employer Model creates a prison-based industry that employs inmates as its sole source of labor, to produce goods or services for sale in the marketplace. The private company controls the hiring, firing, and supervising of the inmate-workers and pays the prevailing on minimum wage. This model is used at Kansas Correctional Institution (for adults), where the private company involved is Zephyr Products, Inc., of Lansing, Michigan. Since Zephyr brought its metal fabrication business behind bars, it has collected over $250 million in federal and state taxes and returned over $650 million "back to society" through reimbursements to the state for room and board fees. At Arizona's Women's Facility, Best Western International established a hotel reservation business in 1981, hiring female inmates to handle overflow reservations and room changes. These inmate-employees are paid an hourly wage starting at $4.25. This model is used to a great degree in the CYA.
California's Free Venture Program
In 1990, California voters overwhelmingly passed the Inmate Work Program Initiative or Proposition 139. This proposition amended the California constitution to allow the private sector to employ adult inmates. The CDC created the Joint Venture Program in 1992 to attract businesses, "gain the competitive edge and help inmates of correctional facilities develop productive skills." The Free Venture-Private Industry Program has operated in the CYA facilities since 1985. Years of investigation have proved to be a worthwhile alternative to traditional approaches to enhancing youthful offenders'
post-release employment success.
The "free venture" part of the program title refers to the development by a public agency or department of profit-oriented, businesslike industrial operations inside (or adjacent to) a publicly operated correctional facility. "Private Industry" refers to any enterprise privately owned that produces goods and services for profit. The goals of the CYA Free Venture Program are to:
Other Program goals are to enhance self-esteem and the employer-employee trust. The CYA Free Venture Program is unique. The CYA is the first youthful offender institution in the country to permit the private employment of wards. In many respects, Free Venture mirrors the JTPA program. The wages are minimum or prevailing, and the target population is age sixteen to twenty-four, and the hard to employ. The obvious difference is that the Free Venture Program employs incarcerated youth. Both Free Venture and JTPA rely on effective marketing strategies to promote their programs. In like manner, these programs encounter opposition from organized labor, legislation, and governmental regulation, as well as resistance from administrative staff and management.
Partnership activity in prisons and jails provides conclusive evidence that there is a strong interest in building relationships with organizations from the private sector. There are, however, complications that impede progress in this area. These issues lay the foundation for a more critical analysis of ventures in terms of development, implementation, and evaluation. Summarized below are observations that raise questions about the usefulness of ventures in achieving inmate habilitation. These observations guided the development of the Venture Survey, used to evaluate the Free Venture Program's impact on the post-release employment of CYA parolees.
Guidelines for Developing Private Ventures
The following are major issues involved in designing ventures. These considerations were presented at the Conference on Private Sector Prison Industries in 1990.
The goals for the private business are to secure readily available labor and to earn profit. The public agency aims to cut the costs of prison operation, employ a large number of the inmates, and improve their post-release employment opportunities. The venture models are distinctly different from the traditional prison work programs in that they offer prevailing wages based on productivity, may offer benefits, deduct taxes from earnings, defray room and board, and enable savings and the payment of victim fines. Moreover, inmate workers have the same rights and obligations invested in free workers, e.g., breaks and overtime pay.
Clarifying goals is important. These goals determine the partnership model and the interaction of individuals (union leaders, politicians, wardens) and agencies such as the Employment Development Department and Internal Revenue Service, both inside the institution and in the community. Choosing the best model is fairly straightforward once goals have been articulated. In the CYA, the employer and customer models are prominent, because they afford the private vendor maximum responsibility for the venture, thereby reducing the involvement of public money and staff. These are some elements to consider when selecting the appropriate venture model:
During the planning and development stages, supper and middle management from the public and private sectors should review objectives, procedures, and model requirements. The agreements are then written up in a legally binding document, the contract. The contract is a road map, so to speak, to be followed by the partners in the coming venture (Lewis, 1994). The institutions that attend to the aforementioned before attempting to operate a venture are better equipped to operate the venture.
The Sexton report, Conference on Private Sector Prison Industries, and this author's study, point to two essentials of successful venture operation: competency industrial management and supervisors highly skilled in identifying and meeting market demands. Serious problems can usually be avoided when the corrections administrator and the private business supervisor are aware of their responsibilities and obligations. Some considerations for the correctional facility are security and control issues. The correctional facility needs the flexibility to assume control of the business in case of a lock-down (when the facility would be closed and operations stopped). The employer model allows the facility to address the security problem.
It should be stressed that these two sectors together, especially behind bars, is not easy. There are risks for the agency, not the least of which are liability and financial costs. The agency does not want to be in a situation where it has a burden of underwriting the venture. The business must be self-supporting. Moreover, if the business does not generate revenue, deductions from inmates' wages cannot occur. Nevertheless, the correctional facility that takes a responsible approach to managing the venture project may assure that expectations are met.
The planning and management of the venture are generally the responsibility of the top and middle levels of management in corrections and in the private business. The CYA Free Venture Program is under the control of the corrections administrator at headquarters. The administrator answers directly to the CYA director. At the institutional level, the warden and the deputy warden have authority to make decisions about venture problems that may arise. The decisions about venture problems that may arise. The decisions for implementing a venture project should be at the highest level to achieve commitment to the concept throughout the department and in the institutions. Moreover, the strengths of top-level management lie in committing funds, land, and equipment. The corrections administrator is the point of contact for other jurisdictions operating ventures. The administrator shares information on success and failure with key venture participants. In addition, the private business must have the support of its CEO and other senior executives. In fact, a principle of TQM requires top-level management involvement. Management has the authority to make the kinds of product and work schedule decisions vital to the business operation. Success is more likely when managers understand that efficiency and productivity must be given priority and when they are responsible to the needs of the venture. Middle-level manager's are important to venture planning and operation. When venture staff tries to reach the warden of the institution to obtain approval for an equipment delivery, and find that the warden is unavailable, the deputy warden (mid-management) must handle the matter so that supplies are delivered promptly and business operations are not delayed. Finally, a venture manager is an important position, requiring someone who is patient and diligent as these projects consume so much time. Typical duties are:
4. Mediating conflicts that arise at the institutional level because of the venture.
To meet these responsibilities the manager should:
1. Have correctional experience to instill confidence in prospective participants about operating a prison-based business.
Whatever the model, the relationship between the public and private parties involved in the venture should be defined. The role played by each participant in delivering the work program to the inmate is vital to achieving goals. The taxpayer is tired of the financial burden imposed by administering justice. Corrections wants to return to society productive citizens. The business community wants to be competitive and earn a profit. These interest cohere in the venture.
Venture Survey Findings
Studying post-release involves measuring employment outcomes. The hypothesis is that Free Venture Program training enhances the employability of youthful offenders. There have been attempts to test and prove this hypothesis, including the author's study which contribute useful information about employment deficiencies. The effect of work-skills acquisition in prison on post-release employment and recidivism is an issue debated in corrections and by legislators. Some information has been published concerning lower recidivism among federal parolees participating in the federally operated prison industries programs. In 1984 the Federal Bureau of Prisons began conducting a system wide survey of its United Industries of Corrections (UNICOR). The study compares UNICOR employment to involvement in one or more vocational and apprenticeship programs.
The Venture Survey developed by the author, rather than focusing on the arguments against the private presence in prisons, accepts as a given the benefits of industry participation. Ventures can be instrumental in restoring youth who are industries to the community. The objective of the author's research in juvenile justice and work training, is to understand the factors that reduce youthful offender recidivism upon release from the correctional facility. In general, evaluation data is slow in coming to prove the effect of venture employment on reducing recidivism among youthful offenders. Even when one conducts an evaluation of venture programs, it is difficult to establish a cause-effect relationship between venture training and reduced crime. Some parolees could be working and model citizens, and yet, commit crimes. However, the author believes that preliminary data (PREP, CYA, Venture Survey) implicate an absence of marketable job-skills training, especially ventures, as a contributor to failure on parole and ultimate recommitment to prison.
Measuring Post-Release Outcomes
The Venture Survey is the first of its kind. It was created as one instrument for evaluating the California Youth Authority's Free Venture Program against traditional state-operrrrated work programs in terms of increasing chances for employment, reducing Employability Risk Factors (ERFs), engendering trust, and instilling self-esteem. The author found that the California Free Venture Program helps reduce employability risk factors (ERFs) associated with unemployment and parole failure. Moreover, the best understanding of youthful offender socialization, work and its stimulating effect as well as the challenges faced by Free Venture, come through encounters with the human element. The Survey was administered to 150 (of a total 250) ward-participants in the Free Venture Program. The Survey was used to gather information directly from the youthful offenders participants about:
There is a movement toward privatization because the advantages are quantifiable as in the case of the Free Venture program. A pure privatization effort alone is not enough to "reinvent" public governance. Looking at the venture model and asking what can be done to improve the administration of justice in the USA, is inspirational for numerous other bureaucracies world-wide. It is certain that the old paradigm-- public-operated, strict incarceration, and high costs, rarely engender a positive transformation in the inmate. Nor is the system made self-supporting. The private sector's recognition of the process through which character rebuilding takes place, and boldness in attempting to replicate this process behind bars, is invaluable. The author believes that a new system has been created by structured partnerships such as ventures. In the long-run, they are a viable alternative to traditional approaches for achieving government effectiveness and efficiency. State governance requires us to look at ventures as a way to return producers rather than predators to our society; and to hold government accountable for those results.
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