Why can prisons pay convicts less than minimum wage for their work?
Why can prisons pay convicts less than minimum wage for their work?
user
We can call this the labor market and demand for convict labor. The prison industry is what economists call a "monopsony": It's like a monopoly for buying labor.  But there's also a shortage of prison labor, which means that labor unions, which normally try to set the price of workers by negotiation, can't get this done, because the employer -- the prison -- will always choose to pay less, because there are a lot of unemployed people.
assistant
Doesn't that hurt people who make minimum rage, by taking away their work?
user
Indeed, the law and public opinion call for prison labor to pay at least minimum wage.  The prison industry is fighting this, and all the other labor unions, which are trying to push for more.
assistant
As they should.
user