Whole Foods Market (NASDAQ:WFM) was praised recently for its decision to stop selling products made by prison inmates. After enduring withering criticism for essentially using "slave labor," the organic grocer reversed course and gave in to the activists protesting its ethics.
But for-profit prison labor doesn't institutionalize a plantation mentality, rather it is actually a social good that should be supported, particularly because of the benefits it bestows on those most in need of them.
The high cost of crime
According to the Bureau of Justice Statistics, there were more than 1.56 million people incarcerated in state and federal correctional facilities at the end of 2014, over half a million of whom were black males, or 37% of the total. White males accounted for 32%, Hispanic males were 22%, and the balance were women of all races. It also said black men in every age group were nearly four to 10.5 times more likely to be imprisoned than white men.
Intuitively, high rates of unemployment would be a leading contributor to higher crime rates, and thus higher rates of incarceration, and plenty of studies have shown there to be a nexus between the two.
Not surprisingly then, black men bear the greatest burden of unemployment. As of the end of September, unemployment rates for adult black men age 20 and older stood at 9.8% while the same cohort among whites was just 4.1%. Black men and women age 16 to 19 suffered unemployment rates in excess of 31%.
Crime doesn't pay ...
That leads to the question of what happens after a prisoner is released, and according to the National Institute of Justice, finding employment after incarceration is one of the biggest challenges ex-cons face. One study found between 60% and 75% of all ex-offenders remaining unemployed up to a year after release, a situation that increases the risk of recidivism exponentially.
In short, it's a vicious cycle. Unemployment begets higher crime, which begets higher rates of incarceration. Break that cycle and you might be able to reduce crime and the costs that imposes on society.
Which is where prison labor comes in. Those large segments of the unskilled, unemployed black community that are imprisoned would have vital, marketable skills they'll be able to use once they regain their freedom.
... but these companies do
Whole Foods sold two products made by prison labor: Haystack Mountain Goat Dairy's goat cheese and Quixotic Farming's tilapia. Both were the result of partnerships each had with the Colorado Department of Corrections, which employs some 1,600 inmates in a prison-workforce program.
It said it believed "that supporting suppliers who found a way to be part of paid, rehabilitative work being done by inmates would help people get back on their feet and eventually become contributing members of society."
And the organic grocer isn't alone in selling prisoner-made products, as over the years hundreds of major corporations have often indirectly benefited from prison labor.
- Inmates packaged Starbucks holiday coffee.
- Nintendo Game Boys were also packaged by prisoners.
- A Microsoft subcontractor used inmates to shrink-wrap products.
While some critics contend the skills being learned won't be easily transferrable to the private sector once the offender is released -- Vice quotes one opponent asking just how many tilapia farms there are -- it's not necessarily about understanding the mechanics of farm-raised fish or even filling one-pound bags with coffee beans. Instead, it teaches prisoners the importance of being responsible, of exhibiting consistency, showing an ability to perform tasks in a work setting, and more.
It doesn't hurt, either, that prisoners in these programs often make much more money than those doing typical prison labor like cooking and laundry.
A world turned upside-down
Although Whole Foods Market understands the prison-labor concept helps in rehabilitation -- sitting idle in a cell helps no one, least of all the community the prisoner will one day return to -- it still chose to abandon the program in the face of criticism.
Even though it believes such programs help prisoners "become productive members of society, we always want to make sure we are in-tune with our customers' wishes." As a result it is dropping its participation in the program and expects to have prison-made products off its shelves by next April, if not sooner.
Prison labor isn't a problem in search of a solution, but rather a meaningful way for otherwise difficult-to-hire individuals to hone vital skills.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Starbucks and Whole Foods Market. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.