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Call it in-sourcing: American companies take call centers to prisons rather than overseas
Associated Press | 2/25/04 | Andrew Kramer

Posted on 02/25/2004 8:03:12 AM PST by Attention Surplus Disorder

ONTARIO, Oregon (AP) -- Chris Harry is a model employee for the U.S. call center industry. The 25-year-old arrives promptly at his cubicle, speaks courteously on the phone and is never late or absent.

He plans to stick with his job for three years, a boon in an industry plagued by high turnover. And he gladly works for money many Americans would scoff at -- $130 or so a month.

After all, he could be back swabbing cell block floors for a third of that.

"I can't complain about fair," said Harry, who was sentenced to 10 years and eight months for robbery. "I did a crime and I'm in prison. At least I'm not wearing a ball and chain."

Prison inmates like Harry are the reason Perry Johnson Inc., a Southfield, Michigan-based consulting company, chose to remain in the United States rather than join a host of telemarketing companies moving offshore.

Perry Johnson had intended to move to India. But the company chose instead to open inside the Snake River Correctional Institution, a sprawling razor wire and cinder block state penitentiary a few miles west of the Idaho line.

The center's opening followed a yearlong effort by the Oregon Department of Corrections to recruit businesses that would otherwise move offshore, and echoes a national trend among state and federal prisons to recruit such companies.

"This is a niche where the prison industry could really help the U.S. economy," said Robert Killgore, director of Inside Oregon Enterprises, the quasi-state agency that recruits for-profit business to prisons.

"I'm really excited about this," he said. "We keep the benefits here in the United States with companies where it's fruitless to compete on the outside."

Prison officials have long praised work programs for lowering recidivism and teaching inmates skills and self-respect, yet have been criticized by unions for taking jobs from the private sector.

Those concerns are moot if a company planned to leave the country anyway, Killgore said. National prison labor trade groups support the idea.

Ten states including Oregon employ inmates in for-profit call centers. Oregon and many others also make garments and furniture -- industries that have largely moved offshore, other than in prisons. Inmates are paid between 12 cents and $5.69 an hour, according to Bureau of Prisons statistics.

Perry Johnson Inc. opened its call center in an Oregon prison for half the price of relocating to India, and achieved many of the same benefits, according to Mike Reagan, director of Inside Oregon Enterprises at Snake River.

At Snake River, to qualify for the call center job, inmates must have three to five years remaining on their sentence. Outside, the typical turnover is nine months.

Also, inmates make good telemarketers, prison officials said.

"They see an opportunity to talk to people and learn how to communicate," said Nick Armenakis, a manager for Inside Oregon Enterprises. "They are told that to keep these jobs, they have to be very patient and very contrite, and follow protocol."

The convicts pitch Perry Johnson's quality control consulting service to executives at American businesses, sometimes even company presidents.

Prison officials randomly monitor inmates' phone conversations and all calls are digitally recorded to discourage personal calls or illegal activity.

The prisoners work 40-hour weeks in rows of nondescript cubicles.

Critics assail the idea of retaining American jobs in prisons as a flagrant violation of minimum wage laws and an affront to free workers.

"Obviously, it doesn't do anything for the labor market here," said University of Oregon political science professor Gordon Lafer, author of a study on prison labor.

"It's like bringing little islands of the Third World right here to the heartland of America," he said. "You get the same total control of the work force, the same low wages, and it does nothing for the inmates."

Also, convicts don't benefit much from training for jobs that no longer exist in America because they have all gone overseas or into prisons, he said.

Harry said he is thankful for the skills he has learned in prison, and intends to attend college when he is released. He kicked back in his cubicle and bantered about the weather with a customer in Houston.

"I've been here three months," he said. "Nobody's ever suspected they're talking to a convict."

Federal Prison Industries: http://www.unicor.gov

National Correctional Industries Association Inc. http://www.nationalcia.org

Inside Oregon Enterprises: http://www.insideoregon.com


TOPICS: Business/Economy; News/Current Events
KEYWORDS: employment; outsourcing; unemployment

1 posted on 02/25/2004 8:03:13 AM PST by Attention Surplus Disorder
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To: Attention Surplus Disorder
Hmmm...didn't they use to do this in down South? Whenever a company neeeded workers, they sent the police out to arrest some guys.

I think there was an article about it in the WSJ.
2 posted on 02/25/2004 8:09:21 AM PST by proxy_user
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To: Attention Surplus Disorder
We are in the process of doing the same thing. We are training female inmates to caption educational videos for one of the largest school districts in the nation. This is not a private company, "we" are the school district. Very cost efficient and allows the inmates the opportunity to learn a much need skill.
3 posted on 02/25/2004 8:23:17 AM PST by WesternPacific
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To: Attention Surplus Disorder
Utilizing prison labor to keep costs low. Nice to know that US companies are imitating China's business model.
4 posted on 02/25/2004 8:37:19 AM PST by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Attention Surplus Disorder
Oh I just love the idea of convicted criminals knowing my address and phone number.
5 posted on 02/25/2004 8:50:10 AM PST by Paleo Conservative (Do not remove this tag under penalty of law.)
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To: Attention Surplus Disorder
One thing you may want to consider when calling a call center. Some airlines and hotel chains use inmates to handle their reservation systems. I always ask when I reach any call center employee before providing any credit card information. Think about it.

Just ask, "Are you a prison inmate?" If the answer is yes, think hard before providing your credit card information.

If I get a "yes" answer, I make my reservation another way.
6 posted on 02/25/2004 8:51:30 AM PST by MineralMan (godless atheist)
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To: Orangedog
Utilizing prison labor to keep costs low. Nice to know that US companies are imitating China's business model.

Right on Dog! BTW! How do you people feel about using this type of service when you are giving your credit card numbers over the phone?

This is the same thing that we condemn China for, isn't it? Using prison labor?

If you want to read more about this, pick up a book called "Lockdown America."

7 posted on 02/25/2004 8:52:03 AM PST by navyblue
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To: Orangedog
Yeah, I have mixed feelings on this issue. On one hand, it's an underutilized resource and it's probably rehabilitative to some extent. Jobs kept onshore vs. offshore. Credit card numbers to felons. Ooops.

Maybe Kenny Lay, Jeff Skilling, and the Adelphia bunch could captain a company from behind bars. THAT would be some cost savings.

I doubt many of these folks could handle "customer service" or "help line" calls...they can do order taking, however.
8 posted on 02/25/2004 8:52:25 AM PST by Attention Surplus Disorder (You get more with a gun and a smile than just a smile itself!)
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To: navyblue
This is the same thing that we condemn China for, isn't it? Using prison labor?

Not quite. The inmites in the US volunteer for these jobs, they are not coerced into them, i.e. forced-labor.

9 posted on 02/25/2004 8:54:08 AM PST by kevkrom (Ask your Congresscritter about his or her stance on HR 25 -- the NRST)
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To: Attention Surplus Disorder
Well, next time you're tempted to scream abuse at the SOB who interrupts your dinner to sell you siding, reflect on the fact that he might be a hitman named Vito and he knows your phone number...
10 posted on 02/25/2004 8:57:16 AM PST by Billthedrill
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To: kevkrom
The problem I have with this is that it is private companies that benefit from the labor. The idea is to pay back society, that means the taxpayers. They should be doing jobs that ultimately result in saving the taxpayers money.
11 posted on 02/25/2004 8:57:19 AM PST by dfwgator
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To: Attention Surplus Disorder
I think this is a good idea.

The prisoners are not forced into it, they make a small wage, learn some skills and build a resume, AND some of the cost of keeping them locked up is recovered.

Remember, the reason many turn to crime is that they feel (accurately or not) that they have no opportunities for a productive life. This helps give them hope for a real future.

12 posted on 02/25/2004 9:28:22 AM PST by GoGoMax
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To: GoGoMax
I have a bad feeling about this. Stamping out license plates for the state is one thing, providing sub-minimum wage labor for private industry with the states' general funds getting a kick-back is a slippery slope, IMO. Sure, it's all voluntary now. But I can see prisons offering disincentives for prisoners if they don't participate somewhere down the road. If it's wrong in China, it should be just as wrong here, even in a "lite version."
13 posted on 02/25/2004 9:37:08 AM PST by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Orangedog
I see that you don't have the intellectual honesty to respond to my post here at FR. I also see that you are trashing me at The Stupid Site

I don't support everything that FR stands for, but I stand for supporting our war against terror.
14 posted on 02/25/2004 6:23:32 PM PST by rohry
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To: rohry
I didn't say anything negative about you or the war on any site, rohry. Only that the thread we were all on was getting ugly. And others saw to it for the thread to be pulled before I could reply to a rhetorical post that I honestly felt was beneath you. I never mentioned the name of any other site. That was done by others.

You won't prod me into a flame war. So I'll bid you good day.
15 posted on 02/25/2004 6:28:56 PM PST by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Orangedog
"And others saw to it for the thread to be pulled before I could reply to a rhetorical post that I honestly felt was beneath you."

What was "beneath me"?
16 posted on 02/25/2004 6:42:48 PM PST by rohry
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To: rohry
What was "beneath me"?

That would be calling me an Islamist. We've never crossed paths here before and don't think that I've ever said "boo" about the war on terrorists. Frankly, I saw nothing worthy of responding to in your post and was just going to let it drop.

Good day...again.

17 posted on 02/25/2004 6:49:09 PM PST by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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