Excerpted From: Stephanie Hunter McMahon, Freed from Prison and Unemployed: What Happens After Your Prison Job Ends?, 110 Kentucky Law Journal 739 (2021-2022) (219 Footnotes) (Full Document)


StephanieHunterMcMahonThe Thirteenth Amendment to the Constitution made involuntary servitude unconstitutional except as a punishment for crime and only if the person has been duly convicted, with the result being the use of cheap prison labor throughout the post-Civil War period. Moreover, prisoners are often denied the unemployment benefits earned by those not incarcerated because inmates are carved out of the parts of the social safety net tied to employment. Consequently, inmates, their families, and their communities are deprived of benefits expected to be widely distributed. Because America's mass incarceration hits some communities harder than others, prison's impact on minority communities' wealth is significant and unjust, with unemployment compensation being only one part.

This Article evaluates the economic and sociological impact of denying inmates unemployment compensation regardless of the type of prison employment or employer. Today, inmate labor comes in three forms--as prison work assignments, for government industries, and for private companies. Some of this work entitles inmates to pay, if rarely, at a market wage. Nevertheless, in few, if any, states, does the loss of a job, regardless of the reason for that loss, result in entitlement to unemployment compensation.

This Article builds on a prior one I wrote, Inmates May Work, But Don't Tell Social Security, in which I looked at how prison labor rarely earns towards future Social Security and Medicare entitlements. This Article turns to unemployment compensation because of important differences in these social welfare programs. For one thing, the former is administered by the federal government and the latter by the states. The systems also differ because, unlike Social Security and Medicare, which are generally only available when workers surpass age thresholds, unemployment compensation has no such thresholds and can be enjoyed at any age.

The issue of unemployed prisoners is a pressing problem made visible by the pandemic's economic contraction. When Maine paid fifty-three prisoners unemployment compensation when they were laid off from work release programs as a result of COVID-19, the governor responded that work release β€œis a privilege--not a right--and any inmate who loses that privilege for whatever reason should not have access to our limited public benefits system.” A federal judge dismissed a lawsuit filed on behalf of the prisoners. No mention was made of how the compensation would otherwise have been used, possibly to support the inmates' own families or as compensation to victims.

Although unemployment benefits are tied to compensation and capped by the paying state, those un-incarcerated workers whose employers pay into the system can expect to receive payments as long as they meet statutory limits. The terms vary by state but, generally, employees not terminated for cause are eligible and those fired for misconduct are not. Nevertheless, even though some prison employers pay into the unemployment system for inmate employees, many if not all states are adamant that incarcerated workers do not qualify for unemployment benefits that, because of the racial composition of prisons, creates a disparate impact.

This Article proceeds in three Parts. Part I discusses the operation of the unemployment insurance and unemployment taxes at the federal and state levels. This Article examines the systems in six states--Alabama, California, Maine, New York, Ohio, and Texas--as a noncomprehensive survey of American regimes. Readers familiar with unemployment compensation regimes, should feel free to skip to Part II. Part II examines the exclusion of prison labor from the unemployment regimes by first looking at the types of prison labor, state specific exclusions, and, finally, Maine's recent exclusion as a specific example where politics carved inmates out of the benefit program. The Article concludes in Part III analyzing what would be required to extend benefits to inmates based on current state requirements and the benefits that could be expected in communities of color.

Instead of continuing to exclude inmate labor from unemployment compensation, Congress should push for an expansion of these systems on terms equivalent to those for non-incarcerated workers, taking into account the prison context. Currently, the federal government contributes significant revenue to states' programs through the Federal Unemployment Tax Act (FUTA) as well as pays for states' administrative costs. Therefore, although these are state programs, Congress can encourage expansion as it has in the past by adding requirements for states to qualify for federal funding of their administrative costs. By including inmates' work in unemployment compensation systems, the federal government would signal the value of inmate labor and provide for greater racial equity. When workers are terminated from their employment without cause, whether inside or outside of prison, the government should recognize that change in status and the economic consequences for the worker.

[. . .]

The United States' high incarceration rate has many consequences of which policymakers and the public may be unaware. One of those consequences is that inmates who work, whether for the prison, for prison industries, or for private employers, are all working hard, but when they lose their jobs, it is as though they had not worked at all. Their work is ignored. Employment while in prison, however, reduces recidivism and provides the economic means for the incarcerated to transition to productive lives out of prison. Therefore, it makes sense to recognize that the loss of employment opportunities, when caused through no fault of the inmate, deserves the same economic redress as when anyone loses their job.

The impact of the existing exclusion of inmate labor from unemployment compensation regimes does not fall solely on the prisoner. When inmates' employers do not contribute to the FUTA tax base, inmates do not earn towards the benefits and the lack can hurt the inmate and their dependents. The result is a greater chance that members of highly incarcerated populations, especially minorities, find themselves without the benefits one should expect for someone who has worked, all because the government has decided their labor can be ignored.

Professor of Law, University of Cincinnati College of Law.