In much of the private sector, workers head in each morning in their uniforms or suits with a bottom line in mind: profits. They know for every hour worked, they’ll earn no less than $7.35 an hour.

But for the offender workforce at Missouri Vocational Enterprises, under the Missouri Department of Corrections (DOC), the uniform is a gray jumpsuit with a name and ID number ironed on the lapel. The bottom line, according to Mandi Steele, public information officer the DOC, is work experience to prepare offenders for re-entry into the private sector. And for a day’s work, the offender earns a maximum of $7.50.

MVE primarily manufacturers items for the prison, including offender clothing, shoes and coats; officer clothing; toilet paper and trash bags. But inmates in the program also make license plates, furniture and office supplies, and the majority of the program’s sales come from license plates for the Department of Motor Vehicles.

In the mid-1980s, MVE gained the status of primary provider to state agencies for all the products that they manufacture, due to a state mandate requiring all Missouri state agencies to purchase from MVE whenever possible. The program is limited by statute to only sell products to tax-supported entities such as state agencies, cities, counties, schools and not-for-profit entities.

“There used to be quite a bit of business to be had at state of Missouri agencies, and now that’s no longer a market,” says Brad Eiken, co-owner of Inside the Lines, a furniture wholesale store. “So for a dealer like myself, we don’t even look at that market.”

Before Eiken was an owner of Inside the Lines, he worked for Check Office Equipment, a family-owned business that his father ran out of Jefferson City. When the mandates were enacted in the mid-’80s, the company lost a large portion of its market share and has since been bought by another company.

“When they go into other markets such as schools, they’re removing a part of our market” Eiken says.

Don Corwin, partial owner of Affinity Office Furniture, says MVE was problematic when the company first opened because the company would always win bids for state agencies, due to both the mandate and its competitive pricing.

“I have a few issues with MVE, not so much that they’re in business and competing with us, but it’s more that they don’t compete with us because of that mandate that a lot of departments have to purchase from them,” he says. Affinity has since diversified its customer base and only occasionally competes for state bids.

Supplying the state

MVE hourly rates for offenders start at 13 cents and range to 71 cents per hour, and work-release offenders are paid $7.50 per day. This is a fraction of the Missouri state minimum wage of $7.35 that businesses in the private sector must pay.

“With the cost of hiring and maintaining employees and benefits, I would say that MVE — at least one portion of their business model — doesn’t have the day-to-day business expenses that a private-sector company would have,” Corwin says.

Steele says this doesn’t result in an unfair advantage in product pricing because MVE facilities endure costs that the private sector doesn’t have to because of the confines of working within a prison.

“The reality is that operating a factory inside of a prison is hampered by the need for security, strict tool control and the need for added civilian staff for offender supervision,” Steele says. “Due to the nature of our work and factory locations (inside the fences), MVE has a number of expenses that a private manufacturer does not have.”

In fact, Steele says: “The prison industries program does not take money out of the private sector. MVE enhances the private sector in Missouri by purchasing millions of dollars of manufacturing supplies and raw materials from Missouri-based companies while training offenders to come back to the private sector with work experience.”

Steele went on to say that though they try to mirror businesses in the private sector, they are not geared toward mass production for a number of safety and security reasons.

Sharing the market

Funded by a capital revolving fund, MVE doesn’t receive tax dollars, but approximately $7.5 million of the program’s profits have been used in the general revenue fund over the last three fiscal years, though the program does not expect that to continue in 2013.

In 2004, Missouri Representative Mark J. Bruns introduced a bill that would allow companies in the private sector to compete for state agency bids and remove the preferential treatment of MVE. Missouri House Bill 1501 was referred to the budget committee, and no action has been taken since.

Despite discontent among some potential competitors, the DOC maintains that MVE is a program that provides a strong incentive for compliance from the inmates, and inmates who participate in the program are almost 7 percent less likely to become repeat offenders, according to a 2010 report.

“Offenders employed by MVE earn more money than other offenders in the prison system,” Steele says. “These jobs are worth keeping, are very important to the offender and are a tremendous incentive for good conduct. MVE plays a very large role in the everyday safety of our prisons and our staff.”