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Low Inflation? Not in Prison


Behind bars, the economy is strong.

A "Fiend Book", or a pornographic magazine, goes for as few as 40 macks (if it's out-of-date and stained …use your imagination) and as many as 100 (if it's reasonably up-to-date and bodily fluid-free).

Craving a bit of heroin? Be prepared to fork over 50 macks.

And, if it's a cellphone you're after, that'll be 400 macks, please.

In an interview with the Wall Street Journal, Mark Muntz, president of supplier Global Source, said his company unloaded about $1 million worth of mackerel to commissaries in federal penitentiaries last year, though it's not particularly popular elsewhere.

"We've even tried 99-cent stores," he said. "It never has done very well at all, regardless of the retailer, but it's very popular in the prisons."

While inmates are spending more money on the inside, their keepers are looking for new sources of funds.

Prisons have always put their inmates to work on jobs like grounds keeping, food service, painting, and plumbing. But The Nation reports that, over the past two decades, inmates have also been hired to stitch Victoria's Secret (LTD) lingerie and assemble Nintendo Game Boys and mouses from Microsoft (MSFT). The companies award the contracts to prisons for the low-priced labor, and the wardens put the prisoners to work for even lower wages.

The labor possibilities are endless. To quote the UNICOR Federal Prison Industries website's "Contact Center" section: "Imagine ... All the benefits of domestic outsourcing at offshore prices. It's the best kept secret in outsourcing!"

New York State seems to be in on the secret. If you've called the Department of Motor Vehicles to inquire about a registration issue or renew your license, there's a chance you were helped by an inmate at Staten Island's Arthur Kill Correctional Facility.

The program saves the state about $2 million a year, with inmates fielding between 3,000 and 4,000 calls a day. At a few cents an hour for each operator, routing inquiries to India suddenly looks mighty expensive.

All told, commissary prices may be high and offenders' wages low, but prison life seems to suit some given their options on the outside.

Al Wright, superintendent of the Rockingham County, New Hampshire, House of Corrections, said he recently received requests from two inmates that they be kept behind bars even after serving out their sentences.

"My take on it is the economy is dumping so far that jail isn't looking as bad," Wright said.

Even if you do have to pay $0.90 for a lousy Chick-O-Stick.
No positions in stocks mentioned.
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