Factory owners tired of laying off good workers are getting angry at the continued favoritism of Unicor – the federal prison system's manufacturing contractor – in competition for federal contracts. To get a government contract, Unicor generally need not bear private industry bids – just be similar in price and quality.
This favoritism might be good for keeping prisoners employed, but it's lousy for employers who want to keep their employees employed. Paying $9 per hour plus benefits is a lot more expensive than the 23¢ (or up to $1.15) paid hourly by Unicor to inmates who aren't free to look for other work. Unicor's $900,000,000 in 2011 revenue was earned, in many cases, from contracts won against small-businesses who try to employ free people who are not (yet) felons.
Unicor – communicating through a paid spokesperson, funded for by you and me – defends its preferential contracting against private competition.
Of course, if we keep laying off the people who want to work, we can get them retrained by Unicor once they're convicted, and they can learn to do manufacturing work the private sector is having trouble getting work doing.