It’s probably natural, at the one year anniversary of the British Petroleum oil spill in the Gulf of Mexico, to look back at the consequences.
For starters, 11 men died on the Deepwater Horizon rig. There’s no way to measure the cost of these lives. There’s also no real way to measure the consequences to a local economy that still hadn’t fully recovered from Hurricane Katrina, in 2005. Estimates are that the region lost over 200,000 residents that have not come back yet. Some have suggested that summer tourism and most fishing in the region have effectively ended.
The company itself was impacted dramatically, of course. CEO Tony Hayward (“I want my life back”), was kicked out and relegated to Russia, of all places. BP estimated a loss to the company of over $40.9 billion dollars, and set up a $20 billion dollar compensation fund. At one point, there was talk of impending bankruptcy, and there are still over 300 lawsuits that have been consolidated into one, to be heard in federal court in New Orleans, in February, 2012.
Yet, one year later, things look different. Not only has the stock come back, and is paying dividends, with the rise in oil prices, the company is making strong profits, and is once again pursuing new drilling ventures.
Not only that, an Associated Press survey of researchers suggests that the health of the Gulf is almost back to normal; a remarkable turnaround for one year. The question is how does a company, even the 4th largest in the world, recover from a $40.9 billion dollar loss in less than a year?
While it’s hard to answer some of the questions, when it comes to the financial end, there may be a strong contributing factor-cheap labor, real cheap labor.
Recently, Nation magazine carried an article by Abe Louise Young asserting that BP could have certainly had their pick of local labor to help with the clean-up, or simply used their own staff. Instead, they hired prison labor.
Prison “labor” may actually be a misnomer, because it implies somebody being paid. Hiring inmates to do the work has consequences on several different levels, the biggest one on the American taxpayer.
Hiring inmate labor is a growing trend in corporate America, allowing companies such Dell, Microsoft, and Nike to compete with cheap labor in foreign markets. California, for example, makes jeans and other clothes that they export to Asia, ironically, doing exactly what the US has criticized China for. Federal law says an inmate must be paid a “prevailing wage” for work such as this, but, it doesn’t apply to exports. Consequently, the average inmate will make about $60.00 per month for a 45 hour week. Not only is that not a competitive wage, but many of the taxes and regulations that apply to corporate America aren’t in effect here, so the savings is even more dramatic.
In addition, refusing to participate in these programs can result in disciplinary proceedings against the inmate, including the withholding of “good time”, and movement to disciplinary units.
Also, on 4/18/11, the AP carried a story outlining various mystery illnesses that are being reported by many who have been involved in the clean-up, including vomiting, racing heartbeat, dizziness, and memory loss. These illnesses have been reported by prison labor as well as private.
In the end, so what? They’re only inmates, they’re in prison, they deserve what they get, right? Here’s the thing though; the American taxpayer may be getting it worse than anybody. First of all, these illnesses reported by the inmates will be paid for by the taxpayer, because that’s how prison works. But there’s more.
By using prison labor, BP can get away with paying as little as 10 cents per hour, rather than paying locals a real wage. In addition, by hiring “at risk employees”, BP can take a tax credit for as much $2500.oo per inmate. Not bad, unless you’re a taxpayer stuck at the other end of the cycle, and paying the bill.