A groundbreaking study by the Columbia Labor Lab has quantified what workers in Alabama’s automotive corridor have long suspected: the use of incarcerated laborers in Hyundai Motor Group’s supply chain has suppressed wages for non-incarcerated workers by 7 to 9 percent, a finding with implications for the broader debate over prison labor in American manufacturing.
How Prison Labor Enters the Supply Chain
Through the Alabama Department of Corrections’ work-release program, incarcerated individuals are housed in minimum-security facilities and transported to private factories, where they work alongside free employees in plain clothes and without officer supervision. They produce components including vehicle consoles, dash assemblies, and wiring harnesses for companies in Hyundai’s Southern supply chain.
The study, released in November 2025 and based on a survey of more than 600 workers combined with government data and public records, found that a 10 percent increase in the share of incarcerated workers at a plant was associated with a 10 to 14 percent decrease in wages for non-incarcerated workers at the same facility. In the Montgomery area, where Hyundai’s suppliers are concentrated, auto supplier wages were 7 to 9 percent lower than expected compared to similar positions elsewhere in Alabama and neighboring states.
Safety Failures and Exploitation
The research documented alarming safety conditions. One incarcerated worker broke his hand and four ribs in two separate accidents and received no safety training before being assigned to operate production lines. Because incarcerated workers cannot quit over low pay or dangerous conditions, their presence gives employers leverage to lower standards for all employees, the study found.
Incarcerated workers in the program earned a fraction of prevailing wages. Under Alabama law, the Department of Corrections can claim up to 40 percent of an incarcerated worker’s wages for “room and board,” with additional deductions for court costs, restitution, and other fees. Nationally, incarcerated workers earn an average of 13 to 52 cents per hour, according to the ACLU’s 2022 report “Captive Labor.”
Hyundai’s Response and Broader Fallout
After mounting legal and public pressure, Hyundai stated that none of its suppliers have used prison labor since September 2024. One key supplier, SL Alabama, ended its work-release contract with the Alabama Department of Corrections in December 2024. Jobs to Move America subsequently filed a lawsuit against Hyundai and Kia alleging the use of both prison and child labor in their U.S. supply chains.
The Alabama case is not isolated. The ACLU has documented that two out of three incarcerated people in state and federal prisons — more than 800,000 individuals — work during their incarceration, generating an estimated $11 billion in goods and services annually. Incarcerated workers are excluded from minimum wage protections, overtime pay, and the right to unionize. They are denied workplace safety guarantees available to all other American workers.
A circuit split on whether the Fair Labor Standards Act applies to incarcerated workers remains unresolved. The Fourth Circuit ruled in 2024 that the FLSA can apply when incarcerated workers are employed outside prison walls — a decision that could open the door to minimum wage claims by work-release participants nationwide.
Senator Cory Booker has introduced a package of bills aimed at ending unfair labor practices in correctional facilities, including provisions that would extend federal labor protections to incarcerated workers and require transparency in government and private contracts that use prison labor.
For more on prison conditions in Alabama, visit our Alabama directory.
