Should Corporations Hire Prisoners?

I hear someone toss around this idea every few years.

Behind the barbed-wire fence surrounding the Federal Correctional Institution at Elkton, Ohio, inmates sit at a long table stripping down old computers, salvaging valuable bits of gold and platinum. In another room prisoners clad in protective suits hammer away at monitor screens and cathode tubes, the smashed glass destined for sale to reprocessors. Computer recycling is difficult, labor-intensive work—exactly the type now being exported to China and other bastions of cheap labor. But Elkton gets business from government agencies and schools precisely because it can compete with Third World wages. In fact, other state and federal prisons have also gone into business, making products for companies such as Home Depot and Lowe's.

In some ways it is a good idea, and makes sense. And it is one way we can have American laborers earn wages that make them competitive with developing countries. But my concern is, if we do too much of this, will it eventually grow to the point that it takes jobs away from unskilled but non-criminal Americans? Imagine reading news stories of people going to jail just so they could have a job. I am sure we have quite a way to go before we reach that point, though, so for now it sounds like a good idea.