"The war on drugs is reducing the amount of labor available. If we follow the principles of supply and demand-- if Business Owners wants to pay employees less, then they want _more_ people to be available to work, and they also want those people to have lower cost of living."

If you suddenly have a lower cost of living you have increased your negotiating leverage. This often leads to higher wages.

Similarly, increasing people's desperation commensurately decreases their wages.

Penal labor is, incidentally, big business:

https://en.wikipedia.org/wiki/Penal_labor_in_the_United_Stat...