But why not pay them? Perhaps you cannot pay market wages without a being a competitive capitalist enterprise, but surely there is a point where access to subsidized labor allows you to break even, paying them, say $3 or $5 an hour.

And perhaps you cannot pay them in cash, but why not invest the money for the duration of their incarceration, or pay a stipend to some dependent on the outside, like a wife/child? A $10k/year rate of savings is above what many people achieve outside, and a massive boost to get one's life in order once they get out.