A 1987 survey of all 50 States found 38 private-sector prison industries operating in 26 prisons in 14 State correctional systems and 2 county jails. This represents an increase in the number of projects over the past 2 years, although the number of inmates working remained virtually the same. These prison industries result in demonstrable benefits for everyone involved. For correctional systems, they provide a means of reducing inmate idleness at relatively low cost. For prisons, they provide access to private-sector expertise and have a positive impact on the institutional environment. For inmates, such programs provide a chance to earn real-world wages while gaining training and experiences that enhance the possibility of employment after release. The private sector gains access to a labor force that can rapidly meet production and service needs. For taxpayers, funds generated through wage deductions offset the costs of incarceration, compensate crime victims, help support inmates' families, and contribute to revenues through State and Federal taxes. A model for private-sector prison industries is presented in which private and public capital are used for funding, the industry is managed by a private firm on prison grounds, and inmates are paid at least minimum wage, and tax and benefit requirements are observed. 81-item annotated bibliography. (Author abstract modified)