a.) Immigrants out of prison are bad, because they do work for minimum wage or more.
b.) Immigrants in prison are good, because they do work for less then minimum wage.
> b.) Immigrants in prison are good, because they do work for less then minimum wage.
I think that (b) doesn't really respond to the argument. Those who worry that "the immigrants are taking our jobs" are worried precisely that immigrants will do 'our jobs' for less than we would, making it likely that an employer will hire them instead. The situation being described is precisely one where prisoners will do work for free, as a result of which no non-prisoner members of the community has a chance of being paid to do that work.
That said, I have absolutely no issue with prisoners working, long as they are paid an appropriate wage and the activity doesn't turn a profit for the prison. Either give all the profits to the prisoners in pay, or run the operation as a rehabilitation program at a net loss.
As to the idea of prison labor, there can be no revenue (not simply profit) from the prison system that is just. Society should pay a burden to separate those within itself from the rest. Any attempts to recoup costs (let alone profit) fall prey to a perverse incentive to keep prisoners longer than is absolutely necessary for the well-being of the Society.
I don't think we currently care about the well-being of Society, at least judged by how we treat prisoners. Our system of justice, at least in the United States, seeks punishment instead of rehabilitation.
Prisons also serve to punish and deter. Allowing inmates to earn market wages would make their punishment a lot lighter, especially for white-collars. Maximising "productivity" isn't and shouldn't be a priority for prisons.
I'm not really advocating for this, but it'd be one angle to consider.
Why do you think the market's price in this case is wrong or unfair?
> then nobody'll employ prisoners
I doubt that your conclusion follows this assertion. Paying prisoners a few dollars per hour vs. a few cents per hour is still a net win for the corporations. They might(not sure but knowing our system it's quite possible) get tax benefits for this too.
Paying a minimum wage is a start in the right direction, but ultimately the only moral endgame is abolishing forced labor and reducing the prison population drastically.
> Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
We don't even need to wonder if it would work. We can look at other countries for proof (and if you want proof our methods don't work, you can look around, too).