Believe it or not, a huge number of incarcerated people would rather work (without pay) than sit around doing nothing. For the few that don't, you can certainly incentivize it without resorting to torture.
The prisoners wouldn’t mind working for more pay, but most of them do like it considering the options.
Another part is just accounting - if the federal government paid its employees tax free (no fed income tax) it would work out the same (salaries would drop) but the accounting would be different and people would complain.
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.
> you can certainly incentivize it without resorting to torture.
How?