Earlier quoted context omitted.
I think the means are ethical, as well as the ends. At the end of the day, I dont think each of the things you said are true. I dont think there is wage competition, I dont think the state is setting sentences based on labor demands, and I dont think there is an impact to locations of habitation.
Then that is the basis of our disagreement. I can’t consider the practice ethical given my understanding of economics, human nature, and history. These two Wikipedia pages show examples of why I don’t think this practice is ethical. https://en.m.wikipedia.org/wiki/Penal_labor_in_the_United_St... https://en.m.wikipedia.org/wiki/Black_Codes_(United_States)
However, I do agree that the moral hazards are too great around combining it with for-profit prisons and corporations.
I think the one area where I would find private employment acceptable is work release programs at market rate, provided the pay goes to the prisoners instead of the state. I think these programs should be expanded, and could help with child support, victim restitution, and stability upon release.