Cheap labor is still valuable, I don't know what to tell you. 20k salary net is very cheap. I don't know why you think it's expensive, because it's not. What you're maybe missing is the job needs to be done regardless - it's not like if we stop using prisoners for labor that need for labor just - poof - disappears.
Do you mean that the benefit of cheap labor goes to private companies, but the cost stays with the taxpayers? If so, I see the logic. If we are talking about imprisoning someone, because we get cheaper labor for example inside the prison, than that doesn't make sense. Of course I count that the job needs to be done.
Scenario A (person not imprisoned):
- Prison cost: $0
- Labor cost: $25k (hire someone)
- Total cost: $25k
Scenario B (person imprisoned):
- Prison cost: $50k
- Labor cost: $0 (prisoner does it)
- Total cost: $50k