Prisoners working in the Xinyuan Prison coal mine in Sichuan Province in 2006. The majority of prisoners incarcerated in the Laogai are subjected to a harsh regimen of labor in factories, mines, farms, or on construction projects. In fact, most Laogai camps are affiliated with commercial enterprises that operate as regular private or state-run enterprises, but in fact are managed by prison officials and use only prison labor. These enterprises typically have large profit margins as their work force is unpaid, and with profits going to the Chinese government either directly, if the enterprise is state-owned, or indirectly through tax revenues, Laogai enterprises create perverse incentives for the government to imprison the Chinese people for profit.

2006年摄于四川新源监狱下属煤矿。该监狱所囚的大部分犯人都被迫在各工厂、矿场、农场或基建工程工地上从事苦力劳动。事实上，绝大多数监狱旗下都有一些企业，由监狱派干部管理，且工人全部是劳改犯人，但对外却宣称为国营或私营企业。这些劳改企业往往因它们能获得免费劳动力资源而赚得巨额利润，而这些钱直接或间接地流入了当地政府的金库。因此，在利益的驱使下，中国政府需要源源不断地为监狱补充犯人员额。