Sales of hand sanitizer spiked by 313% in one week—now New York State is making its own with prison labor

New York Gov. Andrew Cuomo, right, introduces "New York State Clean," a hand sanitizer manufactured by the state of New York in response to shortages of the alcohol- based substance, during a news conference update on the coronavirus, Monday, March 9, 2020, in Albany, N.Y.
Marina Villeneuve | AP

The fear of coronavirus, and its impact on global supply chains, has led to significant spikes in sales of specific products, including hand sanitizer. 

According to the most recent data from Nielsen provided to CNBC Make It, the total U.S. dollar sales of hand sanitizer increased by 313.4% between February 22 and February 29. 

On March 5, a 12-ounce Purell bottle, which typically retails for around $4.50, was selling for $50 a bottle on Amazon. Amazon has since pledged to crack down on price gouging and has suspended many sellers for overcharging.

Now, the State of New York is trying to combat this problem by producing its own hand sanitizer called "New York State Clean" with the use of prison labor. 

In a press conference Monday, New York Governor Andrew Cuomo announced that New York State has 142 confirmed cases of coronavirus and the state is rolling out its own line of hand sanitizer that is 75% alcohol, with a plan to produce 100,000 gallons per week.

The hand sanitizer is being produced at the Great Meadow Correctional Facility in Washington County, New York through a business called Corcraft, which describes itself as "an entity within the NYS Department of Corrections and Community Supervision."

Historically, New York inmates were paid an average of 65 cents per hour for their work with Corecraft, which activists have described as "slave labor." 

There has been some criticism over the state's decision to use prison labor, when it has been reported prisoners themselves don't have access to soap or hand sanitizer, and there are fears of the coronavirus spreading among prison inmates.

According to Cuomo, it costs $6.10 to produce one gallon of New York's hand sanitizer and it will be provided for free to governmental agencies, school districts, the MTA and prisons. 

"We're hearing from local governments that they're having trouble getting it," said Cuomo during the press conference. "To Purell and Mr. Amazon and Mr. eBay, if you continue the price gouging, we will introduce our product, which is superior to your product." 

"It's much cheaper for us to make it ourselves than to buy it on the open market," Cuomo said. 

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don't miss:

Michael Horn: How to tell if your degree is worth the money
Michael Horn: How to tell if your degree is worth the money