From a pure problem-solving standpoint, we could and probably should raise that rate by a few dollars to be put in a trust disbursed upon release to give inmates a better chance at landing some accommodation and runway to find a proper job, such that “sell drugs” doesn’t become an immediate obvious option.
Generously, the poor rate of pay seems almost the same situation as the lagging minimum wage rate. It may have once been enough (a long long time ago.) I recall reading Alcatraz inmate autobiographies as a child and recall them leaving a 10 year bank robbery sentence with enough money to find an apartment and a down payment on transportation.
Perhaps a better implementation would be $0.25 per hour goes into a canteen fund for goodies and another $4.25 per hour goes into your release trust fund? Still below minimum wage to appease any notion of inmates getting one over on hard work at the bottom rung but a rate that would possible give a chance for a successful restart.
Of course given fair wages, there would be outcry from the unincarcerated as to why they can't do those jobs for the state.