This is different than Sheriff Arpaio. In his jail everyone wore pink. This story is about a prisoners involved in "sexual misconduct" being assigned pink. The article didn't make it clear if this was for conduct in prison or for the crime which they were convicted.
MR. PINK: Why am I Mr. Pink? JOE: Cause you're a faggot.
Everybody laughs.
MR. PINK: Why can't we pick out our own colors?
JOE: I tried that once, it don't work. You get four guys fighting over who's gonna be Mr. Black.