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Don't Build It Here - The Hype Versus the Reality of Prisons and Local Employment

Don't Build it Here - The Hype Versus the Reality of Prisons and Local Employment

by Clayton Mosher, Gregory Hooks, and Peter Wood

Fueled by the war on drugs, Draconian sentencing policies, and more general get tough on crime policies, the United States has experienced phenomenal growth in prison populations over the last two decades. As of June 30, 2002, there were more than two million prisoners in prisons and jails in the United States; 1,355,748 prisoners were housed in state or federal facilities, with an additional 665,745 in local municipal and county jails. This represents a more than six-fold increase in the number of prisoners over a 30-year period. More than 5.6 million Americans, or one in 37 adults, are currently in prison or have previously served time in a prison. The disproportionate racial impact of this imprisonment binge exacerbates the tragedy. In 1999, over 44 percent of the prisoners in state and federal prisons and local jails were African-American, and fully 11 percent of black males in the 25-34 age group were incarcerated in that year. While not as severe as those for black males, the imprisonment rates for African-American women, Hispanics, and Native-Americans have also been increasing in recent years. In order to house this growing number of prisoners, approximately one thousand new prisons and jails have been built in the last two decades, with much of the construction occurring in rural areas. According to the Economic Research Service of the Department of Agriculture, 245 prisons opened in 212 of the nation's 2,290 rural counties between 1991 and 2001.

Over the past two decades, prison hosting has been advertised as a sure-fire catalyst for economic recovery and growth, particularly for economically depressed rural areas that have seen a loss in primary industry jobs. A brochure published in 1989 by the California Department of Corrections designed to encourage communities to host prisons asserted that prisons brought economic benefits - "including 600 to 1,000 new jobs and an annual payroll of $20 to $52 million, a large share of which remains in the community." Similarly, an article discussing prison construction in the state of New York claimed that a typical 500-bed correctional facility employs 350 people with an annual payroll of $12 million - "in rural counties of northern New York, existing correctional facilities are contributing $75 million to the local economy."

Belief in the positive economic impact of prisons is so strong that a town in Illinois composed a rap song and purchased television advertising as part of a public relations blitz for legislators deciding where to locate a prison. In Texas, students in a Sunday school class reportedly got on their knees and prayed that a new prison would open in their area. In the same state, some towns offered free golf club memberships to prospective prison officials if the facilities were located there. In California, approximately 140 residents of a southern community traveled more than 600 miles to the state capital in Sacramento to hold a rally, chanting "we want the prison." In the mid-1990s, 19 communities in Washington State were competing for a juvenile rehabilitation center; in Florida, 15 towns offered free land for a new state prison; in Missouri, 12 communities were vying for three prisons. In a 1999 "prison derby" in the state of Illinois, 27 communities competed to secure a new prison. And communities that win the "prison prize" appear to be eternally grateful. For example, in Tamms, Illinois, which houses the state's supermaximum prison, a billboard for the local bank promised "super-max-imum savings," while a local restaurant offered the "supermax burger" on its menu. A billboard outside Tamms displays the message "Welcome to Tamms, the Home of the Supermax - Thank You Governor Edgar."

Do Prisons Deliver? - A National Study of the Economic Impact of Prisons

While in recent years prisons have been almost universally viewed as economic panaceas for struggling communities, very little empirical analysis has been undertaken to determine whether they deliver the purported economic benefits. Most studies examining the economic impact of prisons have been based on a limited number of correctional facilities in a limited number of jurisdictions. In order to address this deficiency, our research involved the collection of data on all existing and new prisons built in the United States since 1960. In our article (Gregory Hooks, Clayton Mosher, Thomas Rotolo, and Linda Labao, The Prison Industry: Carceral Expansion and Employment in U.S. Counties, 1969-1994 ) which appeared in the journal Social Science Quarterly (2004 v 85:37-57) we examined the impact of prisons on employment growth in the approximately 3,100 counties in the contiguous United States for the 1969 to 1994 period. Given that the tendency to lobby for prisons has been more common in rural jurisdictions, our statistical analyses compared metropolitan with non-metropolitan counties. In the first set of analyses, we examined income per capita, total earnings, and total employment growth (without statistically controlling for other factors that could affect economic growth). Among urban counties, there was little difference in the average annual change in income per capita between counties housing a prison and those not housing a prison. We also found that urban counties without a prison had the highest annual rate of growth, while those with a newly built prison grew at the slowest pace. In rural counties, for both income per capita and total earnings, those without a prison grew at a faster pace, and employment grew more slowly in counties in which a new prison was built.

Our next set of analyses attempted to isolate the impact of prisons on employment growth by introducing a number of statistical controls for other potential influences on economic growth in counties. Controlling for a number of social, geographical, and economic factors that could affect employment growth, including population size, economic infrastructure, and the educational level of the workforce, among others, our statistical analyses examined employment growth, again comparing metropolitan and non-metropolitan counties. The analyses with statistical controls determined that prisons did not play a prominent role in employment growth. For non-metropolitan counties - the counties in which the majority of prisons have been built in recent years and the counties that have typically been the ones competing to attract prisons in order to boost local economic growth - there is no evidence that prisons have had a positive impact. Neither established or newly built prisons made a significant contribution to employment growth in rural counties.

Even if prison construction does not have a positive impact on employment for all non-metropolitan counties, it is possible that prisons could provide tangible benefits to the most economically-depressed rural counties. To explore this possibility, we distinguished non-metropolitan counties experiencing slow employment growth during the previous decade from those growing at a faster pace. Our analyses showed that among faster growing counties, there was no evidence that prisons made a significant contribution to a change in total employment. Among the slower-growing counties, prisons appeared to do more harm than good - new prisons in these counties actually impeded private sector and total employment growth.

Although it has largely focused on smaller geographical areas, additional research has supported our primary finding that prisons do not contribute to economic growth. For example, in New York State, a recent Sentencing Project report by Ryan King, Marc Mauer, and Tracy Huling on the impact of 38 new prisons that opened between 1982 and 2000 found no substantive or statistically significant impact of prison construction on reducing unemployment, nor were there positive effects with respect to per capita income. Similarly, a report on the impact of prison construction in Missouri found that, aside from the expected increases in population in jurisdictions with prisons (primarily as a result of the arrival of prisoners in these jurisdictions), counties with prisons evidenced no increases in personal income, and actually had larger increases in unemployment, than counties without prisons.

Why Have Prisons Failed to Provide Economic Benefits?

Our analyses did not allow us to determine why prisons did not result in the economic benefits they were purported to offer. We speculated, however, that one possible explanation is that prison construction may serve to crowd out alternative economic activity. With communities in a number of states competing to attract prisons, corrections bureaucracies are shifting infrastructure costs to local governments. In order to attract prisons, communities are forced to supply the facilities with electrical services, roads, and other things necessary to operate these facilities. Under such pressures, rural counties desperate for jobs are diverting substantial portions of what in most cases are already limited infrastructure budgets to support a correctional facility. As a result, the infrastructure may be ill-suited for other potential employers, and local governments may have few remaining funds for additional investments in local infrastructure.

A second possible explanation for the lack of positive impact of prisons on economic growth, confirmed in the previously mentioned Sentencing Project study of prison construction in New York and at least two other studies, is that the jobs created by prison siting - both those related to facility construction itself and jobs within the prisons, are not taken by local residents. Most prison construction firms are from out of state and typically bring their work crews with them. Construction workers, especially on large projects, are a highly mobile and skilled workforce that moves with their employer to new construction sites. With respect to the jobs within correctional institutions, the Sentencing Project study noted that jobs in rural prisons are highly desirable, so that prisons can have seniority waiting lists of several years. This report noted that in Malone, New York, most of the 750 prison jobs went to people outside the town because of prison seniority rules. Malone's Director of Community Development commented "Did we get 750 jobs? We didn't get 100." In essence, King, Mauer, and Huling conclude that the effect of a prison in a community is largely artificial in nature and amounts to an employment transfer. Ruthie Gilmore's study of prison towns in California similarly found that less than 20 percent of the jobs on average are taken by current residents of a town with a new prison.

Prisons also fail to create jobs in rural areas because they have limited economic multiplier effects. Prison workers may not choose to live in the community that hosts the prison - one study estimates that 60 percent of such workers move from elsewhere - but rarely end up residing in the actual prison town. These workers are more likely to live in neighboring communities (up to 50 miles away) that offer more amenities but have no prison. Thus, their consumer behaviors (shopping, banking, housing, etc.) will have more of an impact on markets outside the prison community.

Another possible reason for the lack of positive economic benefit of prisons is the existence of prison industries - as Tracy Huling notes, prisons may actually pit local residents in competition with prisoners for employment. All 50 states now operate their own prison industries, and there is a wide range of work activities engaged in by prisoners. Among the prominent companies that use, or have used, prison labor are Dell Computers, the Parke-Davis and Upjohn pharmaceutical companies, Toys `R Us, Chevron, IBM, Motorola, Compaq, Texas Instruments, Honeywell, Microsoft, Victoria's Secret, Boeing, Nintendo, and Starbucks. Prisoners in California have served as booking agents for TransWorld Airlines, while Microsoft has used prisoners to assist in the shipping of Windows software. Honda pays $2 an hour to prisoners in Ohio to do the same jobs that members of the United Auto Workers Union were once paid $20 an hour to do. Correctional officials in some states such as Washington even advertised their prisoners by asking "Are you experiencing high employee turnover? Worried about the cost of employee benefits? Getting hit by overseas competition? Having trouble motivating your workforce? Thinking about expansion space? Then the Washington State Department of Corrections Private Sector Partnerships is for You." [ Editor's Note: A Washington State Supreme Court decision in May of 2004 held that the state's free venture prison labor program was unconstitutional.]

Oregon is a state which perhaps best exemplifies the prominence of prison industries and the negative impact of prisoner labor on public and private sector jobs. In 1994, Oregon voters approved Ballot Measure 17, requiring that all prisoners in the state work 40 hours per week, and that the state's prisoner work programs be conducted such that they would realize a net profit. Gordon Lafer notes that in Oregon State, thousands of previous public sector jobs are being filled by prisoners, who are now responsible for all data entry and record keeping in the Secretary of State's corporate division. Prisoners also answer the phones when members of the public inquire about corporate records, and state agencies employ prisoners for desktop publishing, digital mapping, and computer-aided design work. In the same state, companies can hire prisoner work crews. At least partially as a result of the fact that a prominent company in Linn County, Oregon was relying on prisoner labor, the county lost approximately 1,000 jobs in the four-year period spanning 1997-2001. In this particular case, given that a crew of prisoner workers costs $400 per day, Linn County Mills saved $466,000 off the cost of minimum wage, plus 30 percent payroll taxes over a one-year period. If the costs of using prisoners were compared with normal wages, the company saved between $600,000 and $900,000. Money that enhanced its profitability and its bottom line.

There are also several examples of companies that locate within prisons and subsequently close down their outside operations. For example, the Texas based company American Microelectronics employed approximately 150 workers at its headquarters in Austin as well as their branch operation in Lockhart prison. After shutting down their operations for 45 days, the company permanently closed their Austin headquarters and moved the entire operation to Lockhart prison. In Washington State, Omega Pacific, a carabiner manufacturing company, laid off 30 workers from its Redmond plant near Seattle and moved to the Airway Heights Corrections Center near Spokane. Interestingly, the company's catalog indicated that its products came from "Our new home located on an arid plateau above the Spokane Valley" - but neglected to mention that this new home was inside a prison. In Wisconsin, the Fabry company employed 205 workers at three plants in the Green Bay area in 1996. By April of 1997, less than one year after the company began hiring prisoners, it had reduced its labor force at these plants to 120 employees. The company also reduced the wages of its remaining employees by up to $5.50 per hour. In Georgia, a recycling plant fired workers who were originally hired as part of a welfare-to-work program and replaced them with prison labor.

Additional evidence that the presence of prisons may lead to lower levels of employment in communities in which prisons are located was provided (inadvertently, we believe) by the mayor of Connell, Washington (where the Coyote Ridge Correctional Center is located). In an interview with an Associated Press reporter who had documented our findings that prisons did not provide economic benefits, the mayor noted that prison work crews were paid $1.10 an hour to help maintain the city's public works and commented "If it wasn't for them, we wouldn't be able to keep our parks up."

The Future

Our analyses and a growing body of research have served to dispel the myth that prisons are associated with economic benefits, and communities considering prison siting need to be aware of that the rhetoric does not match the reality. We are encouraged by the fact that the previously mentioned Associated Press report on our research generated a considerable amount of interest on the part of numerous groups across the United States who were actively engaged in opposing prison construction in their communities, several of whom contacted us requesting copies of our article. We are also encouraged by the fact that a number of states have recently altered their sentencing policies (especially with respect to drug offenses) to reduce the number of individuals subject to incarceration. While it appears that these changes have been motivated primarily by fiscal considerations, it is possible that at least some public officials have realized that any economy based on human punishment is an inherently perverse one.

Clayton Mosher is an Associate Professor in the Department of Sociology at the Washington State University Vancouver. His research interests include the interactions between race, crime, and criminal justice outcomes, inequality in the criminal justice system, and the sociology of drugs and drug policies. His book THE MISMEASURE OF CRIME (with Terance D. Miethe and Dretha Phillips) was recently published by Sage.

Gregory Hooks is Professor and Chair of the Sociology Department at the Washington State University. This research into prisons is part of his larger focus on the strategies and consequences of regional growth with an emphasis on the impact of military facilities.

Peter Wood is Associate Professor of Sociology and Director of the Program in Criminal Justice and Corrections at Mississippi State University. His research includes the study of issues related to correctional policy and practice, and the impact of criminal justice sanctions on the behaviors and decision-making processes of adjudicated offenders. His work has appeared in Justice Quarterly, Criminology, Crime and Delinquency, and the Prison Journal.

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