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The Societal Impact of the Prison Industrial Complex, or Incarceration for Fun and Profit ... Mostly Profit

At the beginning of the 1980s there were no privately-operated adult correctional facilities in the United States. Today more than 127,600 state and federal prisoners are housed in for-profit lock-ups, prison privatization has become an acceptable practice, and the private prison industry is a multi-billion dollar business. How did this drastic expansion of incarceration-for-profit occur, and more importantly how has it rearranged the criminal justice landscape?

The prison and jail population in the United States has increased exponentially over the past several decades, from 648,000 in 1983 to more than 2.3 million as of mid-year 2009. That doesn’t include another 5 million on parole and probation, plus tens of thousands of citizens who were formerly incarcerated. Spending on prisons has outstripped expenditures on higher education in at least six states, including Michigan, Connecticut and California, as lawmakers engage in one-upmanship to prove who’s tougher on crime.

Why has our nation’s prison population grown to epic proportions, until the U.S. – with 4.5% of the world’s population – now has 23% of the world’s prisoners? The short answer is because imprisonment has become enormously profitable as a result of politically-influenced decisions as to who should be locked up and for how long. In the 1980s and 90s a series of tough-on-crime laws were enacted, spurred by the so-called War on Drugs and the corporate media’s constant and often sensationalistic coverage of violent crime. Those laws included mandatory minimum sentences, truth-in-sentencing statutes and three-strikes laws, which required lengthy prison terms or life sentences for certain offenders.

Consequently, more and more people were arrested, prosecuted, convicted and sent to prison, where they served longer amounts of time under harsher sentencing statutes. Concurrently, prison release policies became more restrictive; for example, parole in the federal prison system was abolished in 1987, and it became politically dangerous to release prisoners early on parole. With more people entering the prison system to serve longer sentences and fewer leaving, the U.S. prison population grew exponentially – increasing over 350% from 1983 to the present.

This prison population boom created a market for companies that found they could profit by providing correctional services, and a multi-billion dollar industry was born to capitalize on crime and punishment. This industry, known as the prison industrial complex, is composed of a confluence of businesses and special interest groups that collectively profit from imprisonment. The most overt members include private prisons firms like Corrections Corporation of America (CCA), GEO Group (formerly Wackenhut Corrections), MTC, Cornell (which is presently being acquired by GEO) and a bevy of other companies that operate detention facilities.

Beyond companies that own or operate prisons there are a number of other businesses that benefit from the prison boom – ranging from corporations that provide prison and jail food services (e.g., Aramark, Canteen); prison medical care (Prison Health Services, Correctional Medical Services); private probation supervision (Sentinel Offender Services) and prisoner transportation services (TransCor, PTS of America), to the banks and investment firms that provide bond financing for new prisons; the construction companies that build them; suppliers of razor wire, surveillance cameras and other security equipment, etc. In short, the expansion of the U.S. prison population created an enormously profitable market opportunity. CCA alone grossed $1.67 billion in revenue in 2009; its closest competitor, GEO Group, grossed $1.4 billion.

The private companies that compose the prison industrial complex have thus reaped substantial benefits by surfing the wave of overincarceration that has swept our nation’s criminal justice system. They are the ones that most obviously benefit from putting more people in prison for longer periods of time. But what are the side effects of for-profit incarceration as social policy?

Frustrating Prison Reform Efforts

Criminal justice policies in the U.S. are based in large part on capacity – that is, the capacity of state and federal prison systems, and the sentencing and parole policies that govern the number of prisoners entering and leaving prison. The need for prison beds created by our nation’s burgeoning prison population has outstripped existing capacity, leading states and the federal government to go on a prison-building binge and, when that solution failed to accommodate growing numbers of prisoners, to overcrowd correctional facilities by double or triple-bunking cells and installing beds in prison gyms, classrooms and even chapels.

However, overcrowding – which leads to increased violence, decreased access to medical care for prisoners and a host of other serious problems – can only go so far. At some point it becomes impossible or impractical to cram more prisoners into already-packed cells, and too expensive to build more prisons. Enter CCA, GEO Group and other companies that finance and build their own correctional facilities, which provide public prison systems with extra bed space capacity. Importantly, if private prison firms did not provide additional beds, then state and federal governments would be forced to address the harsh sentencing laws and prison release policies that have resulted in overincarceration and prison overcrowding.

Thus the private prison industry – the moving force behind the prison industrial complex – has served to stymie criminal justice reform efforts over the past several decades, particularly in regard to sentencing and prison release policies. Rather than being forced to deal with the repercussions of such policies, government officials have used private prisons as a safety valve. As an analogy, if our prison system was a bucket being filled to overflowing by a steady stream of prisoners, the extra bed space provided by the private prison industry allows prisoners to be siphoned off into another, for-profit bucket. So long as extra capacity is provided by private prisons, government officials can postpone dealing with the politically-unpopular issues of sentencing reform or releasing more people from prison.

Although private prisons house only 8% of state and federal prisoners, that is an important 8%. As of mid-year 2009 private prisons were utilized by the federal government and 29 states, of which some have become dependent on privatization to maintain their prison population levels. Ten states have 20% or more of their prisoners in for-profit facilities, including New Mexico (45.8%), Hawaii (35%) and Arizona (23.1%). The federal Bureau of Prisons houses 15% of its population in private prisons. By leveraging a relatively small number of beds nationwide, the private prison industry has managed to forestall much-needed criminal justice reform to address the problems of overincarceration and overcrowding in the U.S. prison system.

Creating Worse Criminals and Increasing Recidivism

Another deleterious aspect of the private prison industry is that, contrary to the claims of for-profit prison companies, prisoners held in privately-operated facilities are subjected to higher levels of violence. Also, when prisoners are released from such prisons they are less likely to be rehabilitated and more likely to recidivate.

Realizing why private prisons have higher levels of violence requires an understanding of the business model of the private prison industry and how the industry generates profit. At a basic level, public and private prisons have many similarities; after all, both require cell blocks, fences, security staff, medical units, etc. In terms of operating costs, approximately 70-75% of a prison’s expenses are related to staffing. Specifically, how many staff members are employed, how much they are paid, what benefits they receive, and the amount of training provided.

Since such a high percentage of operating expenses are related to staffing, that is where private prison firms cut costs to generate profit. On average they employ fewer staff members than comparable public prisons; they pay less than in the public sector; they offer fewer (or less costly) benefits; and they provide less training. These tactics undeniably reduce expenses for private prison operators and boost their bottom line, but at what cost?

There is substantial evidence to support the business model of the private prison industry as described above. For example, according to the 2000 Corrections Yearbook, the average starting salary for private prison officers was $17,628 while the average starting salary in public prisons was $23,002. More recently, when CCA announced plans not to renew its contract to operate the Hernando County Jail in Florida effective August 2010, the sheriff said he would resume control over the jail. He also said he would increase the salaries of qualified CCA employees retained at the facility by more than $7,000 annually, to bring them in line with the salaries of corrections deputies – indicating the pay differential between the public and private sector.

In terms of training for corrections employees, CCA vice president Ron Thompson stated in June 2010 that the company provided “a minimum of 200 hours of initial training, along with at least 40 hours of annual training.” However, this is significantly less than the training that prison employees in some state systems receive. California, for example, requires 640 hours of training over a 16-week period. Federal prison officers must complete 200 hours of training plus 120 hours of specialized training within 60 days of being appointed. The New Jersey Dept. of Corrections requires a “14-week, in-residence NJ Police Training Commission course.” In Tennessee, where CCA is headquartered, prison employees undergo 360 hours of initial training plus annual training. Less training allows private prison companies to cut costs, but at the expense of employing officers who are less prepared for work in a prison setting.

In regard to job benefits, private prison employees do not enjoy government retirement plans, civil service protection or generous health insurance available in the public sector.

As a result of paying lower wages, providing fewer benefits and supplying less training, private prisons have much higher staff turnover rates than their public counterparts. According to the last self-reported data from the private prison industry, published in the 2000 Corrections Yearbook, the average turnover rate at privately-operated facilities was 53%. The average rate in public prisons was 16%. More recently, a Texas Senate Committee on Criminal Justice report released in December 2008 found that the “correctional officer turnover rate at the seven private prisons [in Texas] was 90 percent (60 percent for the five privately-operated state jails), which in either case is higher than the 24 percent turnover rate for [state] correctional officers during FY 2008.”

High staff turnover rates, in turn, result in less experienced employees who lack institutional knowledge about the facilities where they work, and thus greater instability in private prisons. Higher turnover also leads to understaffing, as employees who resign or are terminated leave vacant positions that are not immediately filled. The 2000 Corrections Yearbook found that public prisons had an average prisoner-to-staff ratio of 5.6 to 1 compared to a ratio of 8 to 1 in private prisons, which reflects significantly less staff at privately-operated facilities.

Understaffing, instability and fewer experienced employees result in higher levels of violence. Several studies have shown that privately-operated prisons experience more violence, including a 2004 report in the Federal Probation Journal that found private prisons had more than twice as many inmate-on-inmate assaults than in public prisons, and a 2001 Bureau of Justice Assistance report that found private prisons had 65% more inmate-on-inmate assaults and 48% more inmate-on-staff assaults than public prisons with comparable security levels.

There is also anecdotal evidence that security problems and violence are more likely to occur at private prisons as a result of the industry’s business model, which leads to high staff turnover and thus inexperienced staff and greater institutional instability. As just one example, during a four-month period from May to September 2004, CCA experienced four major riots at prisons in Colorado, Oklahoma, Mississippi and Kentucky, plus a hostage-taking at a jail in Florida.

A report by the Department of Corrections following the uprising in Colorado found that just 33 CCA guards were watching over 1,122 prisoners at the time of the riot – a ratio 1/7th that at state prisons. Some CCA employees had literally been “on the job for two days or less.” The CCA facility had a 45% staff turnover rate, and CCA guards were paid an average salary of $1,818 per month compared with $2,774 for public prison officers. As indicated above, these deficiencies result from the business model of the private prison industry.

Certainly public prisons experience riots, violence and other problems, too – but the frequency and severity of such incidents in private prisons imply that such facilities are more prone to unrest and instability as a direct result of how the private prison industry cuts costs in order to generate profit.

A related issue concerns the rehabilitation of prisoners in privately-operated facilities. Consider that for-profit prison firms have a vested interest in maintaining – and increasing – the number of people behind bars. The sole purpose of companies like CCA and GEO Group is to make money, not to ensure public safety, aid in the rehabilitation of offenders or reduce recidivism and thereby decrease the amount of crime and victimization in our communities.

During CCA’s annual meeting on May 14, 2010, CCA vice president Dennis Bradby confirmed that the company had not conducted any studies to determine whether the rehabilitative programs offered at its for-profit prisons were effective in terms of reducing recidivism. Independent research, however, has found that private prison inmates have a higher rate of reoffending.

A 2003 study by the Florida Dept. of Corrections, Florida State University and Correctional Privatization Commission found that while there were no significant differences in recidivism rates among prisoners in private and public facilities, in “only one of thirty-six comparisons was there evidence that private prisons were more effective than public prisons in terms of reducing recidivism.” More tellingly, a research study published in Crime and Delinquency in 2008, which tracked over 23,000 prison releasees, found that “private prison inmates had a greater hazard of recidivism in all eight models tested, six of which were statistically significant.”

Thus, another effect of the private prison industry is that prisoners are subjected to higher levels of violence due to the way private prison firms cut staffing costs to generate profit. Further, while private prison companies benefit by keeping prisoners behind bars, those same prisoners are more likely to reoffend following their release – resulting in larger societal costs in terms of a recurring cycle of crime and incarceration that negatively impacts public safety.

Institutionalizing For-Profit Imprisonment

Perhaps the most deleterious effect of the private prison industry is that it has successfully legitimized the concept of for-profit incarceration. While people might question the notion of a privatized police force that benefits financially when people are arrested, allowing companies to profit from people’s imprisonment has become an accepted and normalized part of our nation’s criminal justice system.

Private prison companies and the ancillary businesses that support them do not operate in a vacuum, of course, nor are they solely responsible for crafting an industry that profits from incarceration. They certainly contribute to that state of affairs, though – sometimes literally. As with many other industries, private prison companies make campaign contributions to lawmakers and engage in political influence-peddling through lobbyists.

CCA, the nation’s largest private prison company, spent $2 million in 2009 on direct lobbying expenses on the federal level alone. The company and its employees further gave over $500,000 in federal political donations in the 2008 and 2010 election cycles, plus at least $540,000 on the state level during that same period. And that is just one company among many that comprise the prison industrial complex. By spending such large sums of money, the private prison industry is able to influence and obtain the support of legislators willing to further its goals of spending more money on prisons and expanding privatization in the criminal justice system.

Private prison companies also wield influence by hiring former public officials, mainly from corrections and law enforcement agencies, who use their connections to grease the political wheels that drive the private prison industrial machine. CCA employs the former director of Ohio’s prison system, the former Chief of Facility Operations for the New York City Dept. of Corrections, a former director and former assistant director of the federal Bureau of Prisons, a former deputy assistant secretary of defense for the U.S. Department of Defense, a former U.S. Senator, and Thurgood Marshall, Jr. – son of the late U.S. Supreme Court Justice, who served as Secretary to the Cabinet in the Clinton administration.

The private prison industry has further enlisted supposedly-impartial research allies to produce studies that laud the benefits of privatization. For example, the Reason Foundation, a Los Angeles-based libertarian think-tank that promotes privatization of government services, has received funding from private prison companies – which it neglects to mention in its research.

Discredited former University of Florida professor Charles Thomas, who operated an academic project in the 1990s that studied the private prison industry, also produced research favorable to private prison industry. It was subsequently discovered that Thomas owned stock in the prison companies he was studying, sat on the board of Prison Realty Trust (a CCA spin-off), and had been paid $3 million by Prison Realty/CCA. Thomas retired from his University position after these conflicts became known; he was later fined $20,000 by the Florida Commission on Ethics.

Additionally, members of the prison industrial complex have formed their own industry trade group, the Association of Private Correctional & Treatment Organizations. APCTO and CCA funded a Vanderbilt University study that, not surprisingly, found benefits from prison privatization.

More disturbingly, private prison companies have been accused of promoting harsh sentencing laws that result in more people going to prison for longer periods of time – which, of course, benefits the prison industrial complex. For example, in the 1990s and early 2000s, CCA executives John Rees and Brad Wiggins served on the Criminal Justice Task Force of the American Legislative Exchange Council (ALEC). ALEC is a powerful free-market organization that describes itself as a “public-private partnership” between state lawmakers and private-sector businesses. ALEC claims almost 2,000 lawmakers as members – one third of the nation’s state legislators – and over 250 private business and foundation members, including Wal-Mart, ExxonMobil and Phillip Morris.

ALEC produces model laws that are introduced by legislative members in their home states. The organization’s Criminal Justice Task Force (which has since been folded into the Public Safety and Elections Task Force) has drafted tough-on-crime model legislation for mandatory minimum laws, truth-in-sentencing laws, three-strike laws and habitual offender laws – all of which result in longer prison terms that directly contribute to overincarceration and prison overcrowding.

ALEC has also promoted model legislation to benefit the private prison industry, including the Private Correctional Facilities Act, which permits state governments to contract with private prison companies. Currently, CCA senior director of business development Laurie Shanblum is a member of ALEC’s Public Safety and Elections Task Force. CCA has denied that it influences legislation that results in longer prison sentences. However, why would a private prison company participate in ALEC’s public safety task force if not to influence criminal justice policy? The nation’s second-largest private prison operator, GEO Group, is also a member of ALEC.

By currying political favor through lobbying and substantial campaign contributions, funding researchers that produce supposedly-independent private prison studies, hiring former public officials, creating its own industry trade group and influencing criminal justice policy-making though participation in ALEC, the private prison industry has achieved legitimacy and ensured that profit trumps public policy when it comes to our nation’s criminal justice priorities.


This, then, is the egregious legacy of the prison industrial complex. While private prisons firms are only a small part of the overall corrections system in the United States, they have managed to hinder much-needed criminal justice reform – particularly in the areas of sentencing and prison release policies – by supplying additional bed space for overcrowded public prisons.

Inmates held in for-profit facilities are exposed to higher levels of violence due to the private prison industry’s business model of cutting staffing costs, which results in higher turnover rates, understaffing and instability, and inmates released from private prisons have higher recidivism rates, thus endangering public safety.

But the most harmful effect of private prison companies is that they have made imprisonment-for-profit politically and socially acceptable, thereby creating an insidious industry that benefits from incarceration while instilling the notion that justice literally is for sale and crime does in fact pay.

Hopefully, at some point in the future we will look back on the time when private prisons were considered sensible and wonder how such a destructive concept was allowed to exist. For now, though, we must deal with the harsh reality of the private prison industry, including its many flaws and harmful effects on prisoners, our justice system and society as a whole.

Alex Friedmann is the associate editor of Prison Legal News (, a monthly publication that reports on criminal justice issues. He also serves as president of the Private Corrections Institute (, a non-profit watchdog organization that opposes prison privatization. While incarcerated in the 1990s he served six years at a CCA-operated prison in Tennessee.

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