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New Study Indicates Annual Cost of Incarceration Exceeds $1 Trillion

by Audry Spade

A new research study has estimated the total cost of incarceration in the United States has surged to a staggering $1 trillion per year – 11 times the $80 billion spent annually on corrections alone, and 6% of the nation’s gross domestic product (GDP).

For many families across the United States, the high cost of incarceration is nothing new. But while prior research has made an effort to determine the total cost of crime, it wasn’t until recently, in a study conducted by the Institute for Advancing Justice Research and InnovationatWashington University in St. Louis, that the various societal costs of incarceration were factored in – things like lost wages and increased criminology among the children of incarcerated parents, as well as other collateral expenses.

Indeed, it turns out the true cost of removing millions of people from their communities and confining them in detention facilities across the nation is costing more than anyone had estimated previously.

Perhaps even more alarming, researchers also found that more than half of those costs are being shouldered directly by prisoners, their families and their communities – leaving already poor households even more impoverished. Many affected families live beneath the federal poverty line as it is, and are the same families that struggle the most beneath the massive financial burdens of incarceration – everything from paying bail bonds and raising the children of incarcerated parents, to the costs of prison and jail phone calls and fees to place money on prisoners’ institutional accounts.

According to the study, an estimated $923 billion in incarceration-related costs are not factored into annual government budgets. Those hundreds of billions of “invisible dollars” are an enormous drain on overall social welfare, and account for more than 90% of the overall cost of incarceration. Due to the incomplete data that lawmakers have received previously regarding incarceration costs, they have vastly undercounted the financial impact of decades of harsh sentencing laws and soaring prison populations.

According to the report, from an economic perspective, “... social welfare is maximized when incarceration is supplied at the level where the marginal social benefit equals the marginal social cost. Underestimating the cost of incarceration by ignoring hundreds of billions of dollars in costs could cause incarceration to be oversupplied, resulting in a level of incarceration beyond that which is socially optimal.” 

Source: “The Economic Burden of Incarceration in the U.S.,” Institute for Advancing Justice Research and Innovation (October 2016) 


 

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