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The Punishment Economy: Winners and Losers in the Business of Mass Incarceration

by Daniel A. Rosen

“This is an industry that profits from human suffering.”

—David Fathi, Director, ACLU’s
National Prison Project

Starting with math may be a bad idea, but numbers help tell this story: In Virginia, keeping the average prisoner behind bars costs taxpayers about $30,000 per year; in some states like New York or California it’s twice that much. Prisoners over 50 years old with chronic health problems cost taxpayers as much as $150,000 a year. Yet experts have long agreed that most criminals “age out” of committing new offenses by then.

Prisoners are also worth a lot of money—there’s a price tag on their heads of many, many thousands of dollars—to those who make money off of punishment. In Virginia alone it’s a billion-dollar-a-year economy ripe for profiteering. While it’s difficult to calculate an offender’s exact value to prison profiteers, it’s worth exploring the contours of that lucrative ecosystem and reviewing who benefits and who’s harmed.

A few more numbers, to underline the scale of the issue: Police will make 11.5 million arrests this year—on average, a pair of handcuffs used every three seconds of every day. Over 77 million Americans, one of every three adults, now have a criminal record. Each one of those arrestees represented a series of business opportunities: they needed a lawyer, a bail bond, a jumpsuit, a mattress, a jail phone account, linens, commissary food and hygiene items, some prescriptions, and more.

One in eight jobs in this country relies on punishing fellow citizens, by some estimates. There are directly-related jobs like prison guards, prosecutors, bail bondsmen, and probation officers of course. But there are innumerable less obvious punishment-related jobs just one step removed: the employees of prison telecoms (Global Tel*Link, Securus, IC Solutions); commercial food service companies (Trinity, Aramark, Canteen Correctional); pharmacies and health companies that market to “corrections” agencies (Diamond, Corizon, Wellpath), makers of cheap jumpsuits and linens and foam mats (Bob Barker Co.); private prisoner transport (TransCor, PTS of America); commissary services (Keefe, Union Supply); and financial services like release debit cards (Numi, JPay, ReleasePay).

U.S. taxpayers spend well over $80 billion dollars a year benefitting these companies and many others to lock up our fellow Americans—and those are just the most direct costs of physically penning roughly 2 million prisoners. That dollar figure doesn’t consider untold long-term costs like building and maintaining more than 6,000 new jails and prisons over the last 40 years, paying out pensions for retired prison staff, or servicing the debt on municipal bonds financing prison construction. Nor does the $80 billion count expenses borne by prisoners and families: court costs and fines, pay-to-stay fees in lockups, phone calls and emails, visits, canteen items, and more.

In 1980, the direct costs of incarceration totaled just $6 billion. We now spend $9 billion alone just to keep 100,000 senior citizens behind bars—50 percent more than we spent locking up all prisoners 40 years ago. Where is that $80 billion-plus dollars going? Is it keeping American communities safer, or are we just producing greater corporate profits at American families’ expense?

Besides consumables like blankets and jumpsuits, repeat customers are really all the prison-industrial complex churns out. Recidivists are the primary ‘product’ of the punishment economy and the real source of its profits. No other conclusion fits when over two-thirds of those released will be back within a few years. If any other large-scale public enterprise had a track record that dismal we’d demand its immediate overhaul. To the companies feeding at that bountiful trough it’s not dismal at all, of course—it’s their lifeblood. The revolving door keeps their personnel employed and their stock prices and profits on a steady incline.

Purchasing Power

The carceral system in America is managed primarily by states, and that’s where 90 percent of prisoners serve their time. Public officials with power at that level benefit from the punishment economy’s largesse and have a vested interest in minimizing scrutiny of the results. Those with loved ones behind bars who pay taxes for that privilege have little political power to change how business is done in statehouses.

A recent news investigation in Virginia illustrated this cozy arrangement perfectly. ABC News found the GEO Group had been badly deficient in staffing the privately-run Lawrenceville Correctional Center with guards and nurses, per the company’s contract with the state. GEO has gladly paid hundreds of thousands of dollars in penalties over the last few years due to that short-staffing; it still costs them less than full staffing would. Personnel is the single biggest expense for GEO and other private prison companies, and reducing staff is the best way to maximize profit. Of course, it’s also the best way to ensure prisoners are less safe and lacking medical attention.

Worse, the same investigation found that a proposed 2021 Virginia state Senate bill outlawing the use of private prisons was killed in committee by nine state senators who’d received campaign donations from GEO. Some of those checks were for as little as $250 dollars, which probably seemed like a pretty reasonable investment to GEO executives.

Talk Isn’t Cheap

One of the other winners is certainly billionaire Tom Gores, owner of the Detroit Pistons. He’s the founder of Platinum Equity, a private firm with $23 billion under management. Platinum owns Aventiv, which provides communications and funds transfer services to jails and prisons. Aventiv is the parent company of both Securus Technologies and JPay, both of which gouge prisoners and families for their monopolistic services.

Securus provides telecom services to about 1.2 million offenders in 3,400 lockups—half of those incarcerated in the U.S. It boasts that its phone rates are capped at $13.65 for a 15-minute call and that those calls average $3.57. Securus, like all prison phone providers, claims the high costs are for recording and monitoring calls. In reality, many of these dollars are returned to jails and prisons in the form of “commissions”—another word for kickbacks—that help the companies win contracts in the first place.

American families are the ones paying an average of $100 dollars a month for the privilege of a daily phone call to see if their loved ones behind bars are alright. Also illustrative: in 2018, Securus signed a contract with the Illinois prison system to provide telecom services at $.01 cent per minute—a contract under which Securus still turns a profit. So those recording and monitoring costs can’t be as high as they often claim.

In the past several years, Securus has expanded its business to provide “video visitation” at jails and prisons, charging visitors up to $1 per minute for the privilege. Mind you, in-person visitation is usually free—but Securus has also lobbied corrections departments to end in-person visits, on the grounds that the video version is safer. Never mind that it’s in no way a satisfactory substitute for the embrace of a loved one.

If Securus were offering extra convenience for its service, some profit might be understandable. But many jails and prisons require visitors to show up and use on-site video equipment anyway, so that authorities can monitor the interactions more easily. A 2017 report by the Here Institute found that video calls averaged $12.95, a cost so prohibitive that 90 percent of prisoners haven’t bothered.

JPay is another example of Aventiv’s profiteering at the expense of prisoners and families. JPay’s services are used by offenders at many prisons for funds transfers, “email” kiosks, media players to download music, pictures, and games, and release debit cards. All these avenues earn JPay outrageous fees by charging the kind of high service costs that a monopoly affords. A single email can cost anywhere from $.25 to $.39 cents, and a $200 money transfer to an offender account earns JPay anywhere from $8 to $13 dollars.

JPay also provides tablets and MP3 media players—cheap Chinese-made products that malfunction constantly requiring replacement at prisoner expense—again for hefty fees. The players and tablets are often the only way they can receive cards and photos—for an added fee, of course—since many prison systems no longer allow those items to be sent by mail. Officials claim that the ban prevents drugs from coming through the mail—but unsurprisingly, drugs continue to enter prisons and jails through smuggling by guards and staff.

This kind of profiteering by Securus and JPay aren’t isolated examples. They’re emblematic of a system that’s been allowed to flourish for too long in this country, where hedge fund and private equity billionaires like Gores profit off the misery of families with loved ones behind bars. When NBA players protest about social justice issues, they might want to include a pointed message to Gores and other team owners who profit off these enterprises.

Other prison phone companies are no better. Securus’ main competitor is Global Tel*Link (GTL), owned by private equity firm American Securities LLC, which provides phone service to one million prisoners in 2,300 lockups, and profits off high rates as well. In 2020, GTL paid $25 million to settle a class action suit by New Jersey offenders alleging that the company charged up to 100 times the actual cost of calls and collected excessive fees. GTL pays commissions to prisons that use their services, just like their competitors. The company was also under fire for keeping deposits from prepaid accounts if they became “inactive”—usually when a prisoner was released or transferred.

Renting vs. Buying

Alabama’s prison system illustrates another disturbing facet of the punishment economy. On February 1st of this year, Governor Kay Ivey announced an agreement with CoreCivic (formerly Corrections Corporation of America), one of the nation’s largest private prison companies, to lease two massive new state prisons for 30 years at a cost to taxpayers of $3 billion dollars. The new complexes that together hold 7,000 prisoners will be built and owned by CoreCivic but staffed and operated by the state’s corrections agency. The private companies that will outfit and service these prisons are surely eager to get busy profiting off their construction and operation.

Governor Ivey said that her plan was meant to address Alabama’s troubled prison system without raising taxes or incurring public debt by floating new bonds. But advocates like the ACLU point out the high cost—$100 million a year—to merely rent a facility while lining the pockets of private prison companies without solving the underlying problems of understaffing, mismanagement, violence, and overcrowding. They’ve called instead for sentencing reform to reduce the state’s prison population and obviate the need for more prison beds. In December of 2020, the U.S. Department of Justice in a rare move also took Alabama to court over its failure to protect prisoners from violence and the use of excessive force.

Alabama might want to consult with Colorado about their experience leasing prison facilities. When Colorado Governor Jared Polis expressed interest in 2019 in shutting down a GEO-owned prison, the firm responded by giving the state’s corrections department just 60 days to remove the 600 offenders housed there. As Colorado DOC Director Dean Williams said at the time, “That’s the deal you make with a private prison corporation. You know if it starts to go south, you don’t really have long-term leverage to keep a prison going that they operate.”

Expanding the Pie

GEO was likely looking to offer those 600 Colorado beds to the federal government for immigration detention use. When Donald Trump took office in 2017, GEO signed $750 million in contracts with the Department of Homeland Security’s Immigration and Customs Enforcement agency (ICE) to detain illegal immigrants. Though President Joe Biden has now said the Justice Department won’t continue using private prisons, there’s no prohibition on ICE continuing those lucrative contracts with GEO and CoreCivic. In 2019 both companies signed ICE contracts worth about $1.3 billion each. Seventy-five percent of immigration detainees reside in their facilities.

Though private prison companies got a slew of new ICE contracts under the Trump Administration, they’ve seen the writing on the wall for years and have diversified their business model. GEO, CoreCivic, and others have been busy expanding their offerings in the lucrative areas of post-release supervision, residential reentry centers, and federal immigration detention. They continue to promote the lie that they cage prisoners and track parolees more cheaply than governments can. They do so only by cutting corners on safety, food, and medical care, and by keeping prisons dangerously understaffed. Nevertheless, the GEO Group and CoreCivic had combined revenue of almost $4.5 billion in 2019.

In April, 2021, CoreCivic agreed to pay $56 million to settle a shareholder lawsuit filed five years earlier that accused the company of inflating its stock price by misrepresenting the value of its services. The company’s public statements made claims that they provide “quality correctional services at a lower cost” than government-run prisons.

The suit from its own stockholders said that these were knowingly false claims and that CoreCivic “ran unsafe, low-quality prisons that caused multiple deaths and did not save money.” During earlier efforts to dismiss the case, a judge had found CoreCivic executives knew of serious problems with some facilities and were concerned about the future of the business. When a federal audit came back without serious criticism, one company officer wrote: “What I’m shocked over is they totally overlooked the consequences of our staff vacancies.”

Meals, Wheels, and Medical Deals

For-profit medical providers also contribute to the needless suffering of prisoners across the country.

These companies routinely cut corners, are deliberately understaffed, and deny costly medications and treatment to offenders to maximize profits. It’s lucrative enough that Corizon Health was recently acquired from BlueMountain Capital by the Flacks Group, a Florida investment firm for an undisclosed price. Corizon has 5,000 employees and an annual revenue of $800 million dollars. But it’s in trouble—between 2018 and 2020 its contracts shrank from 534 facilities in 27 states to just 149 jails and prisons in 16 states. The contraction may be a result of numerous lawsuits and fines for substandard performance and short-staffing. In the last five years, Corizon has been sued for malpractice almost 700 times, suffering multi-million-dollar judgements when they lose cases. It was still an attractive enough profit proposition to attract investors.

Things got so bad in Mississippi for Centurion Health that the company pulled out of its $50 million annual contract with the state, citing understaffing and facilities deficiencies. The move came after attorneys for Team Roc, the social justice arm of hip hop star Jay-Z’s Roc Nation, sued over seven prisoner deaths in less than two months.

Inmate Services Corporation (ISC), a private transportation firm that moves prisoners around the country, is another beneficiary of the punishment economy. In one of many examples, ISC was sued for taking prisoner Danzel Stearns on a profitable, meandering nine-day drive in 2016. The 1,100-mile trip from Colorado to Mississippi should have taken 17 hours. Instead, the transport van crisscrossed through thirteen states, some twice, picking up as many as 17 other passengers at a time.

Two drivers took turns sleeping on a mat in the cab while cuffed and shackled prisoners like Stearns remained upright for days, without regular access to a bathroom, a change of clothes or a shower. Stearns’ story seems impossibly cruel, but it’s business as usual for transport companies like ISC, whose only concern is maximizing profits at the expense of prisoners’ very real needs. To make matters worse, Stearns was being moved to Mississippi for a minor drug charge.

The portrait of unchecked greed moves next to Texas, where two executives of prison food service provider West Texas Provisions were certainly winning—until they were sentenced to prison themselves last year for selling a million pounds of adulterated, uninspected meat to federal corrections officials. The Inspector General for federal prisons noted that the agency currently has no quality assurance plan to ensure that food served to prisoners meets industry or legal standards.

The sad fact is that there are no nutritional standards besides those set by corrections agencies themselves, leaving food service enterprises especially ripe for corruption and abuse at the expense of prisoners’ health and well-being. Last year, a sheriff in Virginia’s Tidewater region was sentenced to prison for the kickbacks he received from meal providers to the jail. And the paltry, often inedible rations served to prisoners—costing states an average of just $1.70 a day, or less than $.60 cents per meal—lay the foundation for yet another profitable enterprise of the punishment economy: jail and prison commissary providers.

The industry-leading Keefe Group is owned by HIG Capital, a Florida private equity group which manages $43 billion in assets. HIG owns TKC Holdings, a holding group that includes Trinity Services (prison food service), Keefe Group (commissary) and ICS (phone service). Through six subsidiaries, Keefe has contracts with thousands of jails and prisons, and is the most visible commissary provider to those behind bars.

Prisoners across the country pay Keefe, Bob Barker Co., Union Supply, and other profiteers like them millions every year to supplement meager institutional menus with ramen, chips, and other overpriced junk food, just to subsist. Healthy offerings are in short supply. Offenders also rely on these companies for hygiene necessities, feminine products, stationary, and other basic needs.

Prisoners and families often pay commissary profiteers two to three times the prices you’d find on store shelves for the very same items. A single packet of ramen—the building block of most prison meals and a basic unit of currency behind bars—can cost anywhere from $.30 to $1.00 behind bars. Another Keefe subsidiary called Access SecurePak offers monthly or quarterly “holiday packages” so families can order more unhealthy snacks to send their loved ones behind bars at especially inflated prices.

Billionaires and private prison companies are some of the most obvious and profitable beneficiaries of the punishment economy, but they’re certainly not alone. One of the defining features of this vast ecosystem is just how broad a reach its tentacles have. From health care to transportation to commissaries, from linens to food service to tasers and pepper spray, the commercial opportunities are endless. Go to an annual American Correctional Association conference and marvel at the variety of vendors hawking their wares and services to corrections administrators eager to sign contracts.

Other private equity firms you’ve likely never heard of own companies that provide prisoners and administrators with everything else a profiteer can dream up, from “private probation” and case management services, to parolee mentoring, to recidivism risk-management prediction tools, to ankle monitors and bail bonds. Innocuously-named firms like Endeavor Capital, Bison Capital, or Apax Partners own subsidiary companies that draw vast profits from the business of mass incarceration.

The business of punishment reaches across sector after sector to make itself an indispensable employer and critical part of the U.S. economy—and it goes well beyond publicly-traded companies that run private prisons. Millions of jobs in every state depend on its continued success, defined as a steady flow of new and returning prisoners to fuel it. The winners have the power and money to keep the conveyor belt moving.

The Losers

Jails and “correctional centers” don’t do much to correct antisocial behavior, or drug addiction, or mental health issues—yet addicts and the mentally ill are numerous behind bars. Roughly a quarter of those in jail and prison have drug offenses, and by some estimates three-fourths of them have addiction issues. About a quarter of those behind bars also have serious mental health problems.

Probation violators often make a return trip to prison for breaking technical rules—like a failed drug test—not committing new crimes. Instead of getting people the help they need, the system has become a perpetual motion machine, ever expanding to serve the profit motive of the economic winners who perpetuate it. About half of prisoners locked up don’t belong behind bars, and communities would be no less safe if they were released.

Even better would be a carceral model which gave people who did belong in prison real tools to prevent their return. But then profits would suffer, and the system has no interest in that kind of care and efficacy. Prisoners are essentially warehoused for years with little attention beyond lip service paid to real reentry needs and providing the skills and resources that would prevent their return. We will have made progress on prison reform when state corrections systems measure their success on the basis of how many people come back through the revolving door, and account for the results honestly instead of manipulating statistics to tout favorable results.

Besides the companies who profit off it and the politicians who perpetuate the problem, the system is designed to fail everyone in whose name it purports to operate: prisoners and their families, crime victims, taxpayers and communities, and corrections officers and prison staff.

Make no mistake, many lose well beyond prisoners themselves. Because recidivists create new crime victims by definition, contributing to broken communities. Some five million children growing up with a parent behind bars surely lose—becoming more likely to land there themselves. Taxpayers lose when billions are spent on incarceration, or even on servicing the debt on prison construction bonds, instead of on schools and health care. Even those employed by prisons lose, working in unsafe conditions in understaffed prisons for low pay, so states can save money or corporations like GEO and CoreCivic can pass on to shareholders monies unspent on proper staffing.

How Prisoners and Families Lose

In most of the small and large ways that profiteers win, it comes at the expense of prisoners themselves. Some might say the system was designed that way; some might even say it’s even appropriate. Prisoners broke the law, after all, and complaints about the terms and conditions of confinement are often met with indifference as a result.

Congregate carceral settings will never be clean and efficient modern marvels of caring humanitarian treatment—it’s just not in the cards. But that doesn’t mean society should turn a blind eye to the real abuses the system inflicts on prisoners in the name of people whose taxes fund it.

The most important way that mass incarceration fails prisoners is by all but guaranteeing that they’ll come back. Few leave prison with real marketable skills, a secure place to live, a job already in hand, health insurance, a driver’s license, a savings account—in short, the support that would help ensure their success. Of course, prison administrators show auditors thick binders that describe detailed re-entry programs that look great on paper.

But across the nation, two of three return within a few years, and eight of ten within five years. Well over half are still unemployed a year after their release. Those employed will face reduced incomes, and all will be met with legal discrimination in housing, employment, food assistance and other social safety net benefits. A record of failure on recidivism that is so miserable, enduring, and widespread at the state and federal levels ought to be enough to spur massive outrage and change. The fact that it hasn’t—despite a third of American adults being caught up in it—indicates just how powerful the prison-industrial complex is.

One of the primary reasons that returnees fail on the outside and come back to prison is an inability to find and maintain employment. A groundbreaking 2018 study showed that formerly incarcerated people are unemployed at a rate of over 27%—higher joblessness than during the Great Depression.

The challenge is especially serious in the two years after release from prison. It’s worse for women and minorities; worst of all for women of color. In the first two years post-release, jobless rates topped 30%. Four years later the rate was down to 14%, still almost three times the average for working-age adults. Black women formerly incarcerated are twice as likely as White male counterparts to be unable to find work.

There are policy choices available to address the problem: providing a temporary basic income post-release; expunging criminal records post-probation; bonding and tax incentive programs for hiring former felons; reform of licensing procedures that discriminate against felons. None are widely in use because preventing recidivism is not seen as a solution but a problem: it doesn’t profit anyone.

Even while incarcerated, prisoners aren’t paid a living wage—if they were, prisons couldn’t afford to function. Most offenders work for a dollar or two a day, doing jobs that range from maintenance to food service, to laundry to teaching GED classes. They literally keep prisons running for wages that average about $.25 cents an hour.

Many jails and prisons actually charge offenders room and board or other “pay-to-stay” fees, deducting monies from their meager paychecks or commissary accounts. At least 40 states currently charge daily fees to prisoners. A 2018 Alabama study found that 38% of those surveyed committed a second crime to pay off fines and fees. In Wisconsin, the average pay-to-stay cost was about $13 a day, according to another survey.

Prisoners are routinely informed that the slave labor they perform is a privilege, not a right—and those jobs can be revoked on a whim for the most minor infraction, real or manufactured. Most are so grateful to have even a few dollars in income they’ll put up with unsafe conditions or other indignities.

Prisoners also staff correctional “enterprise” warehouses in many states making license plates, furniture, textiles, and other products for profitable sale to state agencies. These jobs are often the most desirable ones in any prison, because they pay a dollar an hour or more. Sweatshops and slave labor still exist in America—they’re just unseen behind prison walls, and they’re perfectly legal under the 13th Amendment to the Constitution, which generally prohibits slavery but makes an explicit exception for prisoners.

State prison enterprises are just a new and “improved” version of the old convict leasing system. That original scheme still exists in some places, in fact. Prisoners go to work in private poultry processing plants and slaughterhouses, and on road crews and farms every day—unprotected by labor laws or occupational safety standards, and are paid pennies for their backbreaking, dangerous work.

A few states like Arkansas pay prisoners nothing at all to do jobs that range from maintaining the Governor’s mansion to working on “hoe squads” tending crops. During the height of the COVID-19 pandemic, hoe squad workers at Arkansas’ Cummins Unit facility were judged to be essential, required to keep crowding into trailers for transport to the fields. Those who refused were sent to the hole.

Other states like Virginia have kept their profitable enterprise warehouses open throughout the pandemic, deeming them essential even as other inmate work details were shut down. Kitchen and enterprise workers were screened with a forehead temperature check but regular testing wasn’t on offer until months later. They live in cellblocks and dormitories with the general prison population and have been a source of repeated COVID outbreaks throughout the pandemic.

Prisoners and their families are already some of the most economically disadvantaged groups in the country. Paying prisoners a fair wage for their work—enough so they could feed themselves and maintain their personal hygiene—shouldn’t be very controversial. The alternative is often reliance on families to send money, and many of those families have already lost a parent, wage earner, and income almost by definition. Most can ill-afford to be sending their hard-earned dollars to loved ones behind bars so that hedge fund billionaires can get richer off the profits. But they do it anyway.

The Prison Policy Initiative estimates that families spend $2.9 billion a year on commissary accounts and phone calls. Families also often pay court costs and fines; a 2015 study found that the average spent on court fees per participating family was about $13,000. As prisons and jails continue to outsource basic functions like medical and food to private companies, the costs to families keep going up.

In 2019, the Marshall Project surveyed 200 families of prisoners who documented their spending on these “hidden costs”—most spent hundreds per month paying for health care, hygiene and commissary items, phone calls, emails, and visits. One typical respondent tallied up over $6,000 in annual expenses that year—and that didn’t include extra calls and visits at Christmas time.

Prison profiteers know that families will spend money on their loved ones, and they take advantage of that caring. Prison administrators and state lawmakers who ought to be protecting offenders’ families from rapacious telecom, commissary, health care, and transport providers instead solicit “commissions” and campaign contributions.

Meanwhile, millions of children in this country grow up with a parent in prison. Families already stretched thin spend weekends on busses, sitting in visitation rooms, setting aside funds they can’t afford for phone and canteen accounts—while billionaires like Tom Gores sit in owners’ suites at NBA games or on yachts in Miami harbor. It’s beyond shameful—it’s criminal. The economic impact of some 2 million prisoners’ needs on the millions of family members that support them is a series of ripples whose impacts are felt in households across the country.

Crime Victims Lose

Prosecutors aver that they stand up in court to represent “the people.” Ostensibly by this they mean the victims of crimes as well as the general public. Criminal penalties are obviously meant as punishment—the state tells arrestees that they made bad decisions, so it limits their agency and makes decisions for them for a while. And crime victims are supposed to be made more whole, by the punishment of those who wronged them.

So when two-thirds or more of returned citizens—who got no help at all during their time behind bars—recidivate and land back in jail or prison, it’s a slap in the face to the people as a whole and to crime victims specifically. Many arrestees making return trips to prison just victimized someone else, after all. When the system we’ve created and allowed to flourish effectively says, through its action or inaction, that the revolving door is just fine, it’s also telling crime victims that it’s not too concerned about them.

Recidivism, in other words, isn’t just about offenders themselves coming back to prison. It’s a failure that deeply disrespects crime victims, the very people who are most directly affected by the commission of crime in the first place. Victims groups should be part of the lobbying for more effective re-entry and restorative justice programs, instead of longer sentences.

Taxpayers and Communities Lose

Public safety budgets in virtually every state compete with education and health care priorities for the lion’s share of public resources and tax dollars. So every dollar spent to send a probation violator back to prison or lock up an addict for his addiction has a direct impact on the health, welfare, and education of schoolchildren and citizens in American communities.

Taxpayers also spend millions in some localities to settle civil rights lawsuits against corrections agencies when they’re sued for abusive practices. If prisoners are assaulted or suffer mental health emergencies and commit suicide in solitary, it’s taxpayers who foot the bill. And even when states and counties insure themselves against payouts, citizens pay those premiums.

In the nation’s poorest neighborhoods, where demand for public resources is great, public safety often commands the most attention and budget share. Funds for adequate health care and schooling are always somehow in short supply, while communities of color are overpoliced and overrepresented in jails. Even in wealthier White areas where the property tax base is stronger, with better-funded schools and health care, inordinate funding is directed to policing and jailing citizens.

Minorities fill jails and prisons, making up almost two-thirds of offenders nationwide. Almost half are Black—and in some places like Virginia it’s more like 60%. Public tax dollars serve them up on a platter to private companies exploiting a captive audience. Those tax revenues could be allocated to far better purposes keeping people out of prison in the first place, and strengthening communities’ resilience.

Prison Employees Lose

Finally, those working in jails and prisons lose too. They’re underpaid, overworked, and often have little other choice for steady employment. Since state prisons are generally built in remote, undesirable, environmentally-unhealthy areas where land is cheap, and they’re often the only steady jobs around providing decent benefits. That said, the pay for starting prison guards is usually in the range of $25,000-$35,000, or about $12-15 per hour. Many are forced to work a second job to make ends meet.

At least for state employees, the benefits may make up for the low wages and dangerous conditions. Guards employed by private prison companies like GEO and CoreCivic don’t have that added incentive. Civilian staff of jails and prisons—teachers, counselors, kitchen supervisors, nurses, housing unit managers, and others—don’t fare much better; they’re paid less than their counterparts outside the walls and they work under challenging conditions.

The biggest way the system fails prison employees is by consistently coming up short on staffing. Many states are perennially 25% to 35% below recommended full staffing levels, and it puts everyone who does show up to work at higher risk of being unable to respond effectively when trouble occurs. For private prisons, understaffing is a deliberate strategy to increase profits. For state prisons, where pay and benefits are the biggest costs, the lack of qualified staff represents an underinvestment in officer salaries in a cash-strapped system.

Back to Math: Changing the Calculus

The economic and societal damage done to our country by arresting 11 million plus people a year and keeping two million-plus stuck behind bars is incalculable. It goes well beyond the $80 billion dollars we spend up front every year, and includes much longer-term harms: lost productivity, jobs forfeited, family wealth not accumulated, health problems left untreated, children not parented or schooled properly, lives not lived, streets and neighborhoods and communities left broken. The true cost of all this profitable caging will probably never be known. But it’s clear who’s winning and who’s losing.

There are countervailing currents to be sure. New York City recently made all jail phone calls free. Illinois has abolished cash bail entirely. The University of Florida declined to renew its contract with Florida’s corrections department for prison labor, after pressure from local advocacy groups.

California Governor Gavin Newsom signed the “Families Over Fees Act” in late 2020 rolling back the collection of fines, fees, and court costs from returning citizens, and cancelling $16 billion in outstanding debt. Those fees, which are mostly unpayable anyway, often cost officials more administratively to try and collect than they bring in to state coffers.

In 2019, eight banks that made up 87% of private prison financing—including industry leaders like JP Morgan Chase, Wells Fargo, and Bank of America—announced they would no longer underwrite the operations of the GEO Group, CoreCivic, and other misery industry leaders. By the beginning of this year, GEO and CoreCivic’s stock value had tumbled 53% and 63%, respectively, after years of solid growth. CoreCivic was demoted by S&P from the MidCap to the SmallCap index, and suspended dividend payments. Its credit rating has dropped below “junk bond” status.

Twenty-two states including California have now banned contracts with private prison operators to some degree. Three of the nation’s largest pension funds in New York and California have also acted to divest from private prison companies; investors like teachers’ unions in Chicago and New Mexico’s Education Retirement Board have dropped the stocks from their portfolios, and joined the fight too.

Universities are getting in on the divestment action as well. In 2015, Columbia University in New York became the first to divorce their finances from prison profiteers. The University of California system, Georgetown, and more than a dozen others have followed suit. And public universities may be one key to better models for services like prisoner medical care. States like Virginia have contracted with non-profit public universities and teaching hospitals for treatment of serious medical issues.

The coronavirus pandemic, for all the negative impacts it’s had on prisoners, has also resulted in the reduction of the population behind bars. In some jurisdictions like Washington, D.C., police are issuing citations more often rather than making arrests. And technical probation violations are resulting in fewer trips to jails as cities especially try to reduce overcrowding in jails.

State Departments of Corrections are reducing their offender numbers as budget pressures, state-level reforms, and alternative sentencing like drug courts gain widespread acceptance. Virginia just legalized the possession of recreational marijuana and has discussed expunging simple possession convictions from arrestees’ criminal records—which Black people were four times as likely as Whites to be jailed for.

Missouri lowered its prison population from 33,000 in 2017 to just 26,000 in 2020—a 21 percent drop in three years. Much of the reduction was attributed simply to replacing prison time with probation for a number of offenses in the state’s criminal code. The state’s plan also obviated the need to fill 131 long-vacant staff positions, resulting in millions in cost savings of salaries and pensions.

Former prisoners are also running for local office more often, in states like Georgia, Tennessee, Michigan, and Washington, and some have won. They’re still woefully underrepresented, but their criminal history makes them well-equipped to push for change because they understand the system better.

Coming back to math, there’s a different sort of calculus in play lately. With 77 million Americans now having direct experience of mass incarceration, calls for change are growing. Justice reform is certainly difficult when so many American jobs rely on full prisons and continued profiteering by private companies. But like an equation that ultimately requires balance, we may see communities take back some of the power that punishment puppeteers have held for far too long.

People get a vote, and they exercise it not only through the representatives they elect but with their wallets too. And just as profits have driven the punishment economy forward, the bottom line of financial pressure on state budgets and calls for divestment may ultimately tilt the balance back toward the people the system is meant to serve. Balance would entail prisoners being treated more like people—like someone’s brother, father, mother, son, or daughter that they are—instead of as profitable pawns in a punishment economy that sees only the lucrative bounty on their heads. 


Daniel Rosen is a writer and criminal justice reform advocate currently serving a five-year sentence at the Greensville Correctional Center in Virginia. He lives in Washington, D.C., where he’ll reside upon his release from prison in October, 2021. Prior to prison he spent fifteen years in public service with the Departments of State and Defense. He holds a M.A. from Tufts University and B.A. from UCLA. This article is also available at his website—“Three Hots One Cot: Dispatches From a Prison Cell”—and based on an earlier version published there (see


Sources: Associated Press, American Prospect,, NBC News,,,,,,,,,,,,, Texas Standard News,, New Yorker,,,, Forbes,,,

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