How Private Companies Are Profiting from Mass Incarceration

October 23, 2019

Stack of money with gavel

Mass incarceration isn’t only unjust—it’s big business.

We know it’s no accident that our prisons and jails have been filled to bursting over the past 40 years. America imprisons more people than any other nation on earth—a staggering 25% of all the world’s incarcerated people are behind bars in the US. This lock-’em-up culture has its roots in slavery and the racist “tough-on-crime” laws that started being passed back in the 1970s. But here we are almost 50 years later, with studies showing that mass incarceration doesn’t make us safer, with political leaders on both sides of the aisle agreeing that the criminal justice system needs to be transformed, and yet mass incarceration is still with us. What’s the reason for that? 

We think there are billions and billions of them...


Follow the Money

Let’s be extra clear: Mass incarceration doesn’t work. We don’t need it. In fact, between 2005 and 2016, 35 states cut crime and their incarceration rate simultaneously—so much for the argument that throwing people in jail and prison is the only way to keep our communities safe.

The Prison Policy Initiative has studied mass incarceration from every angle for almost 20 years. They issued a report in 2017 concluding that our country spends about $182 billion on locking people up. That’s a lot of money to spend on something that doesn’t work.

But maybe it’s all just a matter of how you look at it. Because while the system causes great suffering for incarcerated people, their families, and their communities, there are others who think it’s working just fine. Private businesses that provide services (like food and healthcare, for example) to prisons and jails are making billions of dollars from mass incarceration—which sounds to us like a very strong incentive for them to make sure that millions of Americans keep getting locked up. It’s no surprise, then, that these businesses spend so much on lobbying lawmakers to support policies that will keep prison populations high.

An overwhelming majority of Americans of all political affiliations and backgrounds believe that we need to reform the criminal justice system. Politicians are coming around to the same idea. A wave of newly elected prosecutors and even many police chiefs also support reform. But the bottom line is that locking lots of people up is making lots of money for lots of businesses, so change will not be easy.


There’s a Price on Everything

Let’s take a look at a few of the industries that are benefiting from other people’s misery.

  • Bail bonds

As America’s prison population has grown, so has the bail-bond industry—it now pulls in about $3 billion in profits every year. Most of the increase in incarceration has occurred in pre-trial detention—locking up legally innocent people as they await trial. And most of those people are in jail only because they can’t afford bail. Low-income defendants and their families often turn to a bail bondsman, who can pay the full bail amount once they receive a nonrefundable fee. The bail bond industry collects about $1.4 billion in nonrefundable fees every year, driving many families deeper into poverty. The industry, of course, works hard to thwart reforms.

  • Telecommunications

Monopolies have long been considered a big no-no in business. But when it comes to prison phone companies, monopolies are standard operating procedure. While telecom companies love this arrangement, which has helped push the value of the entire industry to around $1.2 billion, it runs up costs on incarcerated people and their families. Charging more than $1 a minute is common, with some states seeing prices approach $25 for only a 15-minute call. At these sky-high prices, low-income families often have to decide between talking to their loved ones and paying their bills.

  • Food and commissary suppliers

Supplying items like food, beverages, and hygiene products to prison or jail commissaries is a lucrative business, bringing in at least $1.6 billion across the country every year. There’s no such thing as shopping around for the best price when you’re incarcerated, so inmates have no choice but to buy what’s in stock at whatever price is listed (which could be much much higher than what you’d pay in stores). Prisoners earn so little behind bars that families often have to send money to make up the difference. As for prison food, companies like Aramark make millions of dollars in profits supplying meals to about 600 prisons. The money keeps coming in even when they do a terrible job.

  • Healthcare

The jail and prison healthcare system is a giant mess. Well, that’s true if you look at how effectively it tends to the health of people behind bars. From the perspective of profiteering, however, things seem to be going pretty well. Companies like Corizon, which is raking in $1.4 billion every year, are profiting from sick prisoners, despite having a dismal track record when it comes to making sure they get well again.


People Before Profits

We have a criminal justice system that’s criminally low on justice. And then we have multiple industries that have risen around it to take advantage of that system and turn profits on the backs of those caught up in it. The drive for exploiting inmates knows no limits. These days, you don’t even have to be locked up to be taken advantage of. Defendants are being charged for the use of electronic monitoring devices. Believe it or not, 49 states charge former inmates for the costs of their own incarceration.

We need to transform the system and we need to do it now. It’s time to put people ahead of profits. Join the movement for criminal justice reform today.