The idea of private prisons was introduced in 1984, when then-President Ronald Reagan contracted with the new Corrections Corporation of America, or CCA, to house immigration detainees at private detention centers in Texas. The idea quickly spread to other states, and according to the Bureau of Justice Statistics, as of June 30, 2008, there were 126,249 inmates housed in private prisons, representing 7.8 percent of the total prison population.
Financial Impact on Communities
CCA claims that its private prisons can provide an economic boost to communities that are otherwise stagnating. It also claims to be profitable for businesses outside the prison industry, from financial corporations who underwrite the construction to medical facilities, transportation companies and caterers.
Financial Impact on States
One of the primary reasons behind the initial idea of private prisons was to help states save money. A December 2007 study led by James Blumstein of Vanderbilt Law School showed that states could enjoy substantial savings by using a mixture of public and private prisons. Statistics gathered by the American Federation of State, County and Municipal Employees, or AFSCME, suggest that insufficient data exist to support that conclusion.
Where Does the Money Go?
Certainly, private prisons do employ cost-cutting measures. In the August 2010 issue of "Fortune," writer D.M. Levine explains that private prisons have several ways of cutting costs, such as housing inmates in a neighboring state, hiring non-union prison guards, and offering both lower pay and fewer benefits. However, according to AFSCME, prison corporations spend large amounts on other expenses, such as lobbying.
A motivation to increase profits can result in other problems. Public records obtained by Prison Watch of Idaho show a link between fewer officers and more assaults in private prisons, as well as more escape attempts. John Roman of the Urban Institute has pointed out that because private prisons have no incentive to rehabilitate inmates, unlike public prisons, the rate of recidivism amongst inmates housed in private prisons is higher, ultimately resulting in greater costs to the criminal justice system.
- Bureau of Justice Statistics; State and Federal Prison Facility Characteristics; May 2011
- Social Science Research Network; Evidence from Private Prisons; James F. Blumstein, et al.; Vanderbilt Law School; December 2007
- American Federation of State, County and Municipal Employees: The Record -- Private Prisons Do Not Provide Measurable Cost Savings
- Prison Watch of Idaho; Idaho Private Prison Has Triple Assault Rate; April 2010
- Urban Institute; John Roman Discusses Private Prisons; August 2010
- Photo Credit Jupiterimages/Photos.com/Getty Images
- Corrections Corporation of America: Enhancing the Economy; 2008
- "In These Times"; Follow the Prison Money Trail; Silja J.A. Talvi; September 2006
- Private Corrections Working Group: The Truth About Correctional Privatization
- "Fortune"; What's Costlier Than a Government Run Prison?; D.M. Levine; August 2010
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