In the United States, prisons can be either public or private. Public prisons are primarily funded with tax revenues and are completely owned and operated by government agencies, while private prisons are owned and operated by for-profit companies. In a typical scenario, state or federal governments seek to outsource the operation and maintenance of one or more prisons, enticing the involvement of for-profit companies. Private enterprises can purchase these prisons from the government and become responsible for their staffing and upkeep needs. The state or federal government provides funding to cover the costs of keeping the inmates incarcerated, and the private ownership entity treats this funding like revenue and endeavors to run the prison at a profit.
The for-profit prison model emerged in the 1980s as a response to the overcrowding problems created by mass incarceration, which many analysts trace back to the federal government's War on Drugs. The use of private prisons remains highly controversial as the profit-seeking model relies on private enterprises with vested interest in keeping people incarcerated on an ongoing basis. This forms the basis of what is informally known as the prison-industrial complex, which refers to the collective of corporations and organizations that lobby for policies that will maintain large prison populations in the interest of protecting the viability of the private prison business model.
Additional controversies arise from ethical considerations surrounding prisoners' rights and the government's responsibility to ensure those rights are protected. Experts have argued that for-profit prisons are a form of governmental neglect, arguing that working with private prisons means abdicating the government's inherent duty to hold wrongdoers accountable and enforce humane standards. Such objections have been voiced by policy analysts since the early years of the for-profit prison model. These concerns are especially poignant with regard to protecting the rights of juvenile offenders, who are below the age of majority and are thus, from a legal standpoint, dependents of the state.
As of 2016, for-profit prisons held approximately 128,000 inmates, representing about 8.5 percent of the total US prison population. Analysis shows that the nationwide number of inmates in private correctional facilities rose 47 percent between 2000 and 2016, while the total prison population increased by just 9 percent during the same period. New Mexico led all US states in 2016 with 43.1 percent of its prison inmates serving their sentences in for-profit facilities, followed by Montana at 38.8 percent. That year, 18.1 percent of federal inmates were housed in private prisons.
Under President Barack Obama (1961–), the US moved toward phasing out the for-profit prison system, but the presidential administration of Donald Trump (1946–) began rolling back the Obama-era policies in 2017. The private prison issue arose during the early rounds of the Democratic primaries leading into the 2020 presidential election, with candidates Tulsi Gabbard (1981–), Bernie Sanders (1941–), and Elizabeth Warren (1949–) being particularly vocal about their opposition to the for-profit correctional system. Former US Vice President Joe Biden (1942–), considered a frontrunner among the Democratic primary candidates, has faced criticism for his support of "tough on crime" policies in the 1990s that contributed to mass incarceration. Though he has defended his congressional voting record, his 2020 campaign platform includes a pledge to abolish the private prison system. Legislative attempts to reform the for-profit system in the twenty-first century include Sanders's Justice Is Not For Sale Act, which died in Congress in 2015 and 2017, and the Ending Tax Breaks for Private Prisons Act, which was introduced by Democratic Senator Ron Wyden (1949–) in June 2019 and remains under consideration as of September 2019.
The Economics of Privatization
Arguments in favor of for-profit prisons reason that they provide public economic benefits by saving taxpayer money. Proponents of this argument note that private companies can act more quickly to implement efficiency measures and have more leverage when negotiating supplier agreements. Government operators, on the other hand, are encumbered by bureaucratic delays and constrained in responding quickly to inefficiencies. Others emphasize that for-profit prisons generate new tax revenues, create new jobs, and spur increased private-sector spending in the localities in which they operate. A final economic argument posits that free-market competition with no governmental involvement would naturally lead to better prison standards and lower operating costs.
The realities of the private prison industry, however, have led some observers to characterize it as a taxpayer-subsidized profit scheme that does little to reduce strain on public funds. A 2018 news report noted that most of the contracts between private prison operators and public agencies require governments to pay prisoner costs for specified capacities regardless of the facility's actual capacity. For example, the state of Arizona was contractually obligated to pay a private prison operator $3 million in 2011 after failing to meet a capacity quota of 97 percent. Numerous major US financial institutions, including Bank of America, JP Morgan Chase, and Wells Fargo, also help finance private prison companies, making their customers unwitting participants in the for-profit prison industry.
The work programs used in for-profit prisons have also drawn scrutiny. Opponents have likened them to a modern form of slavery, in which inmates are made to labor for the benefit of private enterprises, in partnership with the state, for little-to-no pay. Supporters have pointed out, however, that work programs can benefit inmates who participate. A 2016 National Institute of Justice study found that prisoners who took part in work programs at privatized prison facilities had an easier time finding employment after their release, held their new jobs for longer periods, and were statistically less likely to reoffend.
Privatization's Effects on Prison Services
In theory, profit motive holds the potential to improve prison function in various ways. Private enterprises claim to operate at reduced costs while addressing overcrowding issues. They also contend that their operational practices are more efficient and have led to the development of superior inmate management methods and security practices. Industry stakeholders also maintain that for-profit prisons are more effective at reducing recidivism, or the rate of re-offense following release, than their publicly operated counterparts, and that they are responsible for discovering innovative rehabilitation strategies.
Critics are quick to point out that even if these contentions are accurate, for-profit prisons also pose significant downsides and drawbacks related to prisoners' rights and ethical treatment. A 2018 New York Times investigative report noted a trend of understaffing, undertraining, and low employee pay rates, all of which are motivated by increasing profit margins at the expense of worker, inmate, and public safety. In 2010, for example, three inmates who escaped a private Arizona prison when staff ignored a security alarm were able to kill an elderly couple before being located and apprehended. According to a 2016 US Department of Justice report, private prisons had twice as many inmate-on-staff assaults and a rate of inmate-on-inmate assault that was 28 percent higher than that of federal facilities in 2014.
In for-profit prisons that use health care copay models, inmates are sometimes slapped with hefty fees to help cover necessary medical treatments. Given the very low wages most inmates are paid through prison work programs, a single charge can easily total a month's earnings or more. Related ethical questions are further compounded by the fact that a 1976 Supreme Court ruling found that all inmates are entitled to receive adequate medical care while imprisoned. For-profit prisons have also been criticized for charging exorbitantly high rates for basic services like phone calls and commissary items such as personal care products. In many cases, inmates end up housed in private facilities geographically far from home and unable to afford basic communication services like phone calls and video conferences.
Privatization and Immigration Detention
Due to policies pursued by the Trump administration, the conditions in federal immigration detention facilities became a charged political issue in 2018 and 2019. Commentators have noted that immigration policy also played a role in the mass incarceration crisis that led to the for-profit prison system, as immigrant-dense lower-income neighborhoods have historically been disproportionately targeted by federal "tough on crime" strategies. Analysts also point out that private companies profit from the detention of undocumented immigrants in numerous ways. For instance, two of the nation's largest private prison companies, CoreCivic and GeoGroup (GEO), have earned billions of dollars in revenues since the 1980s. CoreCivic was the first private company to become involved in the design, construction, and operation of US immigrant detention facilities, while GeoGroup owns and operates immigration detention centers in the United States and internationally. As of September 2019, both companies are involved in ongoing lawsuits alleging human rights violations.
At the same time, both CoreCivic and GeoGroup had active contracts with US Immigration and Customs Enforcement (ICE) to create and administer immigration detention centers across the country. GeoGroup inked a ten-year, $110 million contract with ICE in 2017 to operate a thousand-bed immigration detention facility in Texas. The company is also involved with the electronic tracking of detainees released from federal custody, with analysts noting that the firm is heavily engaged in the systemic aspects of the immigrant detention process. In 2014 CoreCivic was the beneficiary of a four-year, $1 billion contract to operate an immigration detention center in Dilley, Texas. The government later renegotiated the terms of the contract for a reduced rate. By 2018 further reporting and media analysis had revealed a network of private companies in many other industries, including technology and transportation, that are earning significant financial rewards through aiding enforcement of the Trump administration's controversial federal immigration policies.