The Real Costs of the Private Prison Industry

Private, or for-profit, prison companies house approximately 7 percent of the total state prison population and 19 percent of the federal prison population. The private prison industry is worth an estimated $70 billion and the number of inmates incarcerated in private facilities grew by more than 1,600 percent between 1990 and 2009. All said, there are around 130 private prisons in the U.S. and private prison companies house nearly half of the country’s immigrant detainees.

Advocates of prison privatization touted the movement as a way of cutting costs and reducing prison overcrowding all while providing comparable, if not, improved services. In reality, those promises have not materialized. Private prison companies continue to receive criticism for providing low-quality services, compromising safety in prisons, negatively impacting criminal justice policy, and failing to save taxpayers money.

History of Prison Privatization in the United States

The first for-profit prison in the United States was created in 1852, but the modern push for prison privatization began in the 1970s and 80s. Privatization emerged during this time period as a response to the rapidly expanding prison population in the United States as a result of The War on Drugs and other criminal justice policies. The for-profit prison industry extended their reach even further in the 1980s when they contracted with the Immigration and Naturalization Service (INS) to detain undocumented immigrants.

Prison privatization accelerated under President Clinton in the 1990s after cuts in the federal workforce led the Justice Department to contract with private prison companies. The two largest for-profit prison companies., Corrections Corporations of America (CCA) and Geo Group, Inc. (formerly Wackenhut Corrections Corporation) were established in the 1980s and controlled 75 percent of the private prison market by the mid-1990s. Today, the two manage more than half of the private prison contracts in the U.S. and are both publicly traded companies.

Growing Concerns About Private Prison Companies

While most people think prison privatization is limited to the actual housing of inmates, the overall industry encompasses every service from the point someone is suspected of a crime until the meeting with a parole officer following release from custody. Aside from housing prisoners, private prison companies make profits by performing services such as the transportation of inmates, operating prison bank accounts, inmate food service, prison communication, and health care management.

In order for private prison companies to meet their bids, they cut operational costs below what the state would otherwise spend. Because the most expensive aspects of incarceration tend to be personnel and programs, cost-cutting often leads to a drop in the quality of prison conditions along with under-staffing, reductions in wages, and inadequate employee training.

There are countless examples of the consequences of cost-cutting by private prison companies. An Idaho Correctional Facility run by CCA was found to be understaffed by 26,000 hours in 2012 and officers were provided with empty cans of pepper spray and instructed to pretend they were properly equipped.

OSHA has also cited Geo Group, Inc. for failing to properly maintain prisons, which led to prisoners and guards being exposed to mold. Another Geo Group-run facility in Mississippi had defective cell doors in which the locks could only be opened by prisoners instead of guards.

Michigan Vows to Closely Monitor Contracts with Private Prison Companies

In 2013, Michigan awarded a $145 million contract with Aramark to provide food preparation services. The company began by cutting personnel salaries by 50 percent and had to ban 74 employees for misconduct compared to only 5 employees being banned during the previous five years.

Under Aramark’s management, kitchens in Michigan prisons became infested and was cited for 2,945 food quality and sanitation violations during a 7-months period in 2014. Michigan ended the contract in 2015 over a disagreement on billing and switched to Trinity Services Group out of Florida.

In response to a recent controversy over Michigan’s three-year contract with Aramark Correctional Services, the Michigan Department of Corrections announced that it is setting up a 30-person unit to monitor the department’s 184 private contracts to supply a number of services including food preparation, medical treatment, and various health services. The unit is said to be the first of its kind in the nation and will also be taking over the department’s auditing process to ensure state compliance with the requirements of the Prison Rape Elimination Act.

Critics argue that switching to a new contractor or close monitoring will not resolve the kinds of problems that arose with Aramark. Those critics believe that such issues are driven by prison companies’ incentive to cut corners in order to maximize profits, which ignore the security aspect of supervising inmate kitchens.

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