The US is home to just 4% of the world’s population—yet houses over 20% of its prisoners. With over 1.9 million people behind bars as of 2023, the US leads the world in mass imprisonment and deals with overcrowding of public facilities at high costs. As such, the privatization of prisons has been the “quick-fix” solution for the government. But does outsourcing incarceration truly save taxpayer money, or rather foster a profit-driven system that values revenue over rehabilitation?

The “prison” industry is projected to be worth $10 billion by 2027. In fact, the CoreCivic and GEO Group collectively manage over 53% of the U.S.’s private prison contracts, claiming their facilities allow for lower costs by up to 20% than state-run prisons. On paper, privatization seems like a win-win: fewer taxpayer dollars spent, new jobs created in local communities, and a supposedly more efficient system.

Here’s the catch—private prisons do not profit from reducing crime. Their business model depends on keeping incarceration rates high. Assuming producers are profit-maximizing, private prisons may have incentives to lobby for stricter sentencing laws or reduce rehabilitation efforts for a steady prison population.

Additionally, cost-cutting via economies of scale comes at a price. By operating in an oligopolistic market, private prisons face little competition to improve facilities. Studies by the Sentencing Project reveal private prisons have cut costs by providing lower-quality food, healthcare, and living conditions for inmates, which has led to a 15% increase in recidivism rates. In other words, inmates are more likely to reoffend, fueling a cycle of imprisonment that devastates communities.

The potential long-term spillover effects on the justice system, from exacerbated inequality to diminished public accountability, raise serious concerns without regulation. If privatization reduces costs and increases specialization only at the expense of justice, the industry will no longer benefit society at large.

References:

Gotsch, Kara, and Vinay Basti. “Capitalizing on Mass Incarceration: U.S. Growth in Private Prisons.” The Sentencing Project, 2 Aug. 2018, www.sentencingproject.org/reports/capitalizing-on-mass-incarceration-u-s-growth-in-private-prisons/. Accessed 8 Feb. 2025.

National Council on Crime and Delinquency. “Emerging Issues on Privatized Prisons.” U.S. Department of Justice Office of Justice Programs, www.ojp.gov/pdffiles1/bja/181249.pdf. Accessed 8 Feb. 2025.

Payne, Sarah. “The Economic Impact of Prison Labor for Incarcerated Individuals and Taxpayers.” The Princeton Legal Journal, vol. 2, no. 1, spring 2023, legaljournal.princeton.edu/the-economic-impact-of-prison-labor-for-incarcerated-individuals-and-taxpayers/. Accessed 8 Feb. 2025.

Sawyer, Wendy, and Peter Wagner. “Mass Incarceration: The Whole Pie 2024.” Prison Policy Initiative, 14 Mar. 2024, www.prisonpolicy.org/reports/pie2024.html. Accessed 8 Feb. 2025.