The United States has the highest incarceration rate in the world, with over 2 million people currently behind bars in state and federal prisons as well as local jails. This mass incarceration comes at an immense cost, not just to those imprisoned and their families but to taxpayers as well. Many privately-run prisons contract with state governments to house inmates in exchange for a fee per prisoner per day. This has led some to criticize the prison system for incentivizing companies to lobby for harsher sentencing to keep prisons full. In this comprehensive article, we will analyze the economics of the prison industry and specifically look at how much profit prisons make per inmate.
How Much Do Private Prisons Make Per Inmate?
The private prison industry in the US is worth over $5 billion annually. The two largest private prison operators are CoreCivic and The GEO Group, which combined account for around 80% of private prison beds in America. On average, it costs between $60-$70 per inmate per day for a private prison to house, feed, and secure people. Many state contracts with these companies are structured so there is a guaranteed minimum occupancy rate at prisons, ensuring revenue regardless of actual crime rates. This had led activists and policymakers to argue the system incentivizes mass incarceration.
Example State Contracts
- Arizona: Guarantees a 100% occupancy rate for one CoreCivic facility, paying $65 per inmate per day. This equals $23,725 per inmate per year.
- California: Pays private prisons an average of $62 per inmate per day, leading to $22,630 annual revenue per prisoner.
- Florida: Signed a contract with The GEO Group mandating a 96% occupancy minimum, with $57 per inmate daily fees.
Based on data from state budgets and corrections departments, the average revenue per inmate per year for a private prison is around $22,000. With approximately 128,000 inmates currently housed in private facilities, this equals over $2.8 billion in annual revenue.
Do State-Run Public Prisons Profit?
While private prisons generate clear revenue per inmate, the picture is more complex for government-run public prisons. Rather than earning profit, these facilities rely on taxpayer dollars through state budgets and funding. However, public prisons do employ state workers and support associated industries, circulating government money through the economy. There are also allegations that public prisons sometimes charge inmates and families excessive fees for basic services, generating unofficial profit.
Key Figures on Public Prison Economics:
- Approximately 1.29 million inmates are housed in state prisons, with an average annual cost per inmate of $33,274.
- For federal prisons, the average annual cost per inmate is $36,299 for over 200,000 prisoners.
- Total costs just for state prison budgets were over $43 billion last year.
- Phone call fees for inmates can far exceed normal rates, generating estimated hundreds of millions in state revenue.
While public prisons do not directly earn profits like private companies, the expanding incarceration system still acts as an industry, creating government jobs and funneling taxpayer money to contractors. However, exact revenue numbers per inmate are difficult to calculate compared to private facilities.
Effects of Long Sentences on Prison Economics
Critics argue that in both private and public prison systems, longer sentences translate into more money for the prison industry. Here are some key figures:
- Over 161,000 inmates are currently serving life sentences, with an average sentence length of 29 years.
- Around 44% have served over 15 years, and 1 in 9 lifers has been incarcerated for over 30 years.
- The average annual cost for just one inmate serving a life sentence is $31,977.
- For a 29 year average sentence, that equates to around $927,373 per inmate in lifetime imprisonment costs.
- Over 41,000 inmates are serving life without parole sentences with zero chance of release before death.
While there are certainly valid public safety reasons for incarcerating violent criminals, the sheer economic costs of decades-long sentences are massive. Especially for elderly inmates with chronic health issues, prisons with large long-term populations see skyrocketing medical care expenses.
Table: Notable Criminals and Their Sentences
Here is an overview of some high-profile inmates and their sentences which highlight how long sentences drive up lifetime costs per prisoner:
| Inmate | Crime Committed | Year Convicted | Prison Sentence | Projected Costs | Conviction Quote |
|---|---|---|---|---|---|
| El Chapo (Joaquín Guzmán) | Leading the Sinaloa drug cartel | 2019 | Life + 30 years without parole | Over $1 million | “There are no excuses here. There is no other opportunity than being incarcerated.” |
| Dylann Roof | Murdering 9 African Americans in a church shooting | 2017 | Death sentence | Over $600,000 appeal costs | “I didn’t have to do anything… But what I meant when I said I do not regret what I did is I do not regret the fact that I had to do it.” |
| Larry Nassar | Sexually abusing over 150 girls and women | 2017 | 60 years | Over $2 million | “I’ve just signed your death warrant.” – Judge Rosemarie Aquilina |
| Bernie Madoff | Leading $65 billion Ponzi scheme | 2009 | 150 years | $4.5 million | “I am responsible for a great deal of suffering and pain. I understand that. I live with this every day.” |
These individual inmate costs add up quickly systemwide. With more people serving decades-long sentences, prisons must spend more per person on housing, healthcare, and supervision for an aging inmate population.
How much do private prisons make per day per inmate?
On average, private prisons charge state corrections departments around $60-$70 per inmate per day to house, feed, and secure prisoners. With guaranteed minimum occupancy rates, this ensures steady revenue.
Do prison wardens earn profits from inmates?
At government-run public prisons, wardens and other employees receive state salaries and do not directly earn profits from inmates. However, in the private prison industry, executive compensation is often tied to occupancy rates and cutting costs, incentivizing full facilities.
Do states with the death penalty spend less on prisons?
There is little evidence that having the death penalty reduces overall incarceration costs for a state. Lengthy appeals processes for death row inmates often incur significant legal expenses, while execution methods are also costly. Just 4% of inmates nationwide are sentenced to death.
How much do inmate phone calls and commissary purchases generate?
Collect phone calls from prison can cost up to $25 for a 15 minute call, generating hundreds of millions in revenue from inmates and families. Commissions from marked-up commissary purchases also provide prisons with extra unofficial income per prisoner.
How does healthcare factor into the cost per inmate?
Inmate healthcare costs are a major factor, with average annual medical expenses per inmate ranging from $5,000-$10,000 depending on age and health conditions. Aging inmates require assisted living and hospice care which adds considerably to per prisoner costs.
Conclusion
While calculating precise per inmate revenues and costs is complicated, the current evidence clearly shows that mass incarceration has become a significant funding stream and jobs provider that perpetuates itself. With over 2 million people behind bars and average annual expenses per prisoner as high as $36,000, corrections budgets now exceed billions annually and represent an entrenched industry. Reducing prison populations through policy reforms could curb these soaring costs and limit incentives to simply warehouse human beings. There are also ethical issues around private companies directly profiting off incarceration or public facilities unofficially generating revenue streams through inmates. Ultimately, more spending on rehabilitation, mental health resources, addiction treatment, job training, education and preventing recidivism could improve public safety while also fixing inhumane prison conditions and containing the staggering expenditures required to incarcerate millions.