The Rise of the Private Prison Industry

By Michael Brickner, Shakyra Diaz
The rise of private prisons cannot be discussed without first recognizing that it was fueled by the explosion of “tough on crime” policies such as the failed War on Drugs that have left the United States with the largest prison population in the world. Policies such as mandatory minimum sentencing, three strikes laws, and a de-emphasis on diversion, probation, and parole meant that more people were incarcerated for crimes that would have led to rehabilitation or community control only a few years earlier.
As the number of Americans incarcerated for low-level, nonviolent offenses has increased, so has the number of private prisons. In 1990, only a few years after private prisons first began to proliferate, 7,000 prisoners were housed in private facilities nationwide. In June 2010, the number rose to 126,000 prisoners, or 9 percent of the nation’s total state and federal prison population. In recent years, tremendous growth in private prisons has occurred on the federal level, particularly in the area of immigration detention. However, 2011 marked a renewed push toward expanding private prisons on the state level.
As the number of private prisons has grown, it has also led to banner profits for the companies. The largest private prison company, Corrections Corporation of America (CCA), reported revenues of $1.675 billion in 2010 alone.
This is no coincidence. Across the country, states have struggled to maintain prison systems that are over capacity and over budget because of the large influx of inmates. In light of the May 2011 U.S. Supreme Court decision in Brown v. Plata ordering California to alleviate its overcrowded prisons, more states began to seek solutions to reduce costs and prison populations. Brown v. Plata, 131 S. Ct. 1910, 179 L. Ed. 2d 969 (2011). Private prison operators are often touted as savings magnets—playing into the conservative belief that private industry can operate more efficiently and eliminate wasteful bureaucracy that often characterizes government.
Numerous studies have called into question whether private prison companies actually produce any cost savings, and some raise the possibility that they may cost states more in the long term. In 2011, the Arizona Department of Corrections released its report on per capita operations costs for the 2010 fiscal year and found that private prisons offered no demonstrable cost savings—and in some cases cost more than state-operated prisons. Another 2011 report issued by Policy Matters Ohio, a nonprofit research organization, also found Ohio private prisons’ touted savings were nearly nonexistent and private prisons could be more costly than state prisons.
The growing crisis in U.S. prison overcrowding has contributed to private prisons’ resurgence in recent years. While the prisons were en vogue in the mid- to late-1990s, several scandals set back the privatization movement. Most notable was CCA’s Northeast Ohio Correctional Facility in Youngstown, Ohio, in 1999. Within its first fourteen months of operation, there were thirteen stabbings, two murders, and six escapes—eventually requiring the city of Youngstown to file a lawsuit to require CCA to uphold minimum security standards. The facility closed because it was no longer profitable, but it serves as a warning for other states that wish to pursue prison privatization.

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