The Economic Impact of Incarceration

By Glynnis Gravador

The US has the highest incarceration rate in the world, with 1 in every 100 adults imprisoned. The economic burden of mass incarceration in the US alone accumulates up to over 1 trillion dollars, highlighting the significance of this issue. Incarceration rates have only been increasing, further contributing to financial loss and decreased productivity across the nation.

Many incarcerated people experience assault and harassment in jail, some even committing suicide. The cost of injuries and mortality rates alone amount up to 92.3 billion dollars. Prisoners do not make sustainable wages in prison, and once they’re released, many struggle financially due to discrimination and distrust in employers, leading to higher unemployment rates. The amount of money lost while incarcerated is up to 70.5 billion dollars, with an estimated 230 billion dollar reduction in lifetime earnings by incarcerated people. Additionally, limited job opportunities pressure them into accepting low-paying, unstable work with poor conditions, making them easy to exploit and threaten.

The money lost by these former prisoners also leads to reduced labor force participation and therefore lowers overall productivity in the country. Lower earnings also correlate to less consumer spending, which also stunts economic growth. The government also spends a lot of money on maintaining prisons, spending around 133,000 dollars on incarcerating a single person, factoring costs for maintenance, health care, rehabilitation programs, and more.  Incarcerated people also aren’t able to pay taxes, which causes state and federal revenues to suffer.

The budget for prisons has also been increasing since 2010, with more investments on health care and security. These investments that come from public funding result in an uneven distribution of money from the people that is put into mainly prison facilities instead of education, the workforce, or public health care.

Incarceration also holds a significant influence over families and communities, as many families end up going into debt covering costs of basic needs after the loss of a primary financial provider, visitation and communication costs, and court-related fees. Women tend to be the ones responsible for covering these costs, causing around 35% to get evicted and experience homelessness, and around 43% of women affected had to turn down education and work long hours at several jobs as a result. Incarcerated people also have triple the divorce rates compared to non-incarcerated individuals, which brings poverty and housing instability. The emotional distress brought by divorce also contributes to lower productivity, weakened social capital, and additional economic burden on families.

Children of incarcerated individuals are especially vulnerable in that they are more prone to mental illness, homelessness, increased criminality, and mortality. Parental incarceration has shown to increase infant mortality by 40%, resulting in 8.344 deaths out of every 1,000 live births. In addition, 10% of children of incarcerated parents are unable to finish high school or attend college as a result of their parents’ incarceration. Because of this, many of these children enter the workforce early to compensate for lost income, and due to their lack of education, they receive lower wages and reduced lifetime earnings compared to highschool and college graduates. This also contributes to higher rates of homelessness because of lower family income. Children of incarcerated individuals are also five times more likely to go to prison themselves, contributing to the creation of more annual offenders and crime.

Incarceration also leads to decreased property values, deteriorating relationships between communities and police, and lower investment. Communities with increased crime rates or formerly incarcerated people, police and security systems become a lot more skeptical and distrusting towards the community, instilling fear and discouraging many people from participating in public life and connecting with their community. Businesses and government programs also invest less money in areas with high incarceration rates, which causes many citizens to suffer from fewer loans and job opportunities, as well as underfunded schools and facilities which lower the overall standard of living and quality of life.

Therefore, mass incarceration in the US not only affects individual prisoners, but instead has a ripple effect that ultimately impacts the entire nation. Former prisoners that suffer from low wages and poverty affect their families and children, who also have heavy financial burdens that the criminal justice system is partially responsible for. Incarceration also creates a cycle of trauma and poverty within families that can go on for several generations, increasing crime rates within communities. These communities in turn suffer from lower investment and increased homelessness, which reinforces damaging stereotypes that ruin their reputations. Communities with lower productivity and standards of living therefore lead to an overall decline in efficiency and economic growth. No one benefits in the end from this system, and it instead traps people in a cycle of crime, suffering, and poverty.