20 Privatization of Prisons Pros and Cons

In the United States, for-profit companies are responsible for 18% of the total federal prisoner population and about 7% of state prisoners. Information from Immigration and Customs Enforcement also reports that 3 out of 4 people who are federal immigration detainees are managed by for-profit companies. These figures may not include private prison populations in Louisiana, Texas, and other states that do not have reporting guidelines in place.

The key benefit of privatizing prisons is that it allows for market forces to govern the expenses that taxpayers must pay to maintain populations. Private companies can often negotiate lower rates for necessary items and save money in many other ways. To unlock this benefit, the for-profit prison must be responsibly managed, with appropriate staffing levels at all times.

The primary disadvantage of prison privatization is that people become commodities. Prisons don’t make money unless they have a prison population to maintain. That means prisoners in for-profit prisons tend to serve longer sentences and have less access to options like probation or early release. A study performed by the University of Wisconsin suggests that prison sentences in a for-profit facility are 7% longer than in public prisons.

Here are some additional pros and cons to look at when considering the privatization of prisons.

List of Additional Pros of Private Prisons

1. For-profit prisons create economic opportunities.
The privatization of prisons creates job opportunities on numerous levels for a community. There are the direct jobs that are available in the prison. Service industry jobs are required to support that population. Transportation professionals must bring in consumable goods. In total, the private prison economy in the United States equates to an economic impact of about $80 billion each year.

2. It can reduce prison population levels.
In federal and state prisons that are publicly operated, the number of prisoners being housed is quickly outnumbering the beds and population levels the facility was designed to hold. Many prisons are above 100% capacity. In California, some prisons operate at 130% capacity levels. When this is combined with low staffing numbers, it can be difficult to control the environment. By opening for-profit prisons, per-facility population levels can be lowered so prisoners can experience a better quality of life.

3. Prisoners from for-profit prisons may reoffend at lower rates.
In some regions, the rate of inmates reoffending and being sent back to prison can be over 80%. As an industry, a rate of 50% is considered to be excellent. Private prisons, on the other hand, may have re-offense rates that are as low as 20%. Although prisoners in for-profit prisons may serve longer sentences, they may spend less overall time behind bars because they have access to more resources inside and outside of prison.

4. Private prisons can be used for more than housing prisoners.
One of the most common uses for for-profit detention facilities is to accommodate immigration detention needs. These facilities can also be used or altered to accommodate many different community needs. Some have been turned into museums. They have been converted into administrative offices. In Portland, Oregon, a vacant 525-bed prison facility has been used for filming television shows and movies while serving as a foundation for the local anti-prison movement.

5. It is a system that has provided a history of proven results.
Although the privatization of prisons feels like a recent debate, it is a practice that has been followed for several generations. Everything from food preparation to inmate transportation has been contracted to third-parties since the first operational contracts were awarded in 1984 within the United States.

6. There is much less administrative red tape.
In the public prison system, decisions that involve the administration of the facility must go through several levels of legislation. Local congressional bodies may be involved in the process. Changes may need to be approved by the governor after a bill is debated. The process of change could last 2-4 years in some instances. With a private facility, everything runs through the company instead. That means any policy or procedure changes can be handled immediately and directly.

7. It provides an entry-level law enforcement opportunity.
Even with a criminal justice degree, finding work in law enforcement can be a difficult proposition. Many agencies want experienced personnel that can begin working immediately. For-profit facilities offer an entry-level position for correctional officers where that experience can be obtained. It is an opportunity to learn new skills, apply the knowledge from a criminal justice degree for the first time, and get comfortable. That can create some challenges because of inexperience, but the benefits often outweigh the risks in this category.


List of Additional Cons of Private Prisons

1. Private prisons can choose which prisoners they take.
Public prisons are often more expensive because they are forced to take on all prisoners, including those with high security risks. For-profit prisoners have the luxury of choosing prisoners that maximize their profits instead. If a low-risk prisoner becomes a high-risk prisoner under the supervision of a private prison, most companies have it in their contract that they can “replace” the prisoner. That is how they can run at cheaper costs compared to public prison populations.

2. They have no obligation to the community where the prison is located.
For-profit prisons operate on contracts. Most communities are responsible for the actual facilities that are being used, not the private prison. That means the for-profit company may not even be responsible for repairs or upgrades that are need. It also means that the prison can decide to leave if they feel like the prison isn’t profitable enough. Should that happen, a community is stuck with a useless facility, no jobs, and plenty of unpaid bills.

3. Employees face higher risks of violent conduct in private prisons.
Compared to public prisons, private prisons experience 50% more violence against employees from inmates. The rates of violence against other inmates is even higher. Many privatized prisons have staffing waivers which allow them to under-staff their facility compared to public prisons. Some facilities operate on a ratio of 1 officer for every 120 prisoners. They often rely on inmates to self-govern and reduce violence levels on their own – as another way to save money.

4. It creates a unique lobbying effort.
Since for-profit companies need prisoners to make money off of their prison, they lobby legislative bodies to change how laws are implemented. They ask for longer standard sentencing guidelines. Some may even lobby local law enforcement and prosecutors to charge people with higher-level crimes on the chance that they’ll receive a longer sentence that can be served within their prison.

5. Employees make less when working at a private prison.
In the United States, the average correctional officer in a public prison will earn about $36 per hour. They are still eligible for overtime with that wage in many instances and are treated as a public service worker. That means they are often available for pensions, good leave benefits, decent healthcare, and other public-sector benefits. Private prison employees average $14 per hour and may not receive any other benefits. It may also be salaried to avoid the need to pay overtime.

6. For-profit prisons may not offer any cost-savings advantages.
Although the primary advantage that is touted in the privatization of prisons is lower per-prisoner costs, that is not necessarily always factual. According to The New York Times, the inmates in private prisons may cost up to $1,600 more per person, per year, compared to prisons that are operated by the state. This discrepancy is in place even though there is a law that requires for-profit prisons to focus on cost-saving measures.

7. It doesn’t change the turnover rate of employees.
In Delaware, correctional officers are leaving at a rapid pace. According to the Correctional Officers Association, 57% of new hires leave the industry or the state within 3 years of being hired. Whether the prison is public or private, it is impossible to be effective at one’s job when there is such a high turnover rate. High CO turnover rates are also associated with higher levels of fatigue, stress, and disorganization.

8. Private prisons tend to limit training opportunities.
According to Time, for-profit prisons tend to achieve their cost-savings by cutting down on staff costs. That often means limiting the training opportunities that are available to correctional officers and administrative staff. Fewer training hours may be provided, which is then combined with higher staffing ratios, leading to higher levels of stress. It creates a much higher risk for everyone while providing a very small fiscal benefit.

9. It could create a system of dependency.
When governments are reliant on private companies to provide needed services, the potential for a destructive dependency becomes possible. For-profit companies could use that dependency as leverage to negotiate higher compensation rates. A common method of negotiation is to offer services at lower costs, create a monopoly around those services, and then jack up prices to maximize profits. This is a very real possibility if the privatization of prisons continues to be explored.

10. It lessens the levels of transparency within the system.
There are certain expectations in place that the government and public-sector must follow when it comes to transparency. That means the government becomes accountable for their actions to the people whom they serve. For-profit companies are not held to the same standard. The privatization of prisons could create a system where inmates are not treated ethically, but no one would ever realize what was going on because the company running the facility would not be required to report anything.

11. It creates the potential for bribery and corruption.
In 2008, a “Kids for Cash” corruption scandal was discovered in Wilkes-Barre, Pennsylvania. Judge Mark Ciavarella and Senior Judge Michael Conahan accepted money from Robert Mericle, who had built two for-profit youth centers that served as a juvenile detention facility. In one example, a child was sentenced to a substantial amount of time in Mericle’s facilities simply for mocking a principal on MySpace. More than $2.6 million changed hands. Several hundred adjudications were overturned upon a review of the various cases.

Privatization of Prisons: Is It a Good Idea?

In 2016, the U.S. Department of Justice announced that it would begin to phase out the use of private prisons for federally-based inmates. During the announcement, the DOJ noted that the reason for discontinuing the service was that for-profit prisons compared poorly compared to facilities that were operated by the government. They found that for-profit prisons provided fewer services, had higher safety risks, and had higher security risks without producing a substantial level of savings.

There are studies which also suggest that the opposite is also true. In addition, the private sector can always be incentivized to perform better, which is something that can be difficult to do from a public standpoint.

It all depends on one question: do we as a society feel that private corporations should run prisons? If so, then we must find ways to improve conditions while encouraging prisoner rehabilitation and reform the model. If not, then perhaps now is the time to pull the plug on this experiment.


Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.