Mass incarceration disproportionately impacts low-income families, trapping them in cycles of poverty while prisons profit. Families often lose their primary income source, face inflated costs for basic services like hygiene products and phone calls, and are pushed into debt. Here’s how the system works:
- Commissary Markups: Items like deodorant are sold at 2-3x retail prices, with prisons taking a cut of the profits.
- Communication Fees: Phone and video calls come with high costs, generating millions in kickbacks for corrections departments.
- Economic Impact: Incarceration slashes household income, reduces local job opportunities, and costs the U.S. economy $1 trillion annually.
Reforms like capping fees, eliminating kickbacks, and ensuring transparency can reduce exploitation and support rehabilitation. Families shouldn’t bear the financial burden of a system designed to profit from poverty.
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How Prisons Make Money
The prison system generates revenue through various channels, often at the expense of incarcerated people and their families. These practices create substantial profits while placing financial pressure on already vulnerable communities.
Commissary Services: Markups and Commissions
Prison commissaries sell basic necessities like hygiene products at inflated prices. For example, deodorant that costs $1.98 in stores is sold for $4.84 in Kentucky prisons [5]. Since incarcerated individuals have no other purchasing options, they are forced to rely on these services. Companies like Keefe Group work with corrections departments, sharing profits through commission deals. In Kentucky, the corrections department takes a 22% cut from commissary sales and 15% from vending machines in visitor areas [5]. This profit-driven approach isn’t limited to commissaries – it also affects other essential services, like communication.
Phone and Video Services: High Costs and Kickbacks
Staying in touch with loved ones comes with a hefty price tag. Families face inflated rates for phone and video calls, with service providers and corrections agencies profiting through kickbacks. These financial arrangements allow contractors to raise prices while corrections departments rely on the commissions instead of government funding [1]. This setup highlights how incarceration becomes a means for financial exploitation rather than rehabilitation.
The Burden on Families
The costs associated with incarceration often push families into debt. In some states, incarcerated individuals spend over $1,000 annually on commissary items [3][4]. Beyond the immediate financial strain, the challenges of finding work after release hurt local economies and keep communities trapped in poverty [2]. These practices show how the system prioritizes profit over meaningful rehabilitation, reinforcing cycles of hardship and inequality.
The Bigger Problems Behind Prison Profits
Racial and Economic Inequality in Prisons
Prison profiteering hits communities of color and low-income families the hardest, deepening already existing inequalities. When someone is incarcerated, the financial strain doesn’t just impact them – it ripples across their entire household. For instance, one-third of women lose their household’s main income source due to incarceration, and 43% are forced to make tough decisions like working extra hours or putting their education on hold [2].
The overall economic hit from incarceration – including lost wages, lower productivity, and increased reliance on public assistance – totals a staggering $1 trillion annually. That’s nearly 6% of the GDP and is eleven times what’s spent on corrections [4]. For vulnerable communities, the impact is even more severe. Incarceration slashes lifetime earnings by 10-40%, creating long-term financial setbacks [4].
How Poverty and Incarceration Feed Each Other
Incarceration doesn’t just punish individuals – it disrupts entire local economies. It leads to lower wages, fewer job opportunities, and reduced tax revenue, while also driving up poverty rates and adding financial stress to families. This creates a vicious cycle where poverty and incarceration fuel each other.
| Economic Impact | Community Effect |
|---|---|
| Lost Wages and Employment | Less spending in local areas |
| Reduced Tax Base | Higher unemployment rates |
| Family Financial Strain | Rising poverty levels |
Adding to this, incarcerated individuals are often paid just pennies for their labor. While this saves governments millions, it perpetuates economic exploitation, making it harder for these individuals and their families to break free from financial hardship. This cycle highlights the urgent need for systemic changes to address these deeply rooted issues.
Weak Oversight Fuels Prison Profiteering
A lack of proper oversight allows prisons to exploit incarcerated individuals and their families. Take "Inmate Welfare Funds", for example – these funds are supposed to benefit those in prison but are often redirected to cover basic facility costs or staff salaries instead [1]. Services like money transfers and access to music also come with hidden kickbacks, further exposing the lack of transparency in prison operations.
"Incarcerated people have few options to adjust to price increases" [5]
Meanwhile, commissary services rake in $24.6 million in gross sales with operating costs of only $6.4 million. The profits stay within the system, benefiting operations rather than funding rehabilitation programs. This lack of accountability prioritizes profit over meaningful reform, leaving vulnerable families to bear the financial burden.
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Solutions to End Financial Exploitation in Prisons
Policy Changes to Stop Prison Profiteering
Legislative reforms are crucial to tackling financial exploitation in prisons. Some municipalities have already made progress by removing fees for basic services and renegotiating vendor contracts. Local governments can focus on capping or eliminating fees for phone calls and commissary items while eliminating hidden surcharges that disproportionately affect low-income families.
Ending kickbacks and excessive markups can ease the financial burden on families, making essential goods and services more affordable for incarcerated individuals and their loved ones.
| Reform Type | Current Practice | Proposed Change | Expected Impact |
|---|---|---|---|
| Commissary Pricing | 20-22% markup + kickbacks | Cost-based pricing | Lower costs for families |
| Phone Services | High fees + commissions | Affordable or free calls | Stronger family connections |
| Money Transfers | Multiple hidden charges | Flat, transparent fees | Predictable and fairer expenses |
The Need for Transparency and Accountability
Policy changes are a starting point, but transparency ensures these reforms are properly implemented. Regular audits and clear reporting on how funds are used can help ensure that revenue benefits incarcerated individuals rather than boosting facility budgets. For instance, in 2020, Kentucky’s corrections department generated $1.7 million in commissary revenue, which was directed toward life skills training and reentry programs [5].
Making financial data and contracts publicly accessible allows families and communities to see where money is going, enabling fairer practices. Public advocacy, backed by transparent information, is essential for holding institutions accountable and driving meaningful change.
Using Advocacy Platforms to Push for Change
Organizations like Georgia Prisoners’ Speak (GPS) bring attention to systemic issues and equip citizens with tools to demand reform. Advocacy efforts not only raise awareness but also put pressure on policymakers to prioritize fair practices over profit-making.
Successful advocacy involves a combination of strategies, including:
- Community Engagement: Building alliances among incarcerated individuals, families, and advocacy organizations.
- Data Collection: Gathering evidence on financial practices and their effects on communities.
- Legislative Action: Collaborating with lawmakers to draft and support reform bills.
Conclusion: Ending the Exploitation of the Poor
Breaking Down the Problem
Prisons generate massive profits from incarcerated individuals and their families, pulling in $18.2 million from commissary services and $8.4 million from phone services annually. Families are left spending over $1,000 each year on basic items, locking them into a cycle of poverty that makes rehabilitation and reintegration even harder [3]. This system hits low-income communities the hardest, creating a pattern of financial strain that demands urgent reform.
Steps Toward Change
Reform efforts need to focus on reducing financial exploitation, improving transparency, and addressing profit-driven systems. Here’s how:
| Focus Area | Key Actions |
|---|---|
| Financial Practices | Support laws that cap prices and remove commission-based profit structures |
| Transparency | Push for mandatory financial disclosures and regular audits |
| System Reform | Advocate for reinvesting prison-generated revenue into rehabilitation programs |
Advocacy groups are essential in these efforts, amplifying community concerns and holding institutions accountable. For instance, Kentucky has shown that commissary revenue can be redirected to fund rehabilitation programs [5]. Tackling this issue requires addressing both the immediate financial burdens on families and the larger systemic flaws. This means backing advocacy efforts, engaging in policy reforms, and demanding clearer practices in prison operations. The goal is to dismantle the structures that allow prisons to profit from poverty.
FAQs
Here are answers to some common questions about how prison profiteering impacts families and communities financially.
How does incarceration impact families financially?
When a family member is incarcerated, the financial strain can be overwhelming. About one-third of women lose their household’s main source of income, and 43% are forced to make tough decisions like taking on extra work or giving up educational plans [2]. These challenges, paired with the limited job prospects for those with a criminal record, often trap families in a cycle of poverty that can stretch across generations. Beyond the immediate financial hardships, this ripple effect also harms communities by reducing economic opportunities and increasing dependence on public assistance programs.
What are the costs of staying in touch with incarcerated loved ones?
The cost of prison phone calls can vary drastically depending on the state, creating significant financial pressure on families. For instance, in California, a 15-minute call costs $1.23 with no added kickbacks. In contrast, Arkansas charges $4.80 for the same call, generating over $2.5 million annually in kickbacks. These stark differences reveal how state policies can either ease or exploit the financial burden on vulnerable families.
These examples underline the pressing need for policy changes, which are explored in the solutions section.
