Picture a multi-billion dollar industry with corporate ties ranging from Boeing, Macy’s, Nintendo, Starbucks, and Victoria’s Secret. Picture industry giants with sizeable strings to pull in Washington. Picture an industry where CEOs receive $5.7 million in executive compensation.
If you’re envisioning an investment bank on Wall Street, think again. Orange is the New Black is more on the right track.
Private prisons are a cash cow. Private companies rake in billions of dollars in revenue each year through the United States’ inmate population.
In fact, this trend is so widespread that it has its own term: the prison-industrial complex.
Critical Resistance, a national grassroots organization working to dismantle the prison-industrial complex, defines the complex quite elegantly:
“The prison industrial complex (PIC) is a term we use to describe the overlapping interests of government and industry that use surveillance, policing, and imprisonment as solutions to economic, social and political problems.”
Corporations can benefit from the prison-industrial complex in several ways. Many, including technology and food companies, do so through contract prison labor.
Starbucks, through subcontractor Signature Packaging Solutions, has hired Washington state prisoners to package holiday coffees. Sprint has used inmates in call centers. Inmates have sewn Victoria’s Secret products (including the “Made in USA tags).
Not only is this behavior completely legal, but it’s also quite easy and actually encouraged by government policy. Under the Work Opportunity Tax Credit (WOTC), employers receive a $2,400 tax credit for every work-release inmate they employ, as a reward for hiring “risky target groups.”
This process is called “insourcing,” and companies who participate in it are free to avoid paying for benefits such as health insurance or sick days, and don’t have to bother with pesky issues like unions, vacation requests, or flexible work requests.
More nefariously, some companies profit simply from the existence of prisons. These companies, such as The GEO Group (formerly Wackenhut) and Corrections Corporation of America (CCA), house and profit off of thousands of state and federal inmates.
GEO, as of 2010, contracts with 13 states, the Federal Bureau of Prison, the U.S. Marshals Service, and U.S. Immigration and Customs Enforcement. That same year, 66 percent ($842 million) of GEO’s revenue came from U.S. corrections contracts.
Private prison companies like GEO have little incentive to rehabilitate prisoners or work toward alleviating societal problems. In fact, it’s quite the opposite: private prison operations profit from society’s woes.
This has undoubtedly contributed to the country’s skyrocketing prison population. Put simply, more prisoners means more cash for private prison corporations.
In 1980, there were 319,598 people in federal or state prison. By 2013, that number had exploded to 1.57 million.
The private prison industry—and other members of the prison-industrial complex—have doggedly lobbied in D.C. and state capitals across the country for laws that increase the prison population under the guise of being “tough” on crime.
Many states have passed so-called “mandatory minimums,” which strip judges of the ability to determine the length of an offender’s sentence. These laws set an automatic minimum length for given sentences, guaranteeing lengthier prison terms and, thus, greater profits for companies in the prison-industrial complex.
Given the significant dollars at play, it should be no surprise that the prison-industrial complex is deeply entrenched. In fact, even the average worker inadvertently benefits from the prison-industrial complex. Vanguard Group and Fidelity Investments, the United States’ top two 401(k) providers, are enormous investors in the private prison industry. Together they own roughly 20 percent of GEO and CCA.
This problem may seem pervasive, and indeed, something needs to be done. It’s unfair to take advantage of prisoners simply because they’re behind bars—and unless the average person makes some noise about this problem, nothing will change.
Canton Winer is a senior at Fordham University. He has worked as a Collegiate Correspondent for USA TODAY, and is the former Managing Editor and current columnist at The Fordham Ram. Check out his digital portfolio, or follow him on Twitter: @CantonWiner.