Recession Affecting the Prison System


The new unemployment figures have just been released, showing the nation holding steady with a 9.6% rate.  What was largely responsible for the net loss of 95,000 jobs in September was the layoffs among government workers, especially school teachers.  The Los Angeles Times reported that there was a “loss of 76,000 jobs at local governments nationwide. Two-thirds of those were teachers, administrators and other staffers at public schools.”  This was during a period when the private sector added about 64,000 jobs.


The Times also reported that there were substantial losses among workers in public safety, public works and county social services.”  In California governor Schwarzenegger “vetoed nearly $1 billion in spending on welfare, child care, special education and other programs,” which will no doubt lead to more layoffs in that state.  


Little notice has been made in recent months of the impact the recession has had on the prison system, especially private prisons.  A story in Newsweek this past summer illustrates this.  


The story begins with the little town of Baldwin, Michigan (population 1,107), which lies at the intersection of US 10 and state route 37 in the western part of the state.  (This is typical of the prison building boom of the past couple of decades, as most new prisons have been located in small rural communities.)  The town had been going through some hard economic times, with one-third of the families live under the poverty level.  The GEO Group recently spent $60 million to expand the 530-bed North Lake Correctional Facility (a former juvenile prison) into a 1,755-bed facility to detain illegal immigrants before deportation. This was supposed to provide jobs for people in the area.  However, in March the federal government cancelled the project.


Now the town has an empty prison with more beds than citizens.


And so it goes all over the country.


In the spring Arizona stopped sending prisoners to facilities in Oklahoma, California and Colorado and as a result several prisons are empty.  Corrections Corporation (CCA) reported that they had 11,600 empty beds this past May.


According to the Newsweek story it is not so much that there has been a significant decline in the sentencing of offenders to prison, but rather many states (e.g., California) “are crowding prisoners into more facilities.” 


Always on the lookout for increased market share, private prison companies like CCA are dealing with the empty beds by expanding into foreign markets, like the United Kingdom, South Africa, Australia and New Zealand.


On the other hand, some states are cutting back on the number of prisoners by passing legislation to allow the reduction of the number of parole violators returned to prison, such as what California has begun to do.  California recently announced plans to release 40,000 prisoners in order to save money.  In Michigan the governor is hoping to release as many as 12,000 prisoners and at $32,491 per year for each prisoner, that’s a huge amount of money to be saved (almost $400 million).


In Oregon a law was passed that would allow some prisoners to reduce as much as 30% from their sentences by expanding "earned-time credits," and to also move up the release dates for about 3,500 prisoners. Likewise in Ohio, Kentucky, Colorado, Illinois and in South Carolina.


Virtually every state  and most cities, counties and small towns are desperately trying to balance their budgets.  Few even consider raising taxes and instead, like Schwarzenegger in California, make the cuts that hurt people already in desperate situations.  Yet the rich continue to be able to smile all the way to the bank and continue to get tax breaks.  One current example is in California where one of the richest families has received a $30-million tax break as part of a deal “to close California's $19-billion budget deficit.” As the Los Angeles Times reported the special deal “will allow the Humboldt Redwood Co. to deduct $20 million in old losses from future taxes,” plus “cover penalties and interest for the firm co-owned by three sons of Donald G. Fisher, founder of the Gap and Banana Republic.”  Meanwhile children, the mentally ill and others get their support pulled, in addition to programs that fight substance abuse (one of the leading correlates of criminal activity).


More than 30 years ago James O’Connor wrote about the “fiscal crisis” facing states in that they continue to have to assist businesses in accumulation of private capital, but at the same time they must try to maintain peace and order.  The “crisis” is that in order to maintain peace and order the states must increase expenditures, but “the revenues for meeting these needs are not always forthcoming, since the fruits of accumulation (greater profits) are not socialized.”


© 2010, Randall G. Shelden. All rights reserved. No part of this may be reproduced without permission from the author.