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  5. America's mass-incarceration problem is a huge cost suck for the entire economy — but it's especially devastating for minority communities

America's mass-incarceration problem is a huge cost suck for the entire economy — but it's especially devastating for minority communities

Paul Constant   

America's mass-incarceration problem is a huge cost suck for the entire economy — but it's especially devastating for minority communities
Policy3 min read
  • Paul Constant is a writer at Civic Ventures and the cohost of the "Pitchfork Economics" podcast.
  • He spoke with Robynn Cox, an inequality researcher at USC School of Social Work, about prison reform.
  • Cox says over-incarceration in the US seriously aggravates problems of poverty and systemic racism.

America has a well-known mass incarceration problem. While the United States makes up less than 5% of the global population, our prison system holds approximately 20% of the world's total prison population. And even though it's been on a slight decline since 2008, the total population of incarcerated Americans has increased by 500% since 1970.

But when you step back and look at the demographics of the people incarcerated, a larger and more malicious problem becomes apparent. According to a 2018 report to the United Nations by The Sentencing Project, Black Americans comprised 27% of all individuals arrested in the United States in 2016 — double their share of the total population. Meanwhile, 15% of all US children are Black, yet Black youths made up 35% of juvenile arrests in that same year.

The criminal justice system, with all its inequities, extracts a heavy economic price that ultimately affects every single American.

A 2021 Brookings Institution report found that individuals lose close to $30,000 when detained in jail while awaiting the resolution of their criminal cases, even if they're eventually found innocent. In her 2016 book "A Pound of Flesh," University of Washington sociology professor Alexes Harris reported that in some counties in Washington state, the average legal financial obligations of former inmates totaled more than $9,000.

All those costs add up, and the economic ramifications of over-incarceration can ripple outward to throw whole communities into economic despair. In this week's episode of "Pitchfork Economics," Robynn Cox, an economist and inequality researcher at the University of Southern California School of Social Work, offered a broader view of what incarceration has done to our economy.

"Having a felony conviction worsens employment and earnings, and of course that effect is worse for racial and ethnic minorities as well," Cox said. Even if they serve out their sentence, fulfill parole standards, and never commit another crime in their lives, Americans who enter the prison system have lower levels of wealth over the course of their lives and find it harder to get credit or loans.

Incarceration itself, Cox said, "can be disruptive to social networks, which we know are also really important for obtaining and maintaining meaningful employment."

America's incarcerated population is getting older, with more than 10% of the population being over the age of 55. Cox said those who have spent their lives in prisons "may not have adequately been able to pay into Social Security," which is an essential retirement resource for minority populations in particular.

Regardless of age, "both the individual and their family members suffer health consequences from contact with the criminal legal system and from being incarcerated," Cox said, which can result in higher chronic illnesses that are related to stress — and thus higher medical bills.

"And then, of course, there's intergenerational effects," she said, where children bear the financial and physical brunt of a parent being incarcerated as well.

So while the annual operations costs of America's prison system is around $80 billion every year, that's just what it costs to feed and clothe prisoners and pay for facilities and operations. In 2017, nonprofit think-tank the Prison Policy Initiative estimated that if you take all the indirect impacts in mind, the true economic cost of incarceration in the US is about $180 billion per year.

That's a staggering figure, and not one that can be solved by "throwing more police at the issue," Cox said.

"We've tried to incarcerate our way out of this, and it's just really expensive to do that. The public is paying the cost," Cox said.

The way to fix this is "to make those investments that Dr. [Martin Luther] King and others had argued for many years ago, to try and address those root causes, which are really inequality in opportunity," Cox said. That means investing in education for underserved communities, from preschool all the way to university, and addressing inequities in employment and housing.

"And then of course, the 'R' word — or reparations — could be a policy as well, because we're really trying to address these root causes that have led to these inequities and these disparities," Cox said.

Throwing people in prison only worsens the problems of poverty and systemic racism, but building equitable economic solutions for everyone would help us put an end to our shameful standing as the worst jailer in the world — not to mention, it could cost the US a lot less money to do the right thing.

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