What are the incentives here?

Although inmate labor is helping budgets in many corners of state government, the savings are the largest in corrections departments themselves, which have cut billions of dollars in recent years and are under constant pressure to reduce the roughly $29,000 a year that it costs to incarcerate the average inmate in the United States.

Senator John Ensign, Republican of Nevada, introduced a bill last month to require all low-security prisoners to work 50 hours a week. Creating a national prison labor force has been a goal since he went to Congress in 1995, but it makes even more sense in this economy, he said.

Not that this could ever affect parole or imprisonment decisions…  I prefer a situation where each prisoner costs the state government a good deal.

The full story is here.


I believe that the incentives were explored in The Shawshank Redemption.

I'm missing something here. What's the cost? All ethical concerns aside.

What's the cost - they are working instead of.... what?

What kind of labor are they doing?

All I can think of is they would be, possibly, taking work from the private sector who can't possibly pay $0.00 in wages. Right?

The gerontocracy needs a good police state to fix their fiscal mess.

I find that scary.

I am for privatizing all most every thing but not prisons. What do politicians (and the median voter) privatize? Prisons.

That's easy. The incentives are the same as grad school.

Creating a national prison labor force has been a goal since he went to Congress in 1995, but it makes even more sense in this economy, he said.

So now our jobs can be stolen by actual thieves.

In this economy it makes even *less* sense to allow prison labor to compete with the labor of law-abiding citizens. Prisoners shouldn't be allowed to work while (a sufficiently large number of) law-abiding citizens are unemployed.

It's just quasi-slave labor for the profit of the prison industry. Not only are the incentives terrible, but in a depressed labor market, the economics are terrible too.

There's a perverse incentive to keep people in prison. If the government has a choice between "free" labor from inmates and "market" labor by contracting out work to the private sector (or even hiring people directly to do it), there is less incentive to release the inmate.

If the inmate's labor costs are greater than the $29k / year required to house them, the government is making a paper profit on their inmates.

California spends $60,000 per year per inmate.

The incentive is to spend as much as possible on union prison workers -- and funnel as much of that as possible back to the legislators who set those salaries.

prison workers in CA make more than K-12 teachers and many college teachers.

Cowen doesn’t give any evidence to support this view. Pending evidence that juries are over-eager to convict, we should assume that we’d get the optimal number of prisoners if the cost of incarceration was zero (not $29,000/year.)

Cowen’s argument is like saying that the more military waste and inefficiency we have, the better -- because it makes wars more expensive. And actually, that would make sense if one believes that politicians are massively biased in favor of war and it is impossible to change that bias.

But do we have any evidence that juries are over-eager to convict?

Moreover, wasting the potential work of prisoners is just inefficient... surely toughening standards for conviction -- while making convicts pay for themselves -- would be more efficient.

But do we have any evidence that juries are over-eager to convict?

I don't know.

I do know we have lots of politicians who are eager to lengthen sentences, reduce parole rates, and so on. Clearly, these policies increase the number of prisoners.

Greg is right. In many states, prison location becomes prison pork.

My wife's foster brother, an ex-Seal, visited a friend in a state prison far, far, far away from the population center where this person, a former accountant, was incarcerated (his conviction, his crime, etc. is a story that ends with the conclusion: if you are a recently graduated student, never, never 1) drive a friend to a 7-11 without knowing what he's doing and 2) accept a public defender, particularly when the judge suggests that you shouldn't).

Anyway, this prison is far, far away. As he drives to the prison, my wife's foster brother remembers he needs cash. So he looks for a cash machine. One is closed. Then another. And finally, just outside the prison, there is this cash machine, one from the SAME bank he uses. He uses his ATM, only to find: the cash service charge is THREE times the charge he normally pays anywhere in the state. Now that's a story and I'm thinking about following it up on in a pricing class. So, if anyone wants to be an empiricist, go to your nearest prison neighborhood and do some cash machine service fee price discovery.

It's not just the locals who get the benefit of the prison pork, but those who tag along.

So America finally learned something from communist China.

Prison labor for municipal jobs. (Unpaid) nuns to teach in the school children.

Better not give them a minimum wage, as you know what that does to incentives, because they may want to keep coming back.

My dad used to work part-time as a prison doctor. There's a surprising number of people in prison intentionally because it was the only way they knew they'd get medical care (8th Amendment gives inmates a constitutional right to healthcare, the rest of you saps are on your own).

Sooner or later, Congress will wake the eff up and amend the Social Security Act to drop Medicare's eligibility age to birth. Until then, yeah, there are definitely incentives towards recidivism.

Having worked as administrative individual (contact, but not care and custody) in a prison industries environment, I don't think Tyler or Ensign have a clue. Have no fear, the output of prison labor will never significantly reduce the cost of incarceration for a bunch of reasons.

1.) Need for constant supervision. Theft or misuse is a constant concern as is sabotage.

2.) Restriction on type of tools (inmates can't possess sharp tools, heavy items, computers-especially with internet access, and even benign items like mops yellow yarn is enough of a fantasy for "date night".)

3.)Limits on staffing: Inmates come in two varieties (stupid and dumb). The dumb ones are just that, and don't learn. The stupid ones are those-often of high intelligence, ego and low discipline-that either flew off the handle once or thought they could never be caught. The stupid ones are worse, they often think they can pull off a prison scam more than one outside.

4.) Limits on markets: The products are not generally allowed to be sold to compete with private vendors, by law.

Despite this there are good reasons to have inmate labor: one, it keeps them busy. If they are busy, they aren't trying to compromise the corrections staff-the average successful scam takes something like 19 months to pull off, and an idle mind is the devil's workshop.

The second is that most are going to be released. They need to be exposed to showing up, on time, being dressed properly, ready to work, taking orders, not mouthing off at the boss and other things we take for granted.

Prison industries are the best thing we have for behavior modification, but it's hardly perfect, but any hopes of fears that we might significantly offset costs or incentivize sentence inflation is misplaced.

Maxim said:

Cowen doesn’t give any evidence to support this view.

There is a wide body of evidence that shows that price theory is correct and demand is negatively sloped with respect to price. From my undergraduate course: simple budget constraints, with no behavioral assumptions, will yield this result. That's enough for me.

If you have an alternative theory where people demand less of a good as its price falls, I would love to see it. Yes, I understand Giffen and Veblen goods.

Given the racial makeup of our prison population, how is this not simply re-introducing slavery?

Prisoners are after all human beings and citizens fo this country. They should be given equal rights with duties and responsibilities too just like any of us.

Well, the fact that the US has the highest incarceration rate in the world would suggest [juries are over-eager to convict]

Highest incarceration rate with what denominator?

A) The population?

B) The number of crimes committed?

In either case, a higher incarceration rate does NOT imply an over-eager conviction rate. It could easily imply greater efficiency in identifying and prosecuting criminals.

If incarcerations are high because of a high number of crimes, it means our punishments aren't harsh enough and the incarceration rate is too low.

We're all quite aware of the costs of confining a prisoner. This cost is more than justified by the cost of ONE of their crimes had they not been locked up.

What's it worth to you not to get murdered? Or to have your wife raped? Or for your kid to be molested? Or for your mother to be run over by a drunk driver?

Incarceration is money well-spent. But we need to cut costs: feeding them minimally nutritious gruel, providing minimal health care, and enforcing iron discipline and training to make them functioning human beings instead of sociopaths.

Look at this data engine to see what California Corrections employees make. Psychiatrists and dentists in prisons are earning more than $400,000 per year, each!

I don't have a psychiatrist, but I know my dentist isn't making $400K plus world-class benefits and pension.

In the case of prisoners sentenced to life, the way forward is clear. Hand them over to a private corporation or family business to do menial labor. The new private custodian would be obliged (and would see it is in their own interests) to provide the necessities of life but no more. For example, the prisoners could pick cotton.

I don't think many of you pay a whole lot of attention to the way Government works.

You seem to think Government would love free prison labor so it could save money. This is flatly insane. Government would hate free prison labor because it would take jobs away from low-skilled unionized employees who are a major source of votes and campaign contributions. In Wisconsin, government janitors are enraged because they might have to contribute more to their pensions -- to a rate half the national average. Replace them with prisoners? Ha!

You also seem to think that numbers like "$29K per inmate" would drop if we had fewer inmates. No, they would rise as the denominator of the fraction goes down, due to the huge fixed costs of the prison system. My neighbor is a prison guard, and he's retiring in three years at age 42, and getting 80% of his salary for the rest of his life. Setting loose some heroin dealers is not going to change that.

Jim, you seem to be of the clearly false assumption that the government cares about low-income workers. If the government cared about low income workers they wouldn't be cutting short-term spending unnecessarily when unemployment is at 10%. The corporations that account for their campaign donations that they use to run political ads to convince unemployed low-income workers to vote for them no matter what they do would love free forced labor from inmates, so the government will also love it.

Good point Meg. I'm sick of people implying that certain people are more prone to crime than others. That's why I let my twelve year old daughter go into any neighborhood she wants at any time of night or day.

"On the other hand, if the prisoner cost the state a good deal to keep in prison, the state has profit incentive to release prisoners"

That perspective requires two premises, and both seem incorrect to me. First, that state is assumed to be an entity unto itself; it, of course, is merely a power/enrichment mechanism being fought over by various contingencies. Secondly, the state is assumed to be profit maximizing, a consequence of the first assumption to be sure, but nonetheless ridiculous.

My view is that the voting blocks that comprise the prison-industrial complex see expenses as gold plated dollar signs; thus, there is an incentive to incur as many costs as possible. However, they have to justify these costs, and what makes better justification than having large inmate populations that put demand pressure on current infrastructure?

Now, I’m willing to concede that there is probably some cost point that would be deemed unsustainable from a political, if not financial, point of view, but it is probably rather high. After all, American seems to have high incarceration rates as well

Where are you folks getting your crime statistics?

From the non-partisan government agency whose job it is to collect and disseminate crime statistics - the Bureau of Justice Statistics.

If you don't believe their data, there's really no point in having any discussion on the matter because you are rejecting reality and substituting your own.

"I'm not arguing that blacks have a greater affinity for crime by virtue of their melanin content."

Good, because that would be a very silly argument.

[The dentist] doesn't face the (perceived) risks and conditions a prison dentist does-would you prefer working in a nice office, or behind barbed wire.

Our soldiers in combat (including doctors, dentists, and lawyers) don't get paid $400,000 per year. I think you are grossly overestimating the danger premium for working in a prison. And many of these highly paid people are CHIEF dentists and psychiatrists who possibly do nothing other than manage the $300,000 per year dentists and psychiatrists.

If the state of California laid off all it's $400K dentists and psychiatrists and offered the positions at half that pay, do you think they'd get few applicants?

Are the actual or perceived risks and conditions worth about $200,000 of additional pay per year, plus generous pension benefits based on that inflated salary?

Inquiring minds and concerned taxpayers want to know.

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