For-Profit Prisons

By: Jose Gomez

United States correctional facilities number in the millions, and a sizable portion of incarcerated people are held under the rule of for-profit prisons. For-profit prisons are correctional institutions managed by third parties that receive a contract from the US government to withhold its people in prison. [1] The problems with for-profit prisons are their susceptibility to having more safety violations in comparison to public prisons; in addition, they also have fewer cost savings than government agencies first intended them to have when they first formed the contracts. For-profit prisons in general run on the idea of making a profit from their business with less scrutiny put into the treatment and running of the institutions themselves.

Numbers-wise, these prisons hold approximately 8 percent of the US prison population, accounting for around 118,000 people, including inmates and immigrants in detention centers. Even though for-profit prisons run on the mantra that they offer cheaper correctional services than state prisons, in 2011 alone, for-profit prison corporations earned a staggering $5 billion from US government contracts. [2] Proportionally speaking, this is still less than what the Bureau of Prisons spends on average per person in prison, especially considering that for-profit prisons account for less than one-tenth of the US prison population—or so it would seem. A recent report by AP News found that for-profit prisons operate at an additional cost of $5 per inmate per day compared to the state prisons they reviewed, debunking the idea that private sector corrections management economizes better than government facilities. [3]

To improve our understanding of contemporary for-profit prisons, we must first look back at the start of correctional facilities in the United States.

According to the US Department of Justice, the making of the colonies brought about the privatization of corrections and criminal justice, from the transport of convicts to the punitive measures taken to punish them. This trend continued until the late nineteenth century when the English idea of spending time in prison began to take root in America. Many of these new for-profit prisons were “very crowded” and “unsanitary,” with little to no attention put to the rampant labor exploitation and lack of basic human services available to people in prison. [4] The motto of these for-profit prisons was simple: “For most of the correctional history of the United States, prison labor was expected to generate a profit for the institution. If generating a profit was not feasible, it was incumbent upon the prisoner to pay the costs of incarceration and become self-supporting.” [4] This could involve the person in prison who works at reduced or non-existent wages similar to the slavery that was abolished just decades earlier.

It was only in 1905 when President Roosevelt “prohibited the use of convict labor on federal projects” that led to the reduction in the use of prison labour in privately-owned facilities. [4] This eventually led to the creation of state-run prison systems all around the country, which allowed the government to completely fund, employ, and monitor inmates in such a fashion that the law authorized for, reducing the overall exploitation of people in prison in the private sector.

Even with this transition to public institutions, the 1970s brought about the era of modern for-profit prisons with juvenile facilities being taken over by them. The DOJ admits that one of the first government agencies to make use of the growing privatization of prisons was the US Immigration and Naturalization Service, which held undocumented immigrants in private detention centers. In the end, it is said in the report that facilities like private juvenile institutions “have not received nearly the level of scrutiny and criticism as have their adult counterparts,” with similar conclusions reached for adult and immigrant facilities. [4]

Nowadays, the conditions of people in for-profit prisons, alongside proper inspection and scrutiny from US government agencies, are in decline. In comparison to a select number of state-run facilities of the Federal Bureau of Prisons, for-profit facilities have “more safety and security incidents per capita” compared to public prisons, and their “cost savings… are not guaranteed.” [5] Not only are savings not assured, but the actual treatment of people in for-profit prisons seems to be regressing into the same behaviors that led to government intervention in the early twentieth century. Some of these violations include “contraband, reports of incidents, lockdowns, inmate discipline, telephone monitoring… drug tests and sexual misconduct.” [6]

The reason for this decline in safety and savings may be a hesitation to invest in incarcerated individuals who are less likely to stay in The decline in safety and savings may be due to the hesitancy to invest in incarcerated individuals who exhibit more predictable behavior and are less likely to serve lengthy sentences. A study conducted by the University of South Alabama and the University of Tennessee at Chattanooga found that 90 percent of people incarcerated in for-profit prisons are held under medium or minimum levels of security, as opposed to the 69 percent put under that level of security in public prisons. People in for-profit prisons also stay for way less time compared to those in public prisons, “11 months versus approximately 28 months,” respectively. [7] In addition, officers in for-profit prisons get paid significantly less than their counterparts in public prisons with the range of pay differing by around $12,758 (ibid). This combination of factors, alongside lack of administration from local governments, may be the primary contributors to the overall worsening conditions within for-profit institutions.

For-profit prisons, apart from having a history of exploitation and dismissal of inmates, are today becoming an unsustainable business model that looks to benefit from government contracts while ignoring those held under their bars.


[1] Fettig, A., & Nellis, A. (2021, March 30). Private prisons in the United States. The Sentencing Project.

[2] Taibbi, M. (2014). The divide: American injustice in the age of the wealth gap. Scribe Publications.

[3] The Associated Press. (2019, January 1). Audit: Private prisons cost more than state-run prisons. AP NEWS.

[4] Austin, J., & Coventry, G. (2001). (rep.). Emerging Issues on Privatized Prisons. Washington, D.C., Washington, D.C.: U.S. Department of Justice.

[5] Gotsch, K., Basti, V., & Porter, N. D. (2018). Capitalizing on Mass Incarceration: U.S. Growth in Private Prisons. Washington, D.C., Washington, D.C.: The Sentencing Project.

[6] Lopez, G. (2016, August 12). A federal report just confirmed it: For-profit prisons are more dangerous than public ones. Vox.

[7] Blakely, C. R., & Bumphus, V. W. (2004). Private and Public Sector Prisons—A Comparison of Select Characteristics. Federal Probation Journal, 68(1).

The Author

José Gomez is an undergraduate at UChicago with an interest in economics and political science. Seeking a future career in immigration law, he is passionate about increasing awareness of migrants down at the border. José enjoys volunteering, running alongside Lake Michigan, and reading history books.

About the Author

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