9 Surprising Industries Profiting Handsomely from America's Insane Prison System
It's no coincidence that the United States now imprisons more of its people than any other country in the world: mass incarceration has become a giant industry in the U.S., resulting in huge profits not only for private prison companies, but also, for everything from food companies and telecoms to all the businesses that are using prison labor to cut their manufacturing costs. The prison-industrial complex even has its own lobbyists: according to a 2011 report from the Justice Policy Institute (JPI), the U.S.’ largest private prison company, the Corrections Corporation of America (CCA), and their competitor the GEO Group have both spent hundreds of thousands of dollars lobbying forlonger prison sentences. And the American Bail Coalition has been lobbying for the bail bond industry for 23 years.
One of the main reasons so many people are imprisoned in the U.S. (which now has 25% of the world’s prisoners even though it comprises only 5% of the world’s population) is the war on drugs, which has brought with it draconian sentences for nonviolent drug offenses. In a 2013 report on Americans serving life without parole for nonviolent offenses, the American Civil Liberties Union found that 79% were incarcerated for drug-related convictions. Three-strikes laws, which mandate life without the possibility of parole after a third felony conviction, have also done a lot to expand the prison-industrial complex.
Reform is at odds with the agenda of many powerful industries. It's well-known that private prison companies draw their profits from mass incarceration, but they’re not the only ones. Here are nine industries that are profiting quite handsomely from the prison-industrial complex and mass incarceration in the U.S.
1. Food Supply Companies: Supplying food for prisons can be extremely profitable. Just ask the Philadelphia-based Aramark Corporation, which brings in millions of dollars bringing food to around 600 prisons in North America. Aramark’s profits continue to roll in even when the company does a terrible job. In 2014, Aramark received fines of $98,000 and $200,000 from the state of Michigan for a long list of infractions, including meal shortages, unsanitary conditions (maggots found in the food, for example) and Aramark employees smuggling contraband into prisons. But such fines were a small price to pay in light of the fact that, in December 2013, Aramark signed a three-year, $145-million contract with the state of Michigan. Aramark has had problems in other states as well, including Kentucky (where corrections officers said poor food service led to a prison riot in 2009), Florida (where state officials ended a contract with Aramark after accusing the company of boosting corporate profits by skimping on meals) and Ohio (where Aramark employees have been fired for having sex with inmates).
2. Telecommunications: Although corporatists love to describe themselves as believers in free-market competition, the reality is that many of them do everything they can to rig the game, avoid competition and become monopolies. One telecom company that operates as a monopoly in many prisons is Global Tel* Link (GTL). The company has been making $500 million annually in profits thanks to its exclusive contracts with a long list of prisons. When prisoners make collect calls via GTL, the person accepting the call pays inflated rates of up to $1.13 per minute. GTL can get away with charging those rates because it doesn't have to compete with other telecom companies in the prisons where it has exclusive contracts.
3. Healthcare Companies: Inside American prisons, decent healthcare is hard to come by. Corizon, a company that specializes in prison healthcare, is making an estimated $1.4 billion annually despite doing an abysmal job caring for those they are paid to treat. In 2012, seven sick prisoners died in a Louisville, Kentucky jail where Corizon was in charge of healthcare; the city of Louisville later canceled its contract with Corizon. In the video, Prison Profiteers, a Tucson, Arizona woman whose incarcerated son had hepatitis C was told by Corizon employees that they had “no protocol for treating" the disease, which is rampant in prisons.
4. Telemarketing and Call Centers: Many American corporations have moved their call centers to India, the Philippines, Honduras and other countries where they can get away with paying slave wages. But some Americans corporations in need of call centers have found an even cheaper source of labor: American inmates. USA Today reported in 2004 that 2,000 or more prisoners in the U.S. were working in call centers. About 80 of them were in Snake River Prison in Oregon, where inmates were being paid around $120-$185 a month for working full-time. When companies can get people to sell and promote products, handle customer service or make hotel reservations for 75 cents an hour, there is much incentive for keeping the prison-industrial complex alive.
5. Clothing Manufacturers: Prisoners are making a lot more than license plates these days. A wide variety of products are being manufactured in U.S. prisons, from office furniture and bedding to sinks, toilets and clothing. All kinds of clothing is made in American prisons: shirts, hats, pants, shoes, jackets, you name it. Even Victoria’s Secret has profited from the prison-industrial complex: in the 1990s, Victoria’s Secret subcontractor Third Generation hired 35 female inmates in North Carolina to sew lingerie.
6. The Technology Sector: Back in the 1950s, '60s and '70s, unionized manufacturing and packaging jobs were great for the American middle class. But that was before so many of those jobs were outsourced to Pakistan, Bangladesh, China and other countries with ultra-low wages and terrible working conditions. Some corporations, however, have found a source of ultra-cheap labor right in the U.S.: inmates, whose pay can be as low as 35 cents an hour. The technology sector has been willing to make use of prison labor. Exmark (a Microsoft subcontractor) used prisoners in Washington State for shrinkwrapping Microsoft products (including mouses and software) in the 1990s, and in 2003, Dell used federal prisoners for recycling desktop computers.
7. The Bail Industry: According to research by the ACLU and the Nation, the bail industry now pulls in $2 billion in revenue annually. They described the practices of bail bondsmen like Eric Amparan, who keeps 10% of a bail amount as a non-refundable fee even if the person is found innocent. The higher the bail amounts set by judges, the more bail bondsmen stand to make—and Prison Profiteers reported that between 2002 and 2011, the American Bail Coalition (a lobbying group for the bail industry) spent $3.1 million lobbying for judges to set higher bail amounts. Prison Profiteers also noted that average bail amounts increased substantially with the growth of the prison-industrial complex, going from $39,800 in 1992 (the year ABC was founded) to $89,900 in 2006.
8. Food Processing and Packaging: The prison-industrial complex not only uses companies like Aramark that bring food to prisoners, it can also use prison labor to process food for people on the outside. In 2008, Mother Jones’ Caroline Winter reported that in California alone, prisoners were processing “more than 680,000 pounds of beef, 400,000 pounds of chicken products, 450,000 gallons of milk, 280,000 loaves of bread, and 2.9 million eggs.” Winter reported that Signature Packaging Solutions, a Starbucks subcontractor, was using prisoners to package holiday coffees.
9. Agriculture: With more states fining farmers for hiring undocumented workers and fewer agricultural workers coming in from Mexico, the prison-industrial complex has been using more prisoners as a source of farm labor. This is happening everywhere from Georgia to Arizona to Idaho, where in 2014, State Sen. Patti Anne Lodge (a Republican) sponsored a bill allowing agricultural employers to hire prisoners. The bill was quickly signed into law by Idaho’s Republican governor C.L. Otter.