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The negative effects on the economy caused by mass incarceration

The negative effects on the economy caused by mass incarceration

The negative effects on the economy caused by mass incarceration
February 24
22:36 2020

For those unaware, the United States has the highest incarceration rate in the world.

Incarceration rates have risen across all 50 states throughout the years. The amount spent to keep an individual incarcerated varies from state to state. For example, New York spends an average of $60,076 and Kentucky spends an average of $14,603 per inmate, according to a study done by Skidmore College. The amount of money that is being spent hinders the labor force participation which is key to sustaining economic growth. Currently labor force participation is low due to most individuals who are being incarcerated are between the ages of 19 and 39, according to a report by Julia Bowling, a writer for the Brennan Center For Justice. Individuals in this age range are key in being able to contribute to the growth of the economy and incarcerating them lowers the quality of our workforce. 

The more individuals that are being incarcerated the higher the unemployment rate is. Consequently, the U.S. economy loses in between $57 billion and $65 billion in output annually, according to a report by The Center for Economy and Policy. For ex-prisoners, it is very difficult to re-enter the workforce. This leads to higher state and federal government assistance payouts, loss of income tax revenue and drains the amount of monetary investment that can go into essential welfare programs. 

When a parent is incarcerated one must think of the effects this has on the youth population as well. Having a parent in prison not only doubles the chance of a child experiencing social and academic problems but it also increases their chances of being incarcerated. The U.S. economy loses an estimated $2 million every time a juvenile makes a career out of being a criminal. This leads to a decrease in economic mobility. If a juvenile decides to take this path it could increase recidivism rates. It is estimated that criminal recidivism reduces the annual GDP by $65 billion

When discussing incarceration, one must not only discuss the costs that come associated with the inmate but also the costs for victims, criminal justice system costs and the type of crime that was committed. When a crime is committed, one must take into account how the victim will be affected. In most cases victims will face an economic loss and expect some sort of restitution. Also, depending on the crime committed toward the victim, medical care costs and reparations must be accounted for. The state and federal governments are also required to fund the trial process which includes being able to hire prosecutors and fund the incarceration of the offender. The type of crime that is committed also plays an important role when discussing how much money is lost by the state. For example, when someone commits a murder, it costs the state approximately $750,000 in reparations for the victim alone. By the time all other costs are included like the trial of the defendant, incarceration and others, the state has spent roughly $9 million, according to the report by Skidmore College. 

If the United States wants to be able to increase their labor force participation and sustain their economy they should also consider treating the opioid crisis as a public health issue instead of treating it as a criminal activity issue. The government loses approximately $80 billion annually when prosecuting those with drug addictions, according to Alex Muresianu, a writer for the Foundation for Economic Education (FEE). If the opioid crisis was treated from a public health issue perspective it would improve economic prospects for the government and would also improve individual prospects. State and federal governments should also consider decriminalizing marijuana. The legalization of marijuana would decrease state spending by $6 billion and federal spending by $4 billion, according to FEE

To conclude, if we take into account the various types of expenses that go into incarcerating an individual it is apparent that incarcerating someone has many economic downsides. If we keep incarcerating individuals that do not really need to be there, not only will the government not have enough money to invest into welfare programs, but it will also increase the unemployment rate. The U.S. economy will eventually get to a point where it will slow down in growth due to not having the necessary labor participation needed to sustain it. As a society we can no longer afford to maintain the present system of mass incarceration. 

Featured Illustration: Austin Banzon

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Eunice Hernandez

Eunice Hernandez

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