Prisons systems stimulate the American economy. This is because many companies put money into and profit from prison institutions and mass incarceration. This includes private prison companies and banks. Private prison companies have contracts with the government to operate hundreds of prisons, jails, and immigration detentions centers across America. These contracts force private prisons to operate according to a statement of work, which outlines the requirements private prisons must follow. These requirements include following laws, codes, regulations of the state and policies regarding inmate discipline, use of force, sentence computation, and inmate classifications. By profiting from incarceration private prisons companies perverse incentive to make business decision that lead to more people being incarcerated.
Two of the world largest prisons companies are CoreCivic and GeoGroup. GeoGroup is a company that specializes in privatized corrections, detention, mental health treatment, and stress control. This company has an income of 192.2 million and a revenue of 1.61 billion. CoreCivic is a company that owns and manages private prisons and detention centers and operates others on a concession basis. CoreCivic has an income of about 332.06 million, with a revenue of 1.736 billion. CoreCivic and GeoGroup are both corporations that rely on debt financing to conduct their daily business operations and acquire smaller companies. Multiple banks help fund companies like CoreCivic and GeoGroup. The biggest banks that help with funding these corporations are Wells fargo, Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, and U.S Bancorp.
Banks help finance these companies by doing services for these companies like, extending revolving credit, underwriting their bonds, and providing these companies with term loans. These banks profit from collecting fees and interest on credits, bonds, and loans, as well as from investing their clients money in shares of CoreCivic and GeoGroup. This financing allows the companies to expand and while also giving the banks a great return on their initial investments. These banks are enabling these companies to profit off the criminal justice system. With this involvement these banks are complicit in a policy of mass incarceration. Banks like Bank of America will continue to make profits from inmates even after they are released.
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Metropolitan correctional center is a U.S federal administrative detention facility operated by the Federal Bureau of Prisons. For the 790 federal prisoners incarcerated at Metropolitan Correctional Center, Bank of America controls the prisoners provisions of money transfers, E-messaging, and some telephone services. When inmates are released JPMorgan will issue a high-fee payment card to distribute money from their prison accounts, which include money from their jobs and family. Using the card it will charge the card owner $0.45 to check balance, $1.5 if they are inactive for 90 days, $10 for a teller assisted withdrawal, and $2 for a atm withdrawal. This is another way these large banks will earn profit. Many big corporations use prison labor to increase company profits.
Some companies that use inmates as workers are: Starbucks, Victoria’s Secret, Whole Foods, AT&T, Walmart, and Nintendo. Examples of this include,Walmart producing their goods in jail farms, a place where penal labor convicts are put to economical use in a farm for things like agriculture, logging, quarrying, and mining. Additionally, The massive phone company, AT&T, has been using inmates to work in their call centers since 1993, all while paying them less than two dollars a day. The Private federal prison industry also produces nearly all military goods, from uniform helmets to ammunition, along with durable goods ranging from paint to office furniture. Prison labor based in private prisons is a multimillion dollar industry inmates are forced to be apart of. For people doing time in federal prisons working is not optional.
The Crime Control Act of 1990 established that all federal prisoners who are physically capable of working, mush have a job while serving their sentences. People who choose to not work are locked up in solitary confinement. These working inmates get paid on average eighty-six cents a day, while corporations rack up billions in profits. When prisoners have the opportunity to engage in productive labors that pays a wage, it adds to the economy. This makes the incentive to lock more people up increase. In a standard bail agreement families that can afford the bail amount will give the money directly to the court and their money will be returned to them once a case is over. For families that rely on private bail bonds instead of paying a refundable amount they will pay a nonrefundable portion of the bail, usually ten percent, to a bail bonds company, which then writes a bond for the full bail amount promising that it will be paid if the person does not appear in court.
That ten percent is money that families will pay and never get back, even if there is no conviction. In addition, bail bonds will make families pay loan installments and fee even after the case is resolved. Bail bond agreements often include additional terms which brings on additional fee, surveillance, and property loss, if the customer put up a house as collateral. In Maryland families of people who were accused of crimes and went on to be cleared parted with about 75 million in non-refundable bail bond payments. In 2015, less than five thousand families in New Orleans together paid $4.7 million in non refundable premiums. There are about 25,000 bail bond companies across America and they issue about 14 billion in bonds each year. This industry as a whole brings in about two billion dollars in profit a year.
