Private Prisons: Making Money Through Mass Incarceration


Did you know that the United States has the largest prison population in the world? In 2020, there were 1.8 million people in the prison system. So, how does the government incarcerate that many people? And what happens when government-operated jails run out of space? 


As a result of federal prisons overcrowding, private corporations started developing their own facilities to house more people. Those who supported privatizing the prison system argued that it saved the government money. However, as these private companies created more detention centers, public officials and activists questioned whether these new facilities were actually harmful to the criminal justice system. 

Private Prisons

Private prisons are owned and run by companies that have contracts with the federal and state governments that allow them to take in and hold incarcerated people. 

The History 

In the 1970s, President Nixon declared a “War on Drugs”, which meant that he wanted “tough on crime” policies which would enforce strict punishments for any drug related offense. In the 1980s, President Reagan announced that he would continue this agenda with even more force. As a result, more and more people were arrested and sentenced to time in prison, and public facilities started running out of space. The first private prisons, many of which were juvenile detention centers, were established during the Regan administration, but corporations continued to rapidly build new facilities throughout the next two and a half decades. One of the most famous cases of corruption in private prisons, known as the “kids for cash” scandal, involved two judges in Pennsylvania who gave juvenile offenders unusually long sentences. Authorities found out that these judges had accepted over $2 million worth of bribes from private prisons over the course of four years in exchange for sending children and teenagers to these facilities for longer periods of time. 

The two biggest private prison corporations that arose are CoreCivic and the GEO Group, which control over half the private prison industry. Together they make over $3.5 billion per year and have continued to expand since 2005 by buying out smaller companies in the industry. In 2016, after the Department of Justice announced that private prisons would be phased out, both companies lost 50% of their stocks. However, the year after the inauguration of President Trump, both companies saw a more than 50% increase in stock prices. The Trump administration spent more than double the amount of money, about $595 million, towards contracting the GEO Group than the Obama administration. 

As of 2018, approximately 9% of federal and state prisoners were held in private institutions. While this may seem like a small population, it is important to note that the number of people housed in private prisons grew at a disproportionately fast rate. This is because nearly one in every four prisons built in the 1980s were constructed by a private company. One reason for this rapid expansion was that the US Immigration and Naturalization Services, INS, worked with private companies to detain undocumented immigrants. As of 2019, more than 80% of immigrant detainees are held in private facilities. Many of these centers are located near the U.S.-Mexico border. 

So What? 

News reports and interviews with formerly incarcerated people revealed that the conditions inside these prisons, and in particular, immigrant detention centers, are inhumane. The food is sometimes inedible, the buildings are unsanitary, and there is often very limited, if any, access to health and education services. Private prisons hire fewer staff, pay them less, and provide significantly less training than public ones. This has led to higher rates of violence between imprisoned people and staff members, and overall, more security issues. 

Critics also emphasize that because these companies operate for profit, that is all they truly care about. CoreCivic and the GEO Group have campaigned to convince politicians to incarcerate more people because the more beds they fill, the more money they make. For example, they lobbied to prevent immigration reform laws that would ease pathways to citizenship so that they could continue to house undocumented people. Criminal justice organizations have stated that the focus on profit allows the government to not take responsibility for making reforms. It also continues the practice of mass incarceration, or imprisoning large populations, particularly marginalized communities. 

Since 2016, these critiques of the private prison industry have pushed some elected officials and large companies to support divestment from private prisons. Activists stress that private prisons are just one part of the issue of mass incarceration in the country and that leaders must do more to reform the criminal justice system.

Think Further

  1. Do you think it is possible to change the way private prisons operate? What reforms would you make to the private prison industry? 
  2. Besides the creation and growth of private prisons, can you think of other issues in the overall criminal justice system in the US? 
  3. Why do you think the federal and state governments allowed private prisons to grow so quickly? 


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Learn More

  1. Basti, Vinay, et al. “Capitalizing on Mass Incarceration: U.S. Growth in Private Prisons.” The Sentencing Project, 2 Aug. 2018,
  2. “Investigation Into Private Prisons Reveals Crowding, Under-Staffing And Inmate Deaths.” NPR, NPR, 25 Aug. 2016,
  3. “Who Makes Money From Private Prisons?” CNBC, 29 Dec. 2019,