Private Prisons in the U.S.: History & Industry

Instructor: Vericia Miller
In this lesson, you will learn about private prisons in America and how they have evolved over the decades. The benefits and drawbacks of private prisons will also be discussed.

Private and Public Prisons

Let's say you get caught with a small amount of marijuana on your person. Depending on the amount, which state you live in, and if you have a prior criminal record, you may be convicted of a possessions charge and sent to a private prison. A private prison is a for-profit facility or institution designed to house those who violate the law. A private prison is designed, constructed, and operated by a private company rather than by the state like a public prison. In 2015, the United States had over 2 million people incarcerated with the highest incarceration rate in the world.

History Of Private Prisons In America

Private prisons have a long history in America but it wasn't until the early 1980's that they really became a household name. Due to President Reagan's 'War on Drug' policies, the public prison system was overwhelmed with inmates. To lessen the burden on state prisons which were overcrowded, private prisons were created. In 1983 the Corrections Corporation of America (CCA) stepped onto the scene as the very first private corrections company. There are several major private corrections companies in America but CCA (rebranded as CoreCivic) is the largest. In 2016, CoreCivic generated revenues of over 1.8 billion dollars. During the first half of 2017, CoreCivic's stock increased by 140% which signaled an upturn in the market of private prisons.

San Quentin was the very first private prison in America; although it is now an institution managed by the state. Prior to the early 1980's, private prisons were practically unheard of. As of 2015, there were approximately 126,000 inmates in privately owned facilities. Private prisons receive funding from government contracts. The more inmates housed in these institutions, the more money they receive. Their contracts are largely based on the number of inmates and the length of time an inmate serves. This means the more people incarcerated and the longer the sentences they serve, the more money private prison companies earn.

Benefits and Drawbacks

Legislators are not in agreement about the effectiveness of private prisons and the topic can be controversial. The purpose of private prisons is to remove the strain of overcrowding on state institutions in a cost effective way. Let's take a look at inmate costs in the State of California for example. California spent an average of $71,000 per year on each state prison inmate in 2016. This is an increase of $22,000 over the last six years. A study completed by the Vanderbilt Institute for Public Policy Studies found that states could save $15 million per year using private prisons.

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