If we want to understand the total impact of the private for-profit prison industry we must understand the economic impact of this industry. Because incarceration rates continue to increase, despite decreasing crime rates, real spending on incarceration exceeds $80 billion annually. Eleven states in the U.S. spend more on incarceration than higher education.
Indirect costs of incarceration add up to hundreds of billions of dollars annually in the USA. For example the U.S. system of mass incarceration hurts the poor, people of color, families and taxpayers. It is becoming increasingly difficult for individuals to be successful and attain the American Dream after coming out of the criminal justice system. The rise of the private for-profit prison industry has only made this worse. Government contracts with prison vendors have made it very profitable for large corporations and shareholders to put people into prisons. Private prisons are paid for each day prisoners occupy their prison cells which means they have no incentive to release prisoners. This profit motive is causing our society to incarcerate increasing numbers of people in private prisons. For-profit prisons financially benefit from long-term incarceration and recidivism.