California Prisons, a Profitable Industry

by John Lawrence

We’ve been incarcerating more of our citizens than any other country in the world. 2.3 million Americans are presently behind bars. Since 1970 the number of people incarcerated in the US has grown by 700%. Even though we are 5 percent of the world’s population, we have 25 percent of the prisoners in the world. Most of those incarcerated are there for minor drug offenses including possession of small amounts of marijuana. 9.2% of African-American adults were in prison in 2008. One in six Latino men will spend part of their life behind bars. The for profit prison-industrial-complex has grown mainly due to the War on Drugs. The War on Drugs has become a war on drug users, non-violent offenders and poor people even though a majority of drug users are affluent.

Marijuana was legal in the US up to 1933. It became illegal precisely after alcohol became legal again after the Prohibition period from 1920 to 1933. As jazz singer Anita O’Day said, “One day weed had been harmless, booze outlawed, the next, alcohol was in and weed led to ‘living death.’” According to California-drug-treatment .com statistics show that 47.5 percent of drug arrests in 2007 were for marijuana offenses. And 60% of those serving time for drug offenses had no history of violent crime or significant selling of drugs.

Prisons are a profit driven industry especially in California. California spends 1370 times more on prisons today than in 1980. The prison-industrial-complex comes complete with lobbyists who lobby for more money to build more prisons and legislation that would incarcerate more people. As of 2010 it cost taxpayers $31,286. per state prisoner annually. California spends more on prisons than on higher education. Eric Schlosser wrote an article published in Atlantic Monthly in December 1998 stating that “The ‘prison-industrial complex’ (PIC) is not only a set of interest groups and institutions; it is also a state of mind. The lure of big money is corrupting the nation’s criminal justice system, replacing notions of safety and public service with a drive for higher profits. The eagerness of elected officials to pass tough-on-crime legislation — combined with their unwillingness to disclose the external and social costs of these laws — has encouraged all sorts of financial improprieties.”

Private prisons are the biggest business in the prison industry complex. About 18 corporations guard 10,000 prisoners in 27 states. The two largest are Correctional Corporation of America (CCA) and GEO Group (formerly Wackenhut), which together control 75%. Private prisons receive a guaranteed amount of money for each prisoner, independent of what it costs to maintain each one. This is from

If you have any doubt in your mind that improving society and lowering the number of prisoners in our country (normally considered a worthy social goal) is a threat to the prison industry business, all you need to do is to read about that concern in The GEO Group’s 2011 annual report:

In particular, the demand for our correctional and detention facilities and services and BI’s [a prison industry company Geo acquired in 2011] services could be adversely affected by changes in existing criminal or immigration laws, crime rates in jurisdictions in which we operate, the relaxation of criminal or immigration enforcement efforts, leniency in conviction, sentencing or deportation practices, and the decriminalization of certain activities that are currently proscribed by criminal laws or the loosening of immigration laws. For example, any changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities. Immigration reform laws which are currently a focus for legislators and politicians at the federal, state and local level also could materially adversely impact us.

This is an industry that needs misery, long sentences, rounded-up undocumented immigrants and increasing crime to flourish. In order to keep the prison beds filled, The GEO Group and others have paid out millions of dollars to lobbyists, federal and state legislators, and governors to allow our immigration problem to go unsolved, to make sure that no drugs are decriminalized and that an ineffective War on Drugs continues, and to make certain that long term prison sentences, like California’s three-strikes-and-you’re-imprisoned-for-life laws, keep a steady flow of revenue and profits flowing to their shareholders. They are also hoping that our national drop in crime is just a temporary trend.

The California 3 strikes law is, to a great extent, responsible for this deplorable situation. People are warehoused in prison for long periods of time for a succession of minor offenses. Many need treatment for mental problems and drug addiction which they don’t get in prison, and the accumulation of older inmates is costing the state big bucks. These services could be provided for less than the price of incarceration. And the failure rate of incarceration is exceedingly high. 60% of prisoners are recidivists within three years. Those who do get treatment or other social services including job training and education have a far lower recidivism rate. Sometimes it takes spending money to get people on the right track, and it saves society money in the long run.

Proposition 36 on the ballot this November would reform the California 3 strikes law. It would impose a life sentence only when the third strike was serious or violent. It authorizes re-sentencing for already incarcerated people if their third strike was not serious or violent. And it keeps in prison inmates whose first or second strike involved murder, rape or child molestation.

In 2011 the Supreme Court ordered the state of California to reduce its overcrowded prisons by 30,000 citing the Eighth Amendment’s ban on cruel and unusual punishment. Justice Kennedy described a prison system that failed to deliver minimal care to prisoners with serious medical and mental problems which resulted in “needless suffering and death.” Suicide rates in the state’s prisons have been 80 percent higher than the average for inmates nationwide. A lower court in the case said it was “an uncontested fact” that “an inmate in one of California’s prisons needlessly dies every six or seven days”. In 2006, Governor Arnold Schwarzenegger said conditions in the state’s prisons amounted to a state of emergency.

California has not been able to keep up with the exploding prison population. Therefore, it has outsourced its prisoners to other states. Profits are so good that now there is a new business: importing inmates with long sentences, meaning the worst criminals. When a federal judge ruled that overcrowding in Texas prisons was cruel and unusual punishment, the CCA signed contracts with sheriffs in poor counties to build and run new jails and share the profits. According to a December 1998 Atlantic Monthly magazine article, this program was backed by investors from Merrill-Lynch, Shearson-Lehman, American Express and Allstate.

Prisoners released with ongoing mental problems and addictions go back into poor communities, communities of color and communities which offer little in the way of rehabilitation or job opportunities. They can’t vote and can’t live in public housing even though their wives and kids might live in public housing. There are more than 3 million children with parents in prison. This impacts the childrens’ lives devastatingly. They can’t focus on what they’re doing in school so that the cycle of dysfunctionality perpetuates itself. Decriminalizing the marijuana laws would result in a great number of prisoners especially the non-violent ones being released and no new fresh arrests. This would be a blow to the for profit prison industry.

Prisoners can be better prepared to re-enter civil society. The Fresh Start program started by Elizabeth Gaynes teaches inmates on Riker’s Island to work in the food industry. The cost to the city is $5000. per person, and more than 90% don’t return to prison within a year. The program and Ms. Gaynes were featured on msnbc’s Melissa Harris-Perry program on September 8, 2012. You can view it here.




John Lawrence

John Lawrence graduated from Georgia Tech, Stanford and University of California at San Diego. While at UCSD, he was one of the original writer/workers on the San Diego Free Press in the late 1960s. He founded the San Diego Jazz Society in 1984 which had grants from the San Diego Commission for Arts and Culture and presented both local and nationally known jazz artists. His website is Social Choice and Beyond which exemplifies his interest in Economic Democracy. His book is East West Synthesis. He also blogs at Will Blog For Food. He can be reached at


  1. avatarGoatskull says

    I actually applied for a position at the Otay Mesa facility just a little over three years ago as a records keeper for the prisoners. I ended up not taking the position because I get a better job offer and took that position instead. From what I remember from the interview it IS a racket so to speak.

  2. avatarAnna Daniels says

    Anybody else notice that this topic is not addressed by either presidential candidate? This particular issue has more impact upon my City Heights community than the national debt.

  3. avatarJEC says

    Nor will California prisons be discussed in the State races. I trust I’m not the only one who sees a contradiction between the image of “progessive” California and the reality. California teachers must meet about the highest standards in the U.S.; a prisoner guard requires a high school GED and five months of training. On average in total, prisoner guards make 45% more than teachers AND get safety retirement (3% at 50). To me that’s a clear statement of what we Californians value the most.

  4. avatar says

    This is why it’s difficult to argue for privatization of a lot of basic tasks, especially the unsavory ones, such as housing prisoners. Once the prison system becomes a private business (such as it did long ago), a lobbying interest in protecting that business develops – and are we really proud to say that free enterprise in America means we have corporations that lobby to create more criminals in the interest of increasing profits for the people that lock them up?

    • avatarAnna Daniels says

      Right Dave. There is a vested interest in providing an unending stream of “criminals” to maintain the bottom (profit) line. I know you have a musical video…. bring it on.