Mass incarceration in the U.S. is a vast, publicly funded system costing governments and especially American families, and specifically justice system-impacted families, hundreds of billions of dollars annually, and it’s become more important than ever for citizens and taxpayers to follow the money behind mass incarceration policy and the spending those policies support.
Incarceration spending continues to rise despite decreasing crime rates primarily due the misguided rhetoric-driven “tough on crime” policies enacted over the past few decades, such as mandatory minimum sentencing, lengthened sentences for violent offenses, and increased parole revocations. These factors mean that even with fewer new crimes being committed overall, more individuals are incarcerated for longer durations, maintaining high prison populations.
Despite seeing crime rates at historic lows, the money funding mass incarceration efforts continues to flows through public agencies and employees, and various private companies, while substantial costs are borne by the families of incarcerated individuals.
A recent report from Prison Policy Initiative noted that families and individuals involved in the system pay over $27.7 billion a year in fines, fees, bail premiums, and commissary and telecommunications costs. This is more than five times the amount going to private prisons and detention centers. An additional study found that when lost earnings are included, the cost to families is staggering, reaching an estimated $348 billion annually.
So who benefits from mass incarceration spending?
- Government Employees: Almost half of the money spent on running the correctional system goes to paying staff. These employees form an influential lobby that sometimes prevents reforms that could reduce the need for their jobs.
- “Shadow Budgets”: Funds generated from marked-up commissary and phone call prices often go into “inmate welfare funds” which, due to lax oversight, are sometimes used to cover essential facility operations and even staff salaries and equipment that should be paid from public budgets.
- Bail Bond Companies: This industry collects over $1.65 billion in nonrefundable fees from defendants and their families and actively lobbies against bail reform efforts that threaten its profits.
- Specialized Vendors: Companies providing goods and services like commissary items and phone calls to incarcerated people bring in $5.6 billion annually. They often secure monopoly contracts and charge exorbitant prices, with families bearing most of the cost.
- Correctional Health Care: Private health care providers profit from contracts, often providing inadequate care at great cost.
- Private Prisons and Detention Centers: The government pays these companies to operate facilities, primarily for immigration detention.
The flow of money in mass incarceration creates a cycle of poverty and economic injustice. The significant costs divert resources from proven, community-based solutions in the areas of education, public health, and other community investments, while permanently damaging the earning potential of formerly incarcerated individuals and their families.
To learn more, read “Following the Money of Mass Incarceration 2026” at the Prison Policy Initiative website. Prison Policy Initiative is a non-profit, non-partisan organization that produces cutting edge research to expose the broader harm of mass criminalization, and then sparks advocacy campaigns to create a more just society.
