Mass Incarceration is Costing American Society More Than $1 Trillion a Year

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The United States has more people in prisons than any other country in the world, and the cost of this mass incarceration is often estimated at around $80 billion a year. But that only accounts for costs paid by federal and state governments, and does not include the costs shouldered by the families and community of incarcerated people, or society at large.

According to a new study from Washington University, the real estimate could be as much as $1 trillion a year.

“For every dollar in corrections spending, there’s another 10 dollars of other types of costs to families, children and communities that nobody sees because it doesn’t end up on a state budget,” said Michael McLaughlin, the doctoral student and CPA who led the study. “Incarceration doesn’t happen in a vacuum.”

Those costs come in many subtle forms. They include wages not earned while incarcerated, as well as reduced wages earned after release due to discrimination against formerly incarcerated people. Many businesses refuse to hire people who have served time, regardless of what the charges were, and this closes off access to many higher-paying jobs. As a result, people who have been incarcerated are much more likely to commit crimes than those who have not been, because they need to find ways to fill in financial gaps.

Children with one or more incarcerated parent are more likely to become incarcerated themselves at some point. They also have a harder time with school, resulting in poorer education and lower wages in the future. Communities with high proportions of formerly incarcerated people, generally poorer communities in the first place, suffer from lower tax revenue and therefore reduced access to services that might help people stay out of prison in the first place.

Formerly incarcerated people also have a higher mortality rate, meaning they die earlier and therefore have less potential to earn wages, pay taxes, and otherwise support their communities, further exacerbating the problem. There are so many people currently or formerly incarcerated that virtually every community contains people who are or were in prison, thus increasing the chances of having members who will end up there themselves.

Although the study’s authors acknowledge that there may be other factors at play beyond incarceration, they say they have controlled for these factors in their research.

“If anything, we believe our study underestimates the true cost of incarceration,” McLaughlin said, because the cost in terms of emotional health and ongoing trauma can’t be quantified in dollars.