A new report from prison abolition group Worth Rises has exposed the extent to which corporate America profits from the desperation of the incarcerated. The 132-page study, entitled “The Prison Industry: how it started, how it works, how it harms,” blows the lid off the scandalous business practices organizations involved in what has become known as the “prison industrial complex” employ to reap billions in annual profits.
“The prison industry is ubiquitous in our society. And yet we pay so little attention to it and we know so little about it. This report is really hoping to unveil the prison industry, the government and corporate actors who are exploiting the fact that they have been in the shadows,” Bianca Tylek, Worth Rises’ founder and executive director told MintPress.
In economics, a “captive market” is a situation where consumers face a severely limited number of suppliers, meaning their only choice is to purchase what is available (usually at a much higher price) or make no purchase at all. Most people resent and feel exploited by the higher prices in captive market situations like stadiums, movie theaters, and airports. But prisons take captive markets to a whole new level.
Being incarcerated is expensive, with inmates forced to pay for extra food and many things most would consider basic necessities, such as toothpaste and phone calls. Often just being sent to a correctional facility incurs a $100 “processing fee” prisoners must pay, while visitors are often charged “background check fees” as well. Prisoners’ friends and families transfer $1.8 billion into correctional facilities every year. Faced with no other choices, they are forced to accept money transfer fees up to an outrageous 45%. Financial corporations like JPay and JP Morgan Chase partner with correctional facilities in order to ensure the best deal for them — and the worst deal for the prisoners. As the report notes:
The industry was built on a profit-sharing model between financial services corporations and correctional agencies — the cost of which is layered onto money transfer fees and billed to families. After years of corporate grooming, some agencies now explicitly award contracts to the bidder offering the highest kick back percentage. As a result, not only are contracts often awarded to the most expensive service provider, but correctional administrators are also incentivized to limit cheaper or free alternatives from which they do not profit.
Prisoners are often forced to use special debit cards for purchases, many of which charge fees as high as $2.95 per transaction, $0.95 for declined transactions, and a weekly “service fee” of $2.50. And on the outside, JP Morgan Chase charges a $10 fee to withdraw money from the card at an ATM.