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Expert Brief

Champion Magazine: Using Economics and Science to End Mass Incarceration

“Results-oriented” funding policies condition dollars on meeting performance outcomes. They can hold criminal justice agencies and actors accountable to producing results that reduce crime without unnecessarily locking people up. By enacting such policies across the board, state legislatures and the federal government can begin to curb mass incarceration — the greatest civil rights crisis of our time — while equalizing the ghastly racial disparities in the system.

  • Inimai M. Chettiar
Published: July 14, 2013

New York City has an end-of-year ritual almost as avidly watched as the ball descending in Times Square. It is the announcement, usually by the mayor, of the drop in the city’s crime rate. New York had 419 homicides in 2012 — the fewest since the city began counting in 1963. (In the first six months of 2013, homicides totaled 156, down 25 percent compared to the same period last year.) “The essence of civilization is that you can walk down the street without having to look over your shoulder,” said Mayor Michael Bloomberg.

New Yorkers are as proud of their safe city as they are of the Yankees. When the 2012 numbers were revealed, editorial writers were poised and ready. Many applauded the low total and then attacked critics of the New York Police Department’s controversial stop-and-frisk policy. The initiative detains people who have not been accused of breaking any law, but rather are suspected of having committed or are “about to commit” an illegal act. For example, the Daily News, extending the city’s peak homicide number of 2,245 in 1990 and matching it against the actual annual murder totals in the ensuing 22 years, wrote that the city was “spared 30,300 fatalities.” The News proclaimed:

[T]the department’s relentless critics see the cops not as protectors of life and limb, but as civil rights cowboys. They portray the NYPD’s program of stopping, questioning and sometimes frisking people who are suspected of criminality as rife with abuse. … They are dangerously misguided. They should imagine that 30,300 of the people around them had perished in bloodshed. And then they should give thanks for all the NYPD has done.

30,300 Lives Saved
New York Daily News, Dec. 30, 2012

Without realizing it, the News did the last thing the criminal justice system needs these days: data manipulation to propel ideological jabs.

U.S. District Court Judge Shira Scheindlin has since ruled the city’s stop-and-frisk policy unconstitutional. Perhaps stop-and-frisk has played a role in lowering the homicide rate. With 1.63 million stops between 2010 and 2012, it is a safe bet that at least a few murders were prevented, if for no other reason than a potential assailant was distracted from completing their intended act. The policy casts such a wide and sweeping net that it is bound to inadvertently stop would-be murderers.

But there is no evidence that the policy has been the primary force actually causing the “spared 30,300 fatalities.” If there were the sort of one-to-one correspondence the Newsimplies, then one would expect that as the number of stop-and-frisks grew by about 600 percent between 2002 and 2011, the number of people shot (a more useful measure of violence) would decline accordingly. It did not. The annual total was relatively consistent throughout, never varying more than 10 percent during the entire period.

What makes the News editorial truly disheartening is not the loose arithmetic or the lack of understanding the difference between causation and correlation, but rather its polarizing emotionalism. The language is especially inopportune because, for the first time in five decades, there is an opportunity for a bipartisan consensus on criminal justice policy. Now, finally, after spending at least $2 trillion fighting crime since 1970 (or about 13 percent of current U.S. GDP), pragmatism is starting to drive the debate, instead of raw emotion. In a time of constrained budgets from Washington, D.C., to the smallest hamlet, it has simply grown too expensive to perpetuate a system in which incarceration is the primary means of crime control.

Diminishing Returns

There is a growing mountain of evidence that there are less expensive and equally effective alternatives to tossing humans into steel cages. Incarceration is doubtless necessary for some, and has a deterrent effect on others. It is difficult to determine the ideal level of detention — sufficient for punishment and maximum deterrence, but no more. However, it is a certainty that the nation has long since passed the point of diminishing returns. There is also now the possibility of starting to treat the worst stain on the body politic since slavery: the system’s appalling racial inequities. The fact that one in three Black males will spend some portion of his life in confinement is widely acknowledged, but also widely ignored. Mass incarceration has completely depressed the economic earnings and political power of communities of color by keeping swarms of men of color fenced out of economic prosperity because of a criminal record or a prison sentence.

Elected officials know something is out of line when they are forced to choose between funding prisons or funding schools. That is not hyperbole: The U.S. spends an average of $11,000 per year per pupil in public elementary and secondary schools and about $31,000 per year per inmate. (In 2007, Connecticut, Delaware, Michigan, Oregon and Vermont spent more on corrections than higher education.) If “education is the investment our generation makes in the future,” as Mitt Romney once said, one does not need a Harvard MBA to recognize it is time to rebalance the portfolio.

Ending mass incarceration is not only a racial justice issue; it is also an economic one. Viewing the problem through both lenses will bring more clarity of solutions and help advocates form coalitions with those who may not be primarily driven by the injustice of racial inequality. The late Professor Derrick Bell identified this phenomenon years ago with his theory of “interest convergence.” Often, those who wield power do not yield because it may be morally correct; they do it out of self-interest. Appeals to “justice” or “fairness” are not likely to fuel reform when the majority is content that they can let their kids play outside without fear of getting shot. For example, it was not morality that led Texas to overhaul its criminal justice system in 2007; it was simple math. As the state was running record deficits, the Department of Corrections requested an additional $2 billion for prison construction to house more inmates.

“We moved the issue from one of being soft on criminals to one of being smart over the use of money,” Texas state House Representative Jerry Madden told the London newspaper The Observer. As the Republican chairman of the Corrections Committee, Madden was a key architect in changing the state’s approach to criminal justice. “If you are keeping people in prison who do not need to be there, then that is a waste of taxpayers’ money. We call it the department of corrections, so we should try our best to correct people, not just incarcerate them.”

The nation will be paying the tab for its 40-year “tough on crime” policy for generations. The same children whose parents were relieved that they could safely play outside will be less wealthy, and their children less wealthy, because of senseless policies such as the “War on Drugs.”

Impact on Economic Growth

When depression in lifetime earnings is considered, and its disproportionate effect on people of color, restoring the economic earning potential of those touched by the criminal justice system is no easy feat. For instance, a study by the Council on Economic and Policy Priorities found the higher unemployment of the formerly incarcerated cost the economy $65 billion in lost productivity in 2008 alone, even accounting for the fact that formerly incarcerated individuals earn far less than people with identical skills without a record. The number is roughly equivalent to Florida’s state budget.

The Pew Center on the States conducted a similar study. The numbers are stunning when race is taken into account, especially considering that as the huge prison population declines, the ranks of the formerly incarcerated swell. Before serving time, about two-thirds of male prisoners were employed and were their children’s primary means of economic support. As it is, about 1 in 9 African American children, 1 in 28 Hispanic children, and 1 in 57 White children have an incarcerated parent.

Presumably, after formerly incarcerated individuals have paid the penalty of separation from society for their transgressions, they should have the same opportunities as everyone else. That is not the case, of course. By age 48, the typical former inmate will earn a total of $179,000 less than if he had never been behind bars, not including earnings lost while behind bars. The earnings reductions are sufficiently substantial to reverberate through the entirecommunity of employed Black and Latino men. Total earnings of all Latino males are reduced by six percent because of incarceration and nine percent for all Black males. An admittedly hyperbolic way of looking at it is this: every working Black male takes nearly a 10 percent pay cut because of the lost wages of his previously incarcerated brethren.

At least 14 other states have followed Texas’ lead in enacting some type of reform to reduce reliance on prisons. These measures generally passed with little partisan rancor. Money, or more precisely, the lack of it, has led the nation to rethink whether mass incarceration is a benefit or a cost to the country. As of 2011, 1 in every 33 adults was under some form of judicial supervision (imprisonment, probation or parole), but the incarcerated accounted for only 30 percent of the total, according to the Council of State Governments. As states seek to curb their corrections costs — the second-fastest growing portion of budgets after Medicaid — by either releasing more prisoners or not confining them in the first place, or both, the ranks of the “walking convicted” will only grow.

These reforms enacted in states merely chip away at the edges of the incarcerated population. This movement is a divisive change in course from previous legislation that actually increased the population, but can serve to be stronger. As long as leading Democrats stay silent or do not advocate for the cause, what states will enact as seemingly “bipartisan” reforms will in actuality be much further to the right than the comprise that could have been struck had leaders on the left engaged in the political process.

Benefits Versus Costs

Policymakers must be especially rational and clear-eyed when allocating resources. First and foremost, lawmakers should take up reforms that are proven to deliver more benefits than costs — in terms of their fiscal, economic, public safety, and societal impacts. The exclusive focus on cost savings to the state is misguided; legislatures should replace that lens with one that analyzes “return on investment.” Is government spending money on programs that actually achieve their intended goals? Legislators are often misled by what is commonly considered the gold standard for measuring programs for the formerly incarcerated: recidivism rates. Stanford Law School Prof. Joan Petersilia, former president of the American Society of Criminology and co-chair of California’s Expert Panel on Rehabilitation Programs, spoke at a National Institute of Justice conference last June. She noted, “We need to urge that when we start measuring performance, we aren’t just talking about recidivism. … I can get that down. Let’s just decide we are going to let people fail three or four times and not [incarcerate] them. I can get your arrest rates down. I can get a lot of things down.”

Washington State has been a leader in this area. Faced with the possibility of opening three new prisons by 2030, state legislators directed the Washington State Institute for Public Policy (WSIPP) to explore less expensive, proven alternatives that produce societal and economic benefits that outweigh their costs. They reviewed more than 500 studies in the United States and overseas, and, as a result of their findings, the state enacted a variety of reforms. But the WSIPP continues to monitor programs, providing robust analysis. For instance, in July 2011 the WSIPP evaluated a program for juveniles on probation known as Family Functional Therapy (FFT). The program costs about $3,200 per participant and immediately saves taxpayers about $8,500, primarily due to reduced juvenile crime. But the benefits do not end there. There are labor market and health care gains because of increased high school graduation rates. Overall, the net present value savings for each person in the program is $34,500. “The internal rate of return on investment is an astounding 641 percent. [W]hen we performed a risk analysis of our estimated bottom line for FFT, we found that the program has a 99 percent chance of producing benefits that exceed costs,” the WSIPP wrote.

Sadly, not every state is as foresighted. Kansas, which passed reform measures in 2003 and 2007, has now backtracked. Faced with severe budget shortfalls, offender drug treatment services were slashed by more than 60 percent in 2010, purportedly saving $7 million. Yet, in January, the state reopened a prison with a $4 million annual budget. Even Texas’s prison population has begun to creep back up.

Results-Oriented Reforms

As is true with all tragedies, they are far easier to create than repair. Lawmakers must move away from laws based in fear that are ineffective in crime control (have little benefit) and create more problems (have high “costs” to communities and the country). The most recent innovation — “social impact bonds” allow private sector investors to receive higher rates of return dependent upon positive outcomes instead of finances — is promising, but untested. But there is already a valuable lesson in this experiment: government dollars can be powerful motivators to steer criminal justice actors towards positive outcomes. “Results-oriented” funding policies condition dollars on meeting performance outcomes. They can hold criminal justice agencies and actors accountable to producing results that reduce crime without unnecessarily locking people up. By enacting such policies across the board, state legislatures and the federal government can begin to curb mass incarceration — the greatest civil rights crisis of our time — while equalizing the ghastly racial disparities in the system. By demanding solutions that actually work to solve the identified problem, the country can move forward while guarding against repeating mistakes of the past.