When They See Us and The Cost of Incarceration

Updated: Dec 1, 2019


As the mother of a black son, this movie had a profound impact on my view of the world. What hit me hard was Yusuf Salaam’s response to the $41 settlement the Central Park Five received after assault and rape charges were dropped almost 20 years after they were wrongfully convicted.


"No amount of money could have given us our time back," Salaam said. "And that time is really what's important."


As a financial professional who sees money transactions solve “problems” almost everyday, the fact that millions of dollars could not replace years of life lost in prison burdened my soul.


Large settlements and high prison budgets are only temporary band-aids for severe criminal and justice issues.


While I do not have long term solutions as I am not a criminal or justice expert, I can explore the costs that go into incarceration and challenge others to consider what financial efficiencies could leverage positive change within the prison system.


Costs to the Government


Most states allocate approximately 5% of their budget towards jail expenses. Although 5% is a relatively small percentage, this translates to more than $65 million in most states. For California, the cost is more than $70,000 per inmate, which is more than $8 billion.


While the cost per inmate can be high, the cost per correctional officers can be even higher. The U.S. Bureau of Labor Statistics reports the salary paid to a correctional officer as high as $78,000.


Most jail and prison funds are spent on correctional officers. In most states, more than one-third of funds are spent on salaries, benefits and uniforms for correctional officers.


Costs to the Taxpayer


The taxpayer's contribution to corrections funding is correlated with the state's Corrections budget. Taxpayers in states that allocate 5% of their budget towards Corrections will contribute approximately 5% of their taxable income towards jail and prison costs. For example, a taxpayer with $100,000 of income that resides in a state with a 10% income tax should expect $500 ((10% x 100,000) x 5%) of their annual pay to be allocated towards prison related costs.


This does not include tax dollars allocated to crime-related propositions, policing, private prisons, and federal prison costs.


Costs to the Incarcerated


Some jails and prisons require inmates to pay for essential items such as towels, blankets, and postage. In addition, many inmates have children whom need their financial support. To cover these costs, inmates in many prisons can earn money through UNICOR. As a wholly-owned corporation by the U.S. government, UNICOR contracts with various retailers to manufacture goods in prison. Inmates make everything from military uniforms to processed meat.

Some states are even expanding inmate work to service jobs. The New York DMV, for example, outsources some of its phone inquiries to inmates. Data shows that inmates employed by UNICOR have a smaller rate of returning to prison. Inmates, however, have led strikes in the past as the compensation for their labor is normally less than $2/per hour, far below minimum wage.

Costs to Families


Since prison laborers are paid below minimum wage, attorney costs, bail bonds, and the costs to help inmates reintegrate into society are often footed by family members. Families of inmates also have to pay for inmate services such as phone usage.


A 2019 TIME article revealed that the prison phone business is a $1.2 billion industry. The way the business works is - phone companies contract with state prisons to provide phone services. The states benefit from this contract as a percentage of the revenue made from prisoner phone calls is returned to the state. While the states and private phone companies benefit, many families struggle to afford phone calls. A 15-minute phone call can be as high as $4 in some states to as low as $0.14 in other states.


The cumulative cost of incarceration to families is almost $3 billion, according to the Prison Policy Initiatives "Following the Money of Mass Incarceration" Report. Some families have to sell their homes to help family members get out of prison, while others struggle with basic needs to make sure family inmates are financially taken care of. As we saw in When They See Us, most of these families also suffer emotional and social trauma while assisting family members in prison.


In spite of the financial burdens to inmates and family members, it makes sense for people who have committed severe crimes to serve jail or prison time as a consequence. The question at hand is whether the taxpayer dollars put into jails and prisons is efficiently supporting a system that will reduce recidivism and inmate costs.


As for the wrongfully incarcerated, it is clear from When They See Us that the consistent use of taxpayer dollars to imprison the innocent is a systematic deficiency that must be fixed.


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The mission of The Little CPA is to share information I have learned as a Certified Public Accountant that will

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