Prisons Don’t Create Jobs

People act as if prisons work for economic development. They don’t. 

–Prison employees don’t usually live in the prison town. They commute in.

–Prisons, especially private prisons, rarely purchase goods and services locally.

–A private prison might pay property taxes. But public costs for water, sewerage, traffic and other public resources might cost more.

–Prisons usually supply inmate labor at little or no cost. Even just picking up trash on the roads can take jobs from civilians.

–Prisons attract fast food and big-box retailers. Small local businesses who expect more activity end up getting priced out and closed down.


Morrow County, Oregon, wanted a new prison and didn’t get it. Over the next six years, private-sector employment in Morrow County grew by 27%, including new business clusters in cutting-edge industries. The median household income rose from $23,207 to $43,776.

Umatilla County, adjacent and home to two large prisons, lost 1,460 jobs over the same period.

Most importantly:

–The town becomes a prison town. Entrepreneurial and attractive business doesn’t settle in a prison town. They move someplace else.

–If prisons do create jobs, it’s simply because public money is being spent. If the government wants to spend money to create jobs, can’t it do something else? A school, a hospital, a community college? Spending like that leads to growth. Prison spending yields no actual economic activity.

Professor Gregory Hooks of Washington State University is a foremost researcher on the subject. Hooks observes: “Increases in total nonagricultural employment, retail sales, average household wages, the total number of housing units, and the median value of owner-occupied housing were substantially lower in new prison compared to non-prison towns ….Our research into employment growth suggests that prisons are doing more harm than good among vulnerable counties.”

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