Researchers find prison privatization can impede job growth

By Communications staff, Washington State University
PULLMAN, Wash. – Building on earlier research in which they challenged the widespread belief that rural communities can create job growth by hosting state prisons, researchers at Washington State University have now found local job growth is often impeded in communities that become hosts to privately operated prisons.
 
“Our most recent research, which relies on a large, comprehensive national dataset, is consistent with our prior work showing that prisons really make little contribution to local economic growth,” said Gregory Hooks, professor of sociology at WSU. “Moreover, our study reveals that, in states moving quickly to turn over management of their prison systems to outside companies, the privatization of prisons often has a negative impact on employment prospects in host counties.”
 
The paper, “Prisons, Jobs and Privatization: The Impact of Prisons on Employment Growth in Rural U.S. Counties, 1997-2004” was recently accepted for publication in the journal Social Science Research.
 
Proponents of privatization anticipate positive economic outcomes – lower costs to taxpayers, similar or improved service delivery and improved salary and working conditions. But Hooks and fellow researchers Clayton Mosher, WSU associate professor of sociology, and Shaun Genter, a WSU alumnus teaching sociology at Tacoma Community College, found many of the jobs promised by private prisons simply never materialized.
 
“Privatization of prison systems places downward pressure on staffing, pay and benefits for all prisons in the state, including those that have yet to be privatized,” Hooks said. “As a consequence, prisons not only fail to help, but appear to harm employment levels in their host communities.”
 
The researchers also determined that private prisons are less likely to contribute to employment stability than publicly run prisons because of their comparatively high turnover rate, which the researchers believe is the result of the relatively low wages paid by private prison operators.
 
The authors write that available data from the U.S. Department of Labor indicate the median annual wage for correctional officers employed by the federal government was $50,830, compared with $38,850 for officers employed by state governments and $37,510 for those employed by local governments. In contrast, officers employed in privately operated prisons earned a median salary of $28,790.
 
“Nationally, the most recent estimates of annual employee turnover in private prisons is 52 percent, compared to between 12 and 25 percent in public prisons,” said Hooks. “In Texas, for instance, a state senate committee found annual staff turnover rates of 90 percent in private prisons, compared to 24 percent among state-employed correctional officers.”
 
Hooks said one of the ironies of the prison expansion boom of the 1980s and 1990s is that state resources used to fund prison growth were often diverted from education, including state supported community colleges serving rural communities.
 
“The expansion of our state prison systems throughout the ‘80s and ‘90s was preceded by a 20-year period in which more than 250 new community colleges were constructed in rural counties,” he said. “But   with advent of the incarceration boom, public resources were diverted toward prisons and away from public programs in education and childcare.”
 
In “Community Colleges, Budget Cuts, and Jobs: The Impact of Community Colleges on Employment Growth in Rural U.S. Counties, 1976-2004,” published last year in the journal Sociology of Education, Hooks and WSU doctoral student Andrew Crookston found that the presence of a community college spurred local employment growth in host counties most years between 1976 and 1997. As state allocations shifted to other programs, including prison expansion, states raised tuition and cut programs. Subsequently, the positive impact of community colleges on local employment growth eroded.
 
“The literature on the impact of community colleges on local job growth is not extensive, but contributors to this literature agree that institutions of higher education make contributions to local economies through ‘spillover effects’—creating jobs for staff and faculty and consuming goods and services from local vendors.  Of course, community colleges and universities also help local economies through the development of skills and knowledge that allow and encourage individuals to contribute to the production of goods and services,’’ Hooks said.
 
“From the perspective of the rural community, this diversion of state resources from education to incarceration has had a combined adverse effect on local job growth,” he said. “Prisons provide few jobs and, in some cases, even impede local job growth. And the reallocation of public resources that accompanied their construction has tended to limit the role of community colleges in local job creation, as well.”