The Economics Of Prison Monopolies

June 29, 2014 in Daily Bulletin

Stephanie Clifford and Jessica Silver-Greenbergjune wrote that prisons are allowed to operate monopolies that charge prisoners unreasonable amounts:

  • In one prison a telephone call starts at $3.15, each email costs 33 cents, and money transfers require a fee of $4.95.
  • Companies that offer products to prisoners are able to charge such high amounts because they are often granted a monopoly to operate the service.
  • Local governments have little incentive to change the system since they get a cut of the profits. In one county the sheriff’s office gets 84% of the revenue.
  • The prison businesses are expanding their services. One is offering a $50 tablet which will allow prisoners to listen to MP3s and read books. Those who get their family to pay money for the device will, of course, be charged additional fees.
  • Even once prisoners are released the government may continue to charge fees. Any saved up prison earnings, for example, are put on a pre-paid debit card which imposes fees.
  • The companies note that the fees are used to offset the cost of monitoring prison communications.

Read more about the various fees that are charged, the companies that charge them, and the burden they impose on the families of prisoners over here.

Source: The New York Times