Private Prisons Drive Costs and Incarceration Rates Nationwide

Anidjar and Levine has released a new analysis drawing attention to the expanding role private prisons play in shaping incarceration patterns across the United States. Using data from the Sentencing Project and government sources, the report evaluates how privatized prison systems influence occupancy rates, policy decisions, and state-level reliance on for-profit detention facilities.

According to the data reviewed, nearly 91,000 individuals were confined in private prisons as of the end of 2022, making up approximately 8 percent of the total federal and state prison population. The findings show a consistent upward trend, with the number of people held in private prisons increasing by 5 percent since the early 2000s.

Two corporations dominate the industry. CoreCivic and GEO Group manage more than half of all U.S. private prison contracts and jointly generate roughly $3.5 billion in annual revenue. These companies operate under a financial model that charges the government a set fee per inmate, which studies estimate to be significantly higher than the actual cost of care. Reports suggest these charges can reach $150 per day per inmate, compared to an estimated actual cost of $100.

Labor practices within private prisons raise additional concerns. Incarcerated individuals are commonly paid wages ranging from 13 to 52 cents per hour, well below federal standards. Private prison facilities are also known to spend about 12 percent less per inmate than public institutions by reducing staffing costs and benefits.

A state-by-state breakdown reveals stark differences in private prison usage. Montana leads the nation, placing nearly half its prison population in private facilities. New Mexico follows with just over 30 percent, while Arizona and Tennessee each report roughly 29 percent. Hawaii ranks fifth, with 23 percent of its prison population in privately operated institutions.

By contrast, 22 states—including California, Michigan, and New York—currently do not house inmates in private prisons. Some states have even attempted to legislate against their use. Illinois passed a ban in 1990, yet still reported holding 1.1 percent of its prison population in private facilities as of 2022, illustrating loopholes and inconsistencies in implementation.

Policy reversals at the federal level have added further complexity. On January 20, 2025, newly elected President Trump rescinded an executive order issued in 2021 that had prohibited federal contracts with private prison providers. Although no federal inmates were housed in private prisons immediately following that reversal, the order allows for future expansion and renewed contract agreements.

Anidjar and Levine’s report also explores how corporate lobbying influences sentencing policies. Private prison firms spend more than one million dollars annually advocating for legislation such as mandatory minimums and three-strike laws, which statistically increase incarceration periods and prison populations.

These business strategies come with consequences beyond economics. The report highlights that private prisons report 65 percent more violent incidents than publicly run counterparts. Experts attribute this to understaffing, reduced wages for correctional officers, and underinvestment in rehabilitation programs.

Health care concerns and public safety outcomes are also affected. Facilities run by private corporations experience higher rates of infectious disease outbreaks, including a threefold increase in tuberculosis cases compared to public institutions in 2021. Poor sanitation, overcrowding, and minimal healthcare infrastructure contribute to these risks.

Recidivism is another key metric examined in the report. Critics argue that private prisons are not incentivized to reduce re-offense rates, since high recidivism helps sustain occupancy levels. Studies suggest private facilities offer fewer rehabilitation services, contributing to poorer post-release outcomes for incarcerated individuals.

At the local level, the influence of private prisons is equally significant. Some jails expand operations to house federal or state detainees through rental agreements, creating financial dependencies that distort municipal priorities. These arrangements can influence decisions about jail construction, budget allocation, and population management.

The report concludes by noting that marginalized populations are disproportionately represented in private prison systems. Those with low incomes, mental health challenges, and chronic illnesses are more likely to be housed in these institutions. This pattern underscores concerns about systemic inequities and the long-term impact of for-profit incarceration.

Anidjar and Levine’s analysis offers a comprehensive look at how private prisons operate, who they affect, and what reforms may be needed to address the intersection of justice, profit, and public accountability.