I think the gigantic increase in the United States’ prison population and sentencing norms over the past 30 years is one of the largest drivers of inequality and stagnating wages that doesn’t get discussed in the generic inequality story.
So it is great to see the Economic Mobility Project, an Initiative of the Pew Charitable Trusts, release a report: Collateral Costs: Incarceration’s Effect on Economic Mobility (full pdf here). It’s written by Bruce Western and Becky Pettit. I’m a big fan of Western’s Punishment and Inequality in America, and this report expands on many of those arguments and updates the data.
It’s interesting to think of the massive increase in our prison population, to numbers over 1 in 100 and by far the largest in the world as a percent (and in terms of actual population larger than the top 35 European countries combined) as a type of exogenous change, equivalent to discovering computers. This change didn’t happen by accident but instead by changing sentencing laws, the War on Drugs and legal decisions on who goes to prison and for how long. It accounts for roughly 25% of the reduction in crime, a blunt, expensive way of tackling this problem.
Did I mention expensive: “The direct cost of this imprisonment boom, in dollars, has been staggering: state correctional costs quadrupled over the past two decades and now top $50 billion a year, consuming 1 in every 15 general fund dollars.”
Statistics are very hard to do on this, but the report finds that incarceration itself (as opposed to the arrest and conviction) reduces earnings and hours worked significantly. How? The likely mechanisms is detachment from the labor force and society at large, the social networks the person is likely to build are criminally active, the subsequent supervision sending people back as well as child support arrearages and other court payments that add up while out of the labor force.
They also mention that the formerly incarcerated “bear the indelible stigma of incarceration that ranks them low on any list of job candidates, and face a number of laws barring them from working in certain occupations. Finally, while some employers might be inclined to hire a former inmate, many are dissuaded from doing so by potential legal and financial liabilities”, something we discussed here with Illinois state licensing preventing former inmates from making inroads to basic service industry careers.
If we are concerned about stagnating wages, mobility and inequality then finding better ways of dealing with criminal justice and alternatives to incarceration is a connected and urgent part of the problem. Look at the demographics hit by increasing incarceration and then think about the demographics that have stagnant wages. I wish the labor economists would pay more attention to this.
The paper continues to discuss the impact on intergenerational mobility and earnings based on incarceration. I learned this disturbing fact: “1 in every 28 children in the United States—
more than 3.6 percent—now has a parent in jail or prison. Just 25 years ago, the figure was only 1 in 125. For black children, incarceration is an especially common family circumstance. More than 1 in 9 black children has a parent in prison or jail, a rate that has more than quadrupled in the past 25 years.” The obvious results are heartbreaking and speaks to a growing divide in our country based on things like a senseless and pointless “war” on drugs.
On Reintegrating Into the Labor Force
The paper also deals with something I’m thinking a lot about these days: how to reintegrate people back into the labor force. For them, it’s about those leaving prison. For me, it’s about those who have become permanently detached from the labor force and those who have ended up out of the labor force as a result of the Great Recession.
The authors provide a review of transitional work programs as well as limits on garnishments and creative ways to go about repaying debts to society and others (a huge factor in our balance sheet recession for out of the labor force workers). This was something new I learned: “A report by the Council of State Governments Justice Center, for example, found that 12 percent of probation revocations—returns to incarceration for violations—were due in part to a probationer’s failure to make required payments.” The same could be the de facto result of the credit card safety net, the bankruptcy reform bill and the underwater consumer balance sheet. There has to be a better way.