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Prison economics. Part II

Following my previous article on the issue of a huge incarceration rates in the US. Let me clarify that I am not trying to defend or justify the imprisoned. The only thing that interests me is the economics behind the crimes/prisons.

Earlier in the year, President Obama signed the amnesty for illegal aliens that would forgive undocumented people and as a result award them with legal status (Green Card). This in turn will benefit 12 to 20 million undocumented persons currently being in the US. Looks like the authorities accounted that it is more beneficial as for the state budget in terms of extra taxes to be paid by the new legal aliens (up to 20 mln!), so for the illegal immigrants as well. In 1986 through Immigration and Reform Control Act (IRCA) was the first and only amnesty for a large group of people. Back then it was 2.8 million undocumented aliens.



Just imagine the benefits to the state budget from this act. First of all there is no more need to pay $160 per imprisoned person every day from the budget. Second of all, legalized workers actually will bring benefits to the common pocket. For whom this act may not benefit probably only private prisons. Yes, there are private prisons in the US. UNICOR is US government corporation that uses penal labor to produce goods and services. They produce clothing & textiles, office furniture, industrial products & storage, electronics & components, electronics recycling, solar & renewable energy! And this is all with the help of very cheap labor. One can guess how profitable/not profitable this business is. Moreover, under the US laws and regulation, federal agencies are required to purchase products offered by UNICOR. About 17% of prisoners are employed by UNICOR and reduction of the number of employees may hurt this type of business, but the benefits to the society brought by the amnesty are much greater.


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