The US Border Crisis is Giving Private Prisons a Boost

Originally Published April 28th, 2020

In 2016, private prison stock prices are plunging. Plagued by controversies, policymakers have finally stepped up to end the practice. Prison activists who advocated against for-profit prisons are on the brink of success.

Then Donald Trump entered the picture. Almost overnight, the private prison industry made a full comeback. Private prison stocks rebounded and have been at its highest in years.

But what caused this dramatic turnaround?

Trump’s hardline policies on immigration, that’s what.

Migrants from neighboring countries regularly seek asylum in US borders. Before the Trump administration, most people who are caught illegally crossing the border are not detained. Instead, they are shackled with ankle monitors and given access to legal representation.

But with a stricter stance on immigration, more and more migrants are detained in US private prisons. In fact, they have become the country’s default detention centers for illegal immigrants.

These detained migrants have become the private prison’s new cash cows. To fully understand how this works, let’s first look at how private prisons earn income.


Private prisons were founded back when the country’s drug problem was on the rise. In the 80s, many Americans are getting locked up due to drug charges. As a result, prisons and jails across the country were struggling with overpopulation.

With cramped cells came an onslaught of other problems which led to violent riots. This prompted the government to privatize the country’s prison facilities. They believed that it will not only decongest prisons but will also save money for the government.

Under this arrangement, the government will pay private prisons for every inmate they take in. It’s estimated that they can charge up to $150 per inmate per day. In return, they will provide accommodation, security, food and other things necessary for the welfare of the prisoner.

But will the government agree to such terms?

As long as it’s cheaper than what the government would spend if the prisons are publicly run, they will. Say, the government estimates the upkeep of prisons at $200 per inmate per day. If they delegate this to private prison companies, they’d be able to save $50 per day per inmate.

With over a million inmates spending years behind bars, the government can save millions of dollars per year. On paper, these all sound great. If only private prison companies kept their end of the bargain.

Since it’s a business enterprise, private prisons are keener on making money than rehabilitating inmates. They cut costs by understaffing prisons and, providing poor facilities and medical treatments. They are also accused of lobbying for harsher punishments to increase income.

Their low-cost, high-profit approach often leads to jailbreaks and violent riots. Studies show that assaults in private prisons are double than those in public facilities. A report also disclosed that the latter tend to be a lot safer than their private counterparts.

US border crisis private prison


During his campaign, Trump had been very vocal about his planned crackdown on illegal immigrants. In fact, many believe that it was a major contributing factor to his victory.

When he was elected, he kept true to his promise. In 2017, he signed the executive order “Enhancing Public Safety in the Interior of the United States“. This tougher measure on immigration targets all undocumented immigrants for deportation even those with no criminal records. It also directed state and federal police to enforce immigration laws more seriously.

The directive also triggered a chain of events that made it possible for illegal immigrants to be detained indefinitely. The first was Attorney General William Barr’s reversal of a decision that allows eligible asylum-seekers to request a bond from the judges. Then in July 2019, the DHS ramped up its application for expedited removal. This resulted in thousands of immigrants getting deported without a hearing from an immigration judge.

These hardline immigration policies saw about 54,344 immigrants being held in detention centers as of 2019. More than three-fourths of which are in private prisons. Many of them died during detention.

Since 2017, about 27 immigrants have died while in custody. A government investigation revealed that this is due in part to the “unhealthy and unsanitary” conditions in private prisons. Despite these, private prisons continue to rake in profits from Trump’s immigration policies.


A 2018 investigative report by The Daily Beast disclosed that for-profit immigration detention is almost a billion-dollar industry. But due to government secrecy, the exact numbers are impossible to determine.

But available documents show that the ICE paid more than $800 million to private prison companies in 2018 alone. In an interview, an industry leader also disclosed that they expect their profits to grow to $2.3 billion by 2019. With several private prison companies in operation, these give us an idea of how much they earn from locking people up. Most of these companies have made large contributions to Trump’s campaign and inaugural.


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Judy Ponio an author for GlobalTel


Judy Ponio is a firm believer in the power of sharing knowledge. Having extensive experience in the prison industry, she wants to share what she knows with the world. Judy also loves to write about political and legal topics.