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Posted by on Jan 16, 2012 in Economy, Politics | 8 comments

Incarceration & Unemployment, Europe & the U.S.

Steve Roth wonders, how do incarceration rates affect unemployment numbers?

Europe has consistently higher unemployment than the U.S., but the U.S. has far and away the highest incarceration rate in the world — .75% of the population. (World Prison Population List [PDF], compiled since 1992 by Roy Walmsley of the International Centre for Prison Studies.)

Only Russia comes even close, at .63%. (Canada: .12%. Australia: .13%. China .18%. Germany .09%.) Our rate is four to eight times that of most other countries.

Prisoners aren’t part of the unemployment calculation. They’re not counted as part of the work force, and they’re not counted as unemployed. There are various arguments about whether that makes sense (feel free to comment), but if we include them in the calculations, what do unemployment rates look like? …

In 2008, all of the difference between EU15 and U.S. unemployment rates is accounted for by the prison population. The cynical view would say that we just imprison our unemployed, which doesn’t strike me as the most economically efficient arrangement.

You could fairly call me cynical.

KIND OF RELATED – The New Miss America’s Cause: Children of the Incarcerated. Laura Kaeppeler, Ms. Wisconsin, the newly crowned Miss America was one:

From her website:

  • Nationwide, more than two million children have a parent who is incarcerated in state or federal prison or local jail.
  • Children with imprisoned parents are almost six times more likely than their peers to become incarcerated at some point in their lives.
  • About one in 40 children have an incarcerated father.
  • More than ten million children have parents who were at one time imprisoned.
  • About one in 359 children have an incarcerated mother.
  • There is no one agency responsible for their welfare.
  • Anger, isolation, sadness, fear, anxiety and guilt are commonly experienced emotions for these children.
  • School failure, delinquency and intergenerational incarceration are common outcomes.
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  • adelinesdad

    Obviously our high incarceration rate is a problem, but I think this analysis is rather simplistic. It assumes that every person not incarcerated would add the number of unemployed. By that logic, every immigrant also adds to the unemployed. Or, every premature death lessens the unemployed. No doubt it would change the labor market to have less people locked up, but it’s not clear at all that all of the people locked up would be unemployed or displace other employed workers. That might be more true in a soft labor market, but the numbers here are from 2008.

    To his credit, Steve appears to recognize that his analysis is just a back-of-the-envelope calculation, not to be taken too seriously:

    Eyeballing the data, I do not think incarceration accounts for the (significantly larger) differences in previous years. (I would suggest that the additional difference is mostly the result of labor-market and other market rigidities imposed by unions and government regulation — not the result of redistribution. But that’s another post.)

    Although he neglects to consider that those other factors may still be at play in 2008, instead of just incarceration rates.

    ETA: However, the methodology of adding unemployment with incarceration rates may have some application in calculating unused resources.

  • merkin

    If the prison population was just a unused resource it would be bad enough but they are a considerable drain on society, costing us 30 to 40,000 dollars each to keep in prison, about what they would be paid in a middle class job.

    But doesn’t Keynes comes to our rescue because the majority of the money spent on prisons goes to salaries, meaning that the prison budget is mainly deficit spending to boost the economy, right? And to release the prisoners would depress the economy, actually adding to number of the unemployed.

    Also the US employs twice as many policemen per capita than the next country on the list, nearly four times the number of the average of the world’s countries. Presumably these excessive number of cops is one of the reasons we have so many people in the slammer. How much would it increase the unemployed if we had a more rational number of policemen?

  • Ah, Merkin, but many cities use the police to increase their general revenue through traffic tickets, meaning that they can avoid raising taxes as much. Now, if we count those extra policemen as tax collectors, do we really have too many?

  • Brewhouse Jack

    There is no inverse inflation-(un)employment relationship and there is no incarceration-(un)employment relationship.

    (Don’t task Washington also with reducing incarceration! No new Humphrey-Hawkins)

  • zephyr

    This is largely the fault of the so-called war on drugs (which would more accurately be called the war on black people) and we can thank Ronald Reagan for this, his most enduring legacy.

  • Rcoutme

    Although I deplore the quantity of people incarcerated (and especially those who are incarcerated to the detriment of society), I also understand why Americans decided to ‘get tough on crime’ in the late 1970’s and 1980’s. the movie, The French Connection, is a really good example of why the incarceration times needed to be extended. The civil war occurring in Mexico is proof positive that illegal drug use is not a victimless crime.

    So, what are the possible solutions? Anyone who has seen or read, Gone With the Wind, knows that criminals used to be ‘rented’ out to employers. The abuses of that system are also legendary (not just of the prisoners either). Chain gangs are coming back into vogue in spite of their checkered past. Revoltingly, the reason for the move to chain gangs is that they require fewer guards per prisoner.

    As for prisons creating jobs and the salaries being the main expense: merkin, have you heard of food, clothing, building repairs, transportation costs etc.? In addition, Keynes was never an advocate for having government incarcerate people in order to create jobs for wardens and guards. He was an advocate for government sponsored stimulus when there was no other entity capable or willing to get the economy moving. As he put it, why would we pay people to dig holes in the ground (for instance mining for gold–but having no economic use for the stuff) but not pay them to create a second rail line or road from London to Coventry? At least the latter could be used later on.

    Final thoughts: The United States has people who were either so obnoxious or so dissatisfied that they were kicked out of or left nearly every decent country in the world. It is unsurprising to me that we would, therefor, likely have a lot of dysfunctional people in our midst. Someone who is willing to undergo an arduous, dangerous, and likely very unpleasant journey to an unknown land, just to get out of the place where he is living, seems to me to be someone who is not easily satisfied. Such a person is also likely to convey such sentiments to his children.

    In the Bible, it used to be (early on) that ‘the sins of the father are meted out to the third generation’. When it comes to child abuse (violence type, not sexual), it has taken at least three generations for my family to rid itself of the problems (perhaps more depending on my nieces and nephews). Children who are beaten are likely to believe that such activities are part of life. We, as children, are constantly trying to learn how to live. We learn from experience. The same appears to be true of incarceration.

  • EEllis

    Comparing numbers when they are calculated in different ways by different people is silly. As to the specific issue with prisoners adding to the unemployment, people only count when they are actively looking for jobs thru a state agency or on unemployment. So it’s doubtful there would be any statistical difference.

  • The civil war occurring in Mexico is proof positive that illegal drug use is not a victimless crime.

    Do the judges buy it?

    BZZZZT!!!!! Nope!

    By making drugs so hard to get and dangerous to traffic, you increase it’s rarity. This makes it more expensive. This makes it more valuable to traffickers, who can reap so much in profit they can easily afford the firepower necessary to wage civil war in Mexico.

    Nothing would shut this down quicker* than the decriminalization of pot in the U.S. If it was available here, safely, there would be nothing* to traffic.

    * “quickness” is relative. People would still crave the harsher drugs like cocaine & heroine, so it wouldn’t stop overnight. But there would be a major culture shift in the U.S. and change would come.

    Now, a contrary (and more accurate) view is that drug use is not victimless crime because the harsher ones are so easily abused and lead to family disruptions, irresponsible & dangerous behavior, and loss of productivity. That’s why, IMO, we have to stop at marijuana and go no further. You can have a level of responsible use on-par with alcohol. Other drugs are far too debilitating far too fast and thus far too dangerous.

    But using drug violence as a reason to continue banning drugs is wrong. The 1920s taught us that.

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