As the United States presidential election has come into full swing, mass incarceration and the state of the prison-industrial complex has become a topic of national concern. The issue has risen into the forefront of the American conscience in result from various forms of public critique. From writers, like Michelle Alexander and Ta-Nehisi Coates, who have described the ways in which people of color have suffered from the era of mass incarceration. To television shows, like Orange is The New Black (produced by Netflix
Private prison providers have become uniquely positioned within the private and public sectors, and have leveraged this position to have significant lobbying power within the U.S. political system; a phenomenon which has since been defined as the prison industrial complex. The existence of the prison industrial complex, coupled with the aforementioned concerns has led to a dramatic shift in public sentiment and public policy. Institutional investors have been pressured by their constituents to divest from private prison holdings, protesters gathered outside of an Whole Foods Market in Texas, demanding the company cease their labor contract with a private prison program, and a mere few months ago, President Obama announced the release of a little over 6,000 prisoners from federal prison.
The uncertainty regarding both the political and economic landscape in the U.S. has produced a radically different environment for the private prison industry. Swift changes in policy demonstrate the political threat which is currently imposed upon the industry. Greater political focus on remedying the state of incarceration in the United States through changes in policy will have direct ramifications on the rate of imprisonment in the U.S., and the ability of private prison providers to win public contracts. Economically, private prison providers have benefited from low interest rates, borrowing at a low cost of capital in order to develop new prison facilities. However, all good things must come to an end, and as interest rates rise, the debt structure of each of these companies will be critical for continued operational efficiency. In turn, the future performance of the private prison industry is heavily dependent upon business as usual within U.S. politics, however, if this presidential election can be described as anything, it is not business as usual.
Sources
- http://www.npr.org/sections/thetwo-way/2015/11/01/453564956/what-you-should-know-about-the-federal-inmate-release
- http://www.motherjones.com/politics/2008/07/what-do-prisoners-make-victorias-secret
- https://ycharts.com/companies/GEO/debt_equity_ratio
- http://www.nbcnews.com/business/business-news/whole-foods-drop-products-made-inmates-prison-labor-program-n436821
- http://www.marketwatch.com/investing/stock/CXW/financials
- http://www.marketwatch.com/investing/stock/GEO/financials
- https://en.wikipedia.org/wiki/2010_Arizona_prison_escape
- https://en.wikipedia.org/wiki/War_on_Drugs