Financial Incentives

Financial incentives drive the continuation and expansion of our immigration detention system

Image credit: Steve Pavey

Financial incentives are endemic to our current immigration detention system. Local governments detain immigrants in exchange for huge sums of money to fill gaps in shrinking local budgets. Private prison companies run entire facilities. Other private companies provide a myriad of services inside the facilities. At every turn, there are clear incentives to detain more people while always reducing per-person costs—a combination that has helped create a sprawling and unaccountable system of mass detention.

Private prison companies are one of the biggest beneficiaries of the current immigration detention system. The best-known companies are The GEO Group, Inc. (GEO) and Corrections Corporation of America (CCA), although there are a handful of other smaller companies as well. Together they administer—and profit from—62 percent of detention beds. This is a significant expansion in five short years; in 2009 they operated 49 percent of detention beds. In fact, as the entire system has expanded, private prison companies have consolidated their dominance.

For years, some of these companies—most successfully GEO—have further entrenched their profits by negotiating guaranteed minimums, or local quotas, into their contracts. For more information about this form of corporate welfare, see Detention Quotas.

Other private companies, though less well known, also make significant profits each year off immigration detention. They provide medical, transportation, security, food and other services within the facilities. Often, there are layers of contracting between the federal government and these service providers, making them even more difficult to track or hold accountable.

Although the profit motive of private companies has garnered more attention, the corrupting financial incentives for local governments are no less worrying. After receiving a federal contract, some local governments in turn subcontract the facility to a private prison company, perpetuating the cycles described above.

Other local governments see the detention centers as an important source of jobs in struggling rural towns. This is despite the fact that detained people actually perform much of the work inside detention facilities through exploitative work programs in order to keep costs down.

Overall, the pervasive influence of financial incentives for both private companies and local governments has had a disastrous effect. It both feeds and further entrenches an unjust system. Worse, it views immigrants primarily as sources of income rather human beings, paving the way for other abuses.


Learn More About Financial Incentives