Prisons do make money, and quite a lot of it. Incarceration in the United States moves tens of billions of dollars a year through a mix of government contracts, incarcerated labor, vendor fees, and cost-recovery charges imposed on prisoners and their families. Some of that money becomes shareholder profit at publicly traded corporations. Some offsets government budgets. Some flows to private vendors operating inside public facilities. And a significant share is extracted directly from the people being held and the relatives trying to support them.
Private Prison Companies and Their Government Contracts
The most visible profiteers are the private prison corporations. GEO Group and CoreCivic are publicly traded companies that contract with federal, state, and local governments to run detention facilities. CoreCivic alone reported $2.2 billion in total revenue for 2025, a 13% jump from the prior year.1CoreCivic. CoreCivic Reports Fourth Quarter and Full Year 2025 Financial Results Their share of the overall prison population is smaller than their profile suggests: roughly 91,000 people, about 8% of the total, were held in private state and federal prisons as of 2022.
The core business model is the per-diem rate, a fixed daily payment for each person housed. Rates swing widely by security level, location, and services provided. A rural county jail contract might sit around $60 per day, while specialized immigration and high-security facilities can command several hundred dollars per person per day. The company keeps whatever margin remains between actual operating costs and the per-diem.
What makes these contracts especially attractive is the minimum occupancy guarantee. Many require the government to pay for 90% or even 100% of beds regardless of how many are actually filled. If the population drops, taxpayers still pay. Contracts often lock in for years or decades, which turns incarceration into unusually predictable cash flow. That predictability is what draws Wall Street.
Investors, Tax Structures, and Who Else Benefits
GEO Group converted to a Real Estate Investment Trust in 2012, a tax classification that largely eliminates corporate income tax as long as the company distributes at least 90% of taxable income to shareholders. GEO reported nearly $44 million in tax benefits from that structure in a single year. CoreCivic used the same REIT structure starting in 2013 but reverted to a standard taxable corporation effective January 1, 2021.2CoreCivic. CoreCivic Annual Report Form 10-K
Ownership is broader than most people realize. Vanguard, Fidelity, BlackRock, and iShares all appear among the largest institutional holders of GEO Group and CoreCivic stock. Anyone with a retirement account in a broad index fund likely holds an indirect stake in private prison revenue without ever choosing to.
Revenue From Incarcerated Labor
Prisons also make money by producing goods and services with the labor of the people they hold. Federal Prison Industries, which operates as UNICOR, is a government-owned corporation employing about 12,000 incarcerated workers across dozens of factories in more than 80 supply categories.3UNICOR. UNICOR Home Page UNICOR describes itself as a “self-sustaining Government corporation” selling “market-priced services and quality goods made by inmates.”4Federal Bureau of Prisons. UNICOR State systems run parallel programs producing license plates, road signs, furniture, and agricultural goods, mostly for government buyers.
The math works because wages are extraordinarily low. Regular federal prison jobs pay between $0.12 and $0.40 per hour.5Federal Bureau of Prisons. Work Programs UNICOR positions pay somewhat more but still well under a dollar an hour for most workers. The federal minimum wage in 2026 remains $7.25 per hour.6U.S. Department of Labor. State Minimum Wage Laws The surplus between what these goods sell for and what the labor costs gets reinvested into correctional budgets and new equipment.
The Prison Industry Enhancement Certification Program lets private companies employ incarcerated workers directly for commercial production. On paper, PIECP requires the prevailing local wage or at least the applicable minimum wage. In practice, up to 80% of gross wages can be withheld for taxes, room and board, family support, and victim compensation funds. The victim compensation deduction alone runs 5% to 20% of gross pay.7U.S. Department of Justice. Prison Industry Enhancement Certification Program (PIECP) Compliance Guide A $10-per-hour paycheck can turn into $2 in the worker’s hand.
Phone Calls, Video Visits, and Tablet Fees
Communications has been one of the most reliably profitable revenue streams. Telecom providers win exclusive contracts to serve a facility, charge rates far above what a free-world consumer pays, and share a cut with the facility. The FCC has described these payments, known as site commissions, as “a division of locational monopoly profit,” noting that contracts are frequently awarded based on which provider offers the biggest revenue share.8Federal Register. Rates for Interstate Inmate Calling Services
That is changing. The Martha Wright-Reed Just and Reasonable Communications Act gave the FCC authority to regulate all prison and jail communication rates. Interim caps take effect April 6, 2026, setting video call rates at $0.23 per minute for prisons and between $0.17 and $0.42 per minute for jails, with providers permitted to add up to $0.02 per minute for facility costs. Traditional site commission payments are prohibited under the current temporary rules.9Federal Register. Implementation of the Martha Wright-Reed Act – Rates for Incarcerated Peoples Communication Services
Tablets have opened a newer channel. Facilities issue tablets through vendors that charge per transaction: roughly $0.47 per email sent, $1.99 per song downloaded, and $0.06 per minute for calls. The tablets are often provided to the facility at no cost, because the vendor’s revenue comes from every tap.
Commissary, Money Transfers, and Fees on Prisoners
Commissaries sell food, hygiene items, and small electronics at heavy markups. Reports put those markups at 20% on basic goods and over 600% on some specialty items. A small number of large vendors dominate the market, and facilities frequently collect commissions on sales. Since commissary is often the only source of items beyond bare-minimum issue, the markup functions as a captive tax.
Getting money to an incarcerated person costs money too. Families using electronic transfer services pay an average fee of roughly 19% on a $20 deposit, with fees passing 30% in some states. Most facilities work with a single transfer provider such as JPay or Access Corrections, so families have no competitive alternative.
On top of that sit administrative fees:
- Medical co-pays of $2 to $10 per healthcare visit.
- Pay-to-stay charges of $50 to over $150 per day in some jurisdictions, often collected as debt after release.
- Booking and processing fees imposed at intake regardless of ability to pay.
Each fee looks small on its own. Together they can leave someone thousands of dollars in the hole by the time they walk out.
How Public Prisons Generate Revenue
Most incarcerated people are held in publicly operated facilities funded through legislative appropriations. The Federal Bureau of Prisons requested approximately $8.75 billion in salaries and expenses for fiscal year 2026.10Department of Justice. BOP FY 2026 Congressional Justification Exhibits State corrections budgets add tens of billions more, and total public spending on incarceration exceeds $80 billion a year.
Public facilities don’t produce shareholder returns, but they do pursue cost recovery. Courts impose fines and restitution at sentencing, and portions of that money flow back into corrections budgets. Many states authorize garnishing wages earned in work-release or external employment, sometimes taking up to half of gross earnings to cover incarceration costs.
Private vendors also earn billions inside public prisons. Healthcare, food service, and transportation are routinely contracted out. Three companies hold roughly three-quarters of the prison food service market. Vendors win contracts by promising a lower per-plate cost than the facility could achieve in-house, then profit on the gap between contract price and actual cost. Complaints about small portions and expired food are a recurring feature of that arrangement.
Electronic Monitoring and Community Supervision
The revenue stream continues after release. The global electronic monitoring market is estimated at $2.35 billion in 2026 and growing at nearly 8% per year. GPS ankle bracelets, alcohol-detection devices, and smartphone-based check-in apps are used for pretrial release, probation, and parole. In many jurisdictions, the person wearing the monitor pays for it. Monthly fees typically run $100 to $400, and a missed payment can trigger a technical violation that sends someone back to jail.
Privatized probation follows the same pattern. Supervision companies charge monthly administrative fees of roughly $20 to $60 directly to the people they monitor. Unpaid balances can become grounds for revocation.
The Long Tail of Carceral Debt
None of these fees disappear at release. Unpaid criminal justice debt follows people into their post-prison lives. The federal Treasury Offset Program seizes income tax refunds and applies them to outstanding balances. Multiple states let criminal justice debt be converted into civil judgments, reported to credit bureaus, and collected the way any other creditor would pursue an unpaid loan.
At least eight states suspend driver’s licenses for missed criminal justice debt payments. A suspended license makes it harder to work, which makes it harder to pay, which can produce new charges for driving on a suspended license. Every step in that loop generates revenue: the original fine, late fees, collection commissions, reinstatement charges, and potentially the cost of re-incarceration. Someone who never quite clears their debt is, financially speaking, more valuable to the system than someone who pays it off and leaves.