Broken Promises

1
Broken Promises

• The Economics of a Prison Town
• Matilda Alexander
• B. Commerce, B. Law (Hons), G. Dip. Leg Prac

2
Background to the Prison

• 4000 bed prison precinct
• Largest prison in Australia
• First prison town
• Parallels can be drawn with American prison
  policy of the 1990s the rural prison boom.

3
Promises in America

• Prisons not only stabilize a local economy but
  can in fact rejuvenate it. There are no seasonal
  fluctuations, it is a non-polluting industry, and
  in many circumstances it is virtually invisible
  Youve got people that are working there and
  spending their money there, so now these
  communities are able to have a Little League and
  all the kinds of activities that people want.
  California Department of Corrections, 1994.

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(No Transcript)
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Promises in Australia

• Potential for substantial economic benefit
• Increased employment opportunities
• Development of new businesses
• Expansion of ancillary and associated industries
• Improvement and expansion of existing
  recreational, educational and community services
• Crime rate would not increase
• Increased demand for housing
• Increased disposable income of local residents
• There is no data to prove that prisoners and
  their families will continue to live in the area
  after they are released
• Department of Corrective Services Queensland,
  2006

6
Economic Analysis of Prison Towns in America

• A review of the research suggests that earlier
  studies assumed or projected economic development
  but that more recent work focus on specific
  economic impacts. Researchers approach the
  problems from both case study and data driven
  research designs. Both techniques are producing
  similar conclusions. Prisons generally appear to
  have a negligible, or perhaps negative, impact on
  economic development in rural communities.
  Deborah Tottle, PHD 2004
• In conclusion, the economic impacts of the
  prison development boom on persistently poor
  rural places, and rural places in general, appear
  to have been rather limited. Professor Glasmeier
  and Farrigan, Uni of Pennsylvania 2002.
• Increasing evidence suggests that by many
  measures prisons do not produce economic growth
  for local economies and can, over the long term,
  have detrimental effects on the social fabric and
  environment of rural communities. Tracey
  Huling, Criminologist 2002

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• Results of this analysis of prisons sitting in
  rural counties in New York State since 1982
  indicates that reliance upon a prison as a means
  of economic development is short sighted and not
  providing any long-term growth. Moreover, once a
  town hosts a prison and becomes known as a
  prison town, discussion of other means of
  economic development is likely to evaporate.
  Potential host counties need to be particularly
  wary of viewing a prison as the panacea for their
  economic woes. Although the pitch may be
  enticing, the results indicate that there is
  little substance behind these claims. There is a
  high likelihood that these counties could be
  closing themselves off to other options of
  sustainable development. King, Mauer and
  Huling, 2003.
• Prisons are not very good economic development
  strategies because they generate few linkages to
  the economy, failing to attract significant
  numbers of associated industries. Prof Thomas
  Johnson, Uni of Missouri
• Since the prison opening in 1991, overall Johnson
  County unemployment rate has increased
  significantlyThis is because the prison industry
  does not produce the "multiplier effect" of
  spin-off economic activity like agriculture,
  health care, light manufacturing and other types
  of sustainable development.

8
Further Impact Analysis of Prison Towns in America

• The impact of prisons on housing can also cause
  economic hardships for the poor and elderly in
  rural communities.
• Prisoners themselves may also displace low-wage
  workers in struggling rural areas.
• The hidden costs of doing prison business can
  be high for small communities. Local court and
  police systems are often the first to feel the
  impact.
• Though boosters claim that prisons are recession
  proof, in fact they are subject to downturns in
  the economy and expected booms can change to
  busts for small towns.
• Prisons can also discourage other kinds of
  economic development.
• The rural prison boom during the decade of the
  1990s occurred at a time of falling crime rates
  and experience shows that the federal and state
  governments are reluctant to pull the plug on the
  many interests that now lobby for and feed off
  prisons. Allowed to continue, this cycle will
  have catastrophic consequences for the health and
  welfare of individuals, families and communities
  in urban and rural areas. Tracy Huling,
  Criminologist

9
Political changes in America

• Move away from increased incarceration rates for
  the following reasons
• Community safety
• Economics
• Social impact on local communities
• Public opinion.

10

• EG California, in 2000, the independent
  Legislative Analyst's Office (LAO) predicted that
  a proposition aiming to treat rather than
  incarcerate low level drug offenders would save
  California taxpayers approximately 1.5 billion
  over five years and prevent the need for a new
  prison slated for construction, avoiding an
  expenditure of approximately 500 million.

11
Conclusion

• The economic impact of creating Australias first
  prison town is largely unknown. However,
  evidence can be drawn from the impact studies
  where such ventures have been attempted overseas,
  primarily in America. When compiling these
  studies it can clearly be seen that the promised
  pitches of politicians and bureaucrats can not be
  relied upon and that the people of Warwick should
  exercise caution before taking the step down this
  path.

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State INCorrections Network

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• Queensland Australia 4101