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Is this the beginning of the end for private prisons in the United States?

The U.S. Department of Justice announced on Thursday that it plans to reduce and ultimately eliminate its use of for-profit prisons.

A memo from Deputy Attorney General Sally Yates stated that the declining prison population ends its need for private prisons. She therefore instructed the Federal Bureau of Prisons not to renew contracts with them.

That news caused stocks in for-profit prison companies to tumble, MarketWatch reported. Shares of Corrections Corp. of America plummeted 35 percent and the value of GEO Group shares dropped 40 percent.

The two companies operate most of the prisons affected by the phase-out and benefitted during the government’s incarceration surge.

Yates said the federal prison population and the federal government’s use of private facilities peaked in 2013, when for-profit facilities housed 15 percent (almost 30,000 inmates) of federal prisoners.

In that year, she stated, the government began reforms, under the Smart on Crime Initiative, that included proportional sentences. As a result, the inmate population declined—from 220,000 in 2013 to 195,000 today.

Yates also pointed to a recent report from the department’s Inspector General that said private prisons fail to achieve an acceptable standard of safety and security, adding that they “compare poorly to our own Bureau facilities.”

Thursday’s announcement, however, will have a relatively small impact on the nation’s sprawling prison system. The Washington Post noted that this federal phase-out does not affect the for-profit prisons that have state contracts—where most of America’s inmates are housed. In fact, DOJ’s directive affects just 13 privately-operated prisons.

Think Progress said the for-profit prison companies’ biggest client is the Department of Homeland Security, which operates the Immigration and Customs Enforcement agency.

Still, prison reform advocates say this is a big deal.

“It is historic and groundbreaking. For the last 35 years, the use of private prisons in this country has crept ever upward, and this is a startling and major reversal of that trend, and one that we hope will be followed by others,” David Fathi, director of the ACLU National Prison Project, told The Post.

The problem many people have with the private prison industry is that it has a financial incentive to keep the prison population high and lobby lawmakers to keep a steady stream of new inmates coming into the system.

A 2015 University of Wisconsin study examined data from private prisons in Mississippi between 1996 and 2004.

Private prisons are paid for occupied beds, which is an incentive to extend inmates’ time in prison. Indeed, the study found that inmates in Mississippi’s for-profit prisons served as many as two to three more months behind bars than those housed in public prisons. The extra time amounted to about $3,000 per prisoner.

Prison administrators, the study found, used conduct violations to increase time served. Inmates in private prisons received twice as many infractions as those in public prisons.

According to the American Civil Liberties Union, the United States has just 5 percent of the world’s population, but warehouses more than 20 percent of the world’s prisoners. From 1978 to 2014, America’s prison population skyrocketed 408 percent.

SOURCE: Dept. of Justice, MarketWatch, Washington Post, Think Progress, University of Wisconsin | PHOTO CREDIT: Getty, Twitter

SEE ALSO:

Obama Commutes 348 Prison Sentences, The Most Of Any President In Recent History

Ending The School-To-Prison Pipeline

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