We Can't Afford It:
Mass Incarceration and the Family Tax
Mass incarceration costs families with incarcerated loved ones $348 billion every year and locks generations out of the American dream.
For too long, the economic impact of America's high incarceration rate has been framed in terms of the $89 billion taxpayers spend on jails and prisons. But the true cost is far greater and falls most heavily on families already struggling to make ends meet.
New research from FWD.us shows that incarceration costs families nearly $350 billion each year, primarily in lost wages and increased out-of-pocket spending.
People with an incarcerated loved one spend almost $4,200 per year to support family members. This money goes towards things like staying in touch with their loved one, taking on additional childcare responsibilities for minor children, paying for essential items and traveling to visit them in prison. The incarceration crisis is systematically driving families into poverty and preventing them from climbing the economic ladder.
Mass incarceration isn't just a justice issue: it's a key driver of the affordability crisis and we simply can't afford it.
FOREWORD
Ashley Gantt
FWD.us, Advocacy and Campaigns Manager, Criminal Justice Reform
My grandfather's funeral was the first time I saw my dad in nearly a decade. I was 13. He walked in, flanked by two corrections officers, there for only a few minutes to pay his respects before he was gone back to prison again. As a child, my dad's presence was felt through the sacrifices my mom made to stretch her tight budget to help him in prison. From using her food stamps to buy food for a package she was sending him or asking family members for $20 here and there to send to him when she didn't have it.
The Financial Shock of Incarceration
When a loved one is incarcerated, families experience an immediate financial shock, potential lost wages, and a cascade of new expenses. This financial disruption forces impossible choices: paying rent or putting money on a prison commissary account? Buying groceries or traveling for a visit? Working more hours or being able to take on childcare responsibilities?
The financial shock of a family member's incarceration is a tax on love.
A family member's incarceration is an immediate shock to household income. It creates new expenses for everything from childcare to traveling long distances to visit family members in prison to predatory and exorbitant fees for emails and collect calls to stay in touch with loved ones at home.
Incarceration causes housing instability for families.
Having a loved one in prison has an immediate impact on a family's ability to afford housing. One in five family members are forced to move while a loved one is in prison, costing an average of $2,360 per move.
Families experience financial shock from lost wages.
Families lose $6.7 billion annually in wages that incarcerated people could have contributed to their household income. One in five family members with an incarcerated loved one also report their own income decreased—averaging $1,803 per month in lost earnings, nearly equivalent to the median U.S. mortgage payment.
The financial shock doesn't end when a loved one is released from prison or jail.
Families experience the greatest financial shock during their loved ones' incarceration, but they also bear the cost of supporting their family member's release and reentry. From picking them up from prison, to buying food and furniture, or helping them with transportation and communication needs, families provide critical financial support during reentry.
Out-of-Pocket Spending by Families
People with an immediate family member in prison spend nearly $4,200 annually to support them—more than one-quarter (27%) of income for someone living at the federal poverty line. These costs limit their ability to pay for stable housing, education, and other opportunities. Families shoulder these exorbitant costs to maintain contact, take care of minor children, and ensure their loved ones have essential items.
Adult children of incarcerated parents are the most likely of any family members to support an incarcerated loved one.
Eighty-six percent of adult children support their incarcerated parents. On average, they spend almost $5,500 per year, making it harder for them to invest in their own education, save to buy a house, or start their own family.
Keeping in touch with incarcerated loved ones is critically important.
Research shows maintaining family bonds is critical for reducing recidivism and supporting successful reentry. Yet staying connected comes at a steep price. Overall, families spend $1.8 billion annually traveling to visit loved ones in prison—an average of $1,703 per year for the 51% of family members that spend money to visit. Black family members are more likely than white family members to visit, paying an average of $2,256 per year.
Family members pay exorbitant costs to support incarcerated loved ones.
Families directly spend $5.6 billion annually on commissary, phone calls, and other basic necessities such as food, clothing, and toiletries—with markups reaching up to 600% above retail cost. Even medications and essential healthcare items must often be purchased by families when prison systems fail to provide adequate care.
Families must step up to care for the children who are left behind.
Family members spend $2.3 billion annually to care for the children of incarcerated parents, and these costs are often shouldered by grandparents living on fixed incomes or young adult siblings just starting their own lives. Among those with an incarcerated loved one who had minor children, nearly half took on childcare, costing $5,337/year.
Disproportionate Impact on Black and Low-Income Families
Our incarceration crisis is taking money out of the pockets of the families that can least afford it. Black family members pay 2.5x more ($8,005) than white family members ($3,251) annually to support incarcerated loved ones. Our high incarceration rate is clearly one of the chief drivers of intergenerational poverty and the racial wealth gap.
The cost to support incarcerated family members perpetuates racial wealth disparities.
The stark difference in costs reflects multiple inequities: Black people are twice as likely to have multiple family members incarcerated (50% compared to 25% of white respondents) and 4x more likely to have two family members incarcerated simultaneously. Hispanic and Native American people are also spending nearly twice as much as white family members. These disparities create a vicious cycle that perpetuates poverty across generations.
Low-income families make extraordinary sacrifices to support incarcerated loved ones.
People earning less than $25,000 per year spend a much higher percentage of their income to stay in touch with and support family members in prison and are more likely to experience housing instability, with nearly one-third forced to move during their loved one's incarceration compared to just 10% of high-income families.
Lifetime Impacts of Incarceration
The financial impact of incarceration extends beyond a prison sentence. Families experience reduced earnings long after their loved ones return home. The lifetime costs are staggering—$326 billion in annual lost earnings that could have helped families climb the economic ladder.
Going to prison reduces a person's lifetime earning potential.
Formerly incarcerated people experience reduced earnings of $111 billion annually. With unemployment rates nearly five times the general population, even a short period of incarceration is devastating financially.
Children of incarcerated parents suffer dramatic economic consequences.
They lose $215 billion in reduced earnings every year of their professional lifespan. This loss is the direct result of having their lives upended during critical years of bonding, development and education. The trauma, instability, and stigma of parental incarceration create barriers to opportunity that persist across generations.
The long-term losses limit economic growth of entire communities.
Just maintaining today's incarceration rate will cost American families $3.5 trillion over the next decade and any policy that lengthens prison sentences will take even more money out of the economy.