BlackRock: Fix your private prison problem

BlackRock

BlackRock should require its private prison companies to improve their safety and reduce recidivism, and divest from those that lag behind.

Private, for-profit prisons are low on oversight and safety [1], are rife with instances of abuse [2] and lack transparency or accountability, even though almost all of their revenue is obtained from government contracts paid with taxpayer funds. [3]

BlackRock is a large investor in private prisons, and it has increased its holdings over the last two years, even as private prisons have been involved in separation of immigrant families. [4][5] But private prisons are actually detrimental to BlackRock's long-term financial outlook because it is invested in all sectors of the economy.

Because prisons take potential workers away from jobs that can grow the economy, a large prison population is detrimental to economic growth. [6] Since private prisons make money based on the number of inmate imprisoned in their facilities, they are incentivized to promote mass incarceration rather than rehabilitation and lowering recidivism. [7] This incentive has played out through prison companies lobbying and political spending activities [8], increasing the prison population, and hurting BlackRock.

As a major investor in private prisons, it is incumbent on BlackRock to take concrete steps to ensure that the prison companies it invests in meet higher safety and transparency standards and implement rehabilitation and anti-recidivism programs to reverse the damage of mass incarceration, and divest from those companies that do not comply.

[1] https://www.theguardian.com/us-news/2016/aug/12/private-federal-prisons-more-dangerous-justice-department

[2] https://www.nytimes.com/2018/04/03/us/mississippi-private-prison-abuse.html

[3] https://www.prisonlegalnews.org/news/2015/jul/31/who-owns-private-prison-stock/

[4] http://populardemocracy.org/sites/default/files/20180427%20CBOH%20Digital.pdf

[5] http://inthesetimes.com/article/21234/private-prison-trump-family-separation-immigration-ice

[6] http://fortune.com/2016/04/23/criminal-justice-policies-economy/

[7] https://www.brookings.edu/research/the-economics-of-private-prisons/

[8] http://ses.wsu.edu/wp-content/uploads/2017/09/How-Private-Prisons-Affect-Incarceration-Likelihood-3.0.pdf