Executive Summary

To the surprise of many, the 13th Amendment to the U.S. Constitution includes an exception to the abolition of slavery and involuntary servitude for criminal punishment. This “punishment clause” allows hundreds of thousands of incarcerated people to be forced to work for little to no pay — a central characteristic of enslavement — today. This study documents the fiscal costs and benefits of ending slavery and involuntary servitude in prisons and mandating fair wages for incarcerated workers. As this study shows, doing so will benefit not only incarcerated workers, but also their families, victims, and ultimately, society at large.

Today, roughly 800,000 incarcerated people are forced to work for little — generally less than one dollar per hour — to no pay in federal and state prisons. About 80% are employed in facility maintenance and operations, with most of the remainder, or about 17%, employed in governmentrun businesses and public projects, and just 3% in private sector jobs. Given the low wages, these jobs are often designed to keep people busy rather than convey marketable employment skills. Yet, under the current system it is possible for incarcerated people who refuse to work to be denied family calls and visits, put in solitary confinement, and denied parole.

This study assumes that after abolishing slavery and involuntary servitude, legislators will pass additional laws establishing the labor rights of incarceration, namely wage laws. Ending slavery and involuntary servitude and paying incarcerated workers fair wages is expected to change the job composition to reflect 60% of jobs in facility operations and maintenance at minimum wage, 20% in government-run businesses and public projects at prevailing wages, and 20% in the private sector also at prevailing wages. This study anticipates that the marginal fiscal costs to governments and taxpayers of this policy change, factoring in wages and other payroll costs, is between $8.5 billion to $14.5 billion per year.

These new costs would be money very well invested, as the fiscal and social benefits of ending slavery and involuntary servitude and paying incarcerated workers a fair wage will far outstrip them. These new benefits from paying incarcerated workers will take time to develop fully. This study anticipates that once the adjustments to paying incarcerated workers are achieved the total fiscal benefits to incarcerated workers, their families and children, crime victims, and society at large is between $26.8 billion and $34.7 billion per year, or a net benefit of $18.3 billion and $20.3 billion per year, implying benefit cost ratios between 2.40 and 3.16.

More specifically, this study projects the following benefits:

• Impact on Incarcerated Workers: Incarcerated workers will directly benefit from between $11.6 billion and $18.8 billion in annual income, compared to the estimated $847 million they earn today. They will be able to meet their own basic food, hygiene, and communication needs. The valuable work experience they receive will also translate into a present value of $11.3 billion to $11.7 billion per year in additional earnings based on increased employment and earnings expectations after release.

• Impact on Families and Children: Families and children will save the money they spend supporting their incarcerated loved ones, as well as receive additional financial support, through child support payments and other income, to the tune of $4.5 billion to $5.8 billion per year.

• Impact on Crime Victims: The most significant impact on victims of crime will be incarcerated workers’ increased ability to pay restitution, estimated here to be $89 million per year for robberies.

• Impact on Governments and Taxpayers: The federal and state governments and taxpayers will receive tax payments between $1.5 billion and $3.2 billion per year and between $308 million and $431 million per year in payments to the welfare system through child support payments from incarcerated workers. They will also receive $2.1 billion per year in additional tax payments after their release based on increased employment and earnings expectations. Finally, they are estimated to benefit from a 5% reduction in the recidivism and reincarceration rates of incarcerated workers, which will save $1.3 billion in annual incarceration costs in just the short run and $3.7 billion in annual crime costs for the U.S. economy.

This study also measures the lifetime benefits, in present value, from the first ten years after ending slavery and involuntary servitude in prisons and paying incarcerated workers a fair wage, and finds that the net fiscal benefits to incarcerated workers, their families and children, crime victims, and society at large is between $171.3 billion and $189.6 billion over the first ten years after this policy is implemented.

This study projects that while society overall will benefit from abolishing slavery and involuntary servitude in prison, and from paying fair wages for prison labor, those gains will fall disproportionately to groups and communities that have been most impacted by mass incarceration, specifically Black and Brown people, low-income people, and women.

Finally, while this study focuses on the quantifiable fiscal benefits of prohibiting slavery and involuntary servitude as criminal punishment and paying incarcerated workers fair wages, it is important to note that there are many other benefits that are difficult to quantify or for which there is little economic data but are as important as the specific ones outlined above — many which could broadly change society. Some of these benefits omitted from the fiscal analysis in this study include:

• The increased physical and mental health of incarcerated people, and associated costs, from a recognition of their humanity and dignity with the granting of the basic human right to be protected from slavery and the ability to meet one’s own basic needs.

• The increased physical and mental health of incarcerated people and corrections officers, and associated costs, from the reduced reliance on informal “hustles” and increased connection with 4 | Edgeworth Economics loved ones that together lower related violence and victimization in prisons.

• The increased physical and mental health of incarcerated workers and their families and children, and associated costs, from reduced financial stress, reduced poverty, and increased connection, during and after incarceration.

• The financial relief for families and children of communication costs beyond just phone calls, namely video calls and electronic messages.

• The increased economic mobility, and related physical and mental health, of incarcerated workers and their families and children stemming from increases in earnings during and after release that can have generational impacts.

• The increased payment of fines and fees to governments.

• The increased payment of local taxes during and after incarceration. • The reduced financial burden of formerly incarcerated workers on government welfare programs in retirement.

Read full report here.