Private-Prison Market Sees Surge in Stock Prices

NASHVILLE, Tenn. — The private-prison market has seen a major surge in stock prices since Donald Trump won the presidential election last week. When the stock market closed last Wednesday, the largest private-prison contractor, CoreCivic, based in Nashville — previously known as Corrections Corporation of America — saw its stock increase by 43 percent, while stocks for GEO Group, the second-largest contractor, rose by more than 21 percent.

This is a major turnaround for the private-prison industry, which saw stock plummets after the Obama administration announced earlier this year that it was weeding out the use of private contractors for Bureau of Prisons facilities. That decision was in response to a report by the Justice Department’s Officer of the Inspector General that said privatized prison facilities cause security issues and didn’t necessarily save taxpayers money. At that same time, the Department of Homeland Security Secretary Jeh Johnson recommended that Immigration and Customs Enforcement also rethink its use of private prison contractors, which are currently responsible for about two-thirds of immigrant detention beds, reported The Huffington Post.

Now that Trump has been elected, investors are betting on his policies to change the market. Trump’s campaign emphasized cracking down on immigration, and as of Sunday, he said that he intends to deport or incarcerate as many as 3 million undocumented immigrants when he takes office, according to MarketWatch. If this happens, the private-prison population could increase by hundreds of thousands of inmates and even require at least nine new federal prisons, Carl Takei, a staff attorney for the American Civil Liberties Union’s National Prison Project, told CityLab.

While the stock market suggests that private prisons may, in fact, expand, criminal justice reforms are still moving forward in individual states. For instance, ballot measures to decrease state prison populations in California and Oklahoma passed last week. Only time will tell how Trump’s policies will affect the private-prison market.