Incarceration as a labor market outcome

Speaking ‘as a libertarian’, I think you might well be right on this point. One can’t easily split up economic choices along moralised lines and attempting to do so is usually what get conservatives (and conservative leaning libertarians) in rather a muddle: “Rich people need incentives, poor people are just lazy!”

Bruce Western is the go-to guy on this. This paper with Katherine Beckett — How Unregulated Is the U.S. Labor Market? The Penal System as a Labor Market Institution — is an early statement of the view. I’ve written here in the past about some of his subsequent work with Becky Pettit on the role of the penal system in the lives of unskilled (especially unskilled, black) young men.

I wouldn’t consider a person in prison for possession for personal use to be there because of a labour market failure.

I’m not sure, but I think we’d have to distinguish people in prison (as opposed to jail) for simple possession versus those there for petty dealing, which would seem more in line with JQ’s thesis. Anybody know the numbers here?

I’m obviously under-informed here, but aren’t incarcerated individuals unemployed by definition? They’re not working, regardless of the reason(s) WHY they’re not working…

Sure, but that’s not enough to show that it’s relevant for discussing the strength of US labor market regulations versus European labor market regulations. The fact that it’s a causal consequence of those regimes is.

Re: John’s question @6

I can’t give you hard data, only personal observations. Although “dealer” and “user” might seem to be distinct categories, and US law treats them as such, reality is much fuzzier. Consider a crack addict lacking crack and any money to purchase crack. He is approached by a would-be user asking if there’s any crack to be had. Our addict says yes and steers the other user to a seller in return for the promise of a hit off the pipe. Our addict, having facilitated a sale is legally culpable to the same degree as the actual seller. Determinate sentencing sends our “cluck” off to prison for a long time.

In Washington state, where I practice law, the sale of “bunk” (fake drugs) is punished just as if actual drugs were sold. The sale of bunk is another tactic used by poor addicts to get drugs. Once again, “user” and “dealer” are conflated.

Several years ago the prosecutor in our county finally agreed to allow clucks to plead to a reduced charges in some circumstances thus avoiding harsh determinate sentences. I’m convinced the policy change came about only due to county budget problems and not any sense of fairness. This change was too late for a client of mine who served 8.5 years for steering an undercover cop to a single $20 rock. The client had two prior sales of bunk so he was treated as a recidivist dealer. When sentenced he had gotten clean and was employed as a store clerk. Didn’t matter.

The US prisons are full of people doing long sentences because they are screw ups who keep screwing up. The level of criminality might not escalate but the sentences do, being based on the number of prior offenses. “Three strike” laws have most frequently been used against unarmed robbers rather than more violent criminals. And unarmed robbery can be as little as a shoplifter pushing past a clerk to get away.

The only good thing to come out of the current recession is a greater willingness to discuss incarceration as the solution to social ills. Elected officials can characterize sentence reform as economic necessity without being tarred as soft on crime.

It’s a good analysis, but I think there’s more to it. Low wages and weak or non-existent unemployment benefit systems can be expected to lead not only to higher crime rates, but also to greater social unrest, riots, political instability – thus rending “flexible labor market” model unfeasible. This makes high incarceration rate not a choice but necessity, and it has little to do with crimes. The purpose is not to reduce or punish criminals, the main purpose is to reduce volatility in the system, neutralize and remove potential trouble-makers.

Venkatesh found that most street dealers were making less than minimum wages, and were motivated by the very low probability of surviving to attain the only high-paying job realistically available to them, that of the local kingpin. Even more striking was the observation that, when gang members learned Venkatesh was a university professor, they approached him in the hope that he would be able to wangle them a job as a janitor – otherwise an ambitious, and probably unattainable aspiration.

Hmm, is that really true? Granted, I get my sociological insights on crime from The Wire, The Sopranos and suchlike, but it seems rather implausible to me that these guys are all making less than minimum wage and would dream of a job as a janitor.

Loury has noted the destructive effects of imprisonment (in Chicago terms, it causes rapid depreciation of human capital).

And not just among those imprisoned – if n% of the male population of an area consists of people who are either about to be sent down or have just been released, the social fabric of the entire area is going to severely stressed.

T. Paine wins this thread for his lulzy moniker.

Anyone read this NY Times article from yesterday?

http://www.nytimes.com/2009/05/31/us/31border.html?em

“Investigators determined that the two immigrants, Jose Manuel Cazeras-Contreras, 30, and Victor Delgadillo Parra, 23, began distributing heroin when they were unable to find jobs. […]

Mr. Contreras, the dispatcher in the case, told federal authorities that he had crossed the border illegally and lived in Oregon for several years before moving to Columbus in 2007 on the promise of a job as an auto mechanic. But that job never materialized. In a letter to The New York Times, he said he had worked a variety of other jobs but had hit an unemployment streak that left him without a car or a house for his wife and two young children.

Desperate for work, he said he found an acquaintance in Columbus who promised him easy money for distributing heroin.”

Yes, Venkatesh found what he found, but I am pretty sceptical of the claim that drug dealers were making minimum wage. Other studies of crack gangs have found significantly higher wages.

Henri #14 – riots? social unrest? political instability? is this supposed to be a description of the US over last two decades? Because we’ve had none of those things. So either our high incarceration rates (in particular, of non-violent petty drug offenders) have been notably successful in maintaining social peace, or they’ve been unnecessary, wasteful and cruel. Are you arguing in favor of the first alternative?

if you have certain apparel labels in your closet, you are wearing clothes manufactured by incarcerated labor. Are they ‘unemployed’ if they work but don’t get paid? ditto for a lot of customer service jobs, etc. In other words, you are arguing that slave labor and unemployed numbers should be combined, so better count the third category as well: unpaid workers in the US.

but, i did argue a portion of your idea long ago with a local politician and he came unglued as well. and i was equally baffled by the reaction. seemed pretty darned obvious to me.

“Henri #14 – riots? social unrest? political instability? is this supposed to be a description of the US over last two decades? Because we’ve had none of those things. So either our high incarceration rates (in particular, of non-violent petty drug offenders) have been notably successful in maintaining social peace, or they’ve been unnecessary, wasteful and cruel. Are you arguing in favor of the first alternative?”

He’s saying that we’re solving the problem of social unrest by throwing millions of marginalized people into jail when we should be dealing with the problem of social unrest by not marginalizing millions of people.

…when we should be dealing with the problem of social unrest by not marginalizing millions of people.

Well, I wouldn’t put it exactly that way. People will be marginalized anyway; they are marginalized in France as we saw a few years ago, and in Sweden too, I’m sure. It’s only a matter of degree, it’s an equilibrium: a more liberal labor market requires more control, more indoctrination, more repressive policies.

Which is pretty much what John is saying, only in my view it’s not because people choose to break some stupid law, it’s more like they reject the whole model and it’s legitimacy, and that is dangerous and unacceptable to the Establishment.

a large class of virtually unemployable Americans

Isn’t this how Mortimer lost one dollar to Randolph?

32: I’m not sure what you’re referring to. I’m just pointing out that raising kids in a crime ridden environment with fathers in prison, terrible schools and poor nutrition has more to do with them lacking the ability to find a job in the legal economy than is determined by union regulations and unemployment benefits.

Oh, I was referring to this old movie.

Well, I don’t know anybody from projects, but judging by popular culture people there certainly show more common sense than, say, virtually all 100% of the pundits in the mainstream media. Even if they are indeed unemployable in the positions available for then in the actually existing economy, it certainly doesn’t mean they can’t do useful work.

A 1st-year-PPE-dropout turned London ‘philosophiser’ writes:

So are professional criminals of various kinds regarded as employed or not?

Is drug prohibition (and theft!) a market failure/defect of some type (labour or ‘other’, if those can be disentangled)?

It seems clear that this must have some relevance to the discussion, though don’t ask me what. I’m asking you lot.

FWIW I think economics is a lot more baffling than it’s given credit for. ‘Schtop – this science isn’t ready yet’. (allusion: UK beer ad commercial.)

#38 – I think it’s just that cars have equal status with human beings in the US.

Out of curiosity, how do US incarceration rates compare the percentage of the young male population in continental Europe doing their national service?

(Although both may take significant numbers of young men out of mainstream society, it strikes me that the latter is slightly less detrimental to their future lives…)

Doh. “First, there will be…” Dang it.

Why isn’t crime economic activity? Especially, say, drug dealing?

So your general argument is of the form if people aren’t working due to X, and there is a convincing link from labor markets to X, then X should be added to the unemployment rate?

Not convincing.

1. People leave the labor force for lots of other reasons — disability, care of family members, early retirement, premature death, etc. — that are at least as directly related to labor institutions as incarceration. Adding only the prison population seems ad-hoc, it’s special pleading. If young men had better job opportunities, perhaps fewer would be in prison (but see below), but the same goes — actually it goes farther — for young women who might choose not to be stay-at-home parents, for older workers who might choose to delay retirement, for disabled workers who could have found less physically demanding work, etc.

2. Labor markets are one driver of prison populations, but not the dominant, let alone the only one. The incarceration rate in the US is far higher than can be explained by labor market factors, as is the gap between black and white rates. Your argument comes dangerously close to an assertion that the US has a big population of prisoners because it has a big population of criminals, which is absolutely not the case — for the non-violent crimes that account for the bulk of the prison population, American rates are comparable to other industrialized countries. Or to look at it the other way, reform the drug laws and you could sharply decrease the prison population. Would you really want to call that a labor market change?

3. Unemployment plays a specific role in macroeconomics, especially since Keynes, as a measure of the slack capacity in the economy and of the cost of job loss. Incarceration simply isn’t relevant there (or at least you haven’t shown it is, or even really tried to). Given the importance of measuring unemployment as it’s generally understood, it’s just muddying the water to try to turn it into a catchall for bad labor market outcomes in general.

I understand where you’re coming from here. You think the superiority of the US labor model is overstated, and you have an intuition that there is a deep connection between US labor institutions and the high incarceration rate here. Personally, I’m totally with you on the first point and halfway with you on the second (altho not to the extent of seeming to deny, as you do, that racism, the fearfulness and punitiveness of American culture, and other factors play an independent role in incarceration rates, totally apart from labor market institutions.) But you’re going up a blind alley here.

I find LP’s argument very persuasive here. I am very curious to know what John means in the second paragraph of 50. LP referred to France adopting American employment practices, but did not mention American social insurance policy. These deserve to be looked at differently. In my view, the only way forward in this argument is for John to argue that the lack of social insurance in the United States leads to lower unemployment and more incarceration. It’s hard to see how an unemployed French worker would start committing more crime because he was fired at will instead of just being unable to find a job.

If France were to adopt American employment practices, they would’ve faced widespread civil unrest. Even with the labor practices they have now, it’s apparently not uncommon for employees to kidnap their executive and held him hostage until their demands are met; and there’s no retaliation, no criminal charges, the government doesn’t get involved.

So, if the government there decided to follow through with American employment practices, their incarceration rate would’ve probably exceed the current US level.

Well, to many people who’ve not been enlightened by right-wing economics, labor policy and social policy are rather closely related.

I’m not sure what you’re trying to insinuate, but issues like at-will employment and corporate-union relations are pretty distinct from policing methods and education in inner-city neighborhoods. They may be tied in a larger conceptual political framework, but we can talk about their impacts separately where possible. The difficulty lower class african americans have in avoiding prison and finding employment have a lot more to do with their education and socializations, not whether the jobs the entry level jobs available to them have union benefits.

55: You’re mixing labor flexibility with social insurance. I can’t see any reason that reducing labor flexibility in the United States would reduce incarceration rates. The debate that Caplan seems to want to have is whether it would increase unemployment. Social insurance may be tied to both incarceration and employment, though.

“They may be tied in a larger conceptual political framework, but we can talk about their impacts separately where possible.”

That’s the whole point. They aren’t really separable from their common causes. Do you think that the fact that race is a rather good predictor of both incarceration and job finding/keeping/salaries is just a spurious correlation?

56-57: you’re right, I was mixing. I don’t think that the labor flexibility is the root cause. You’ll find many flavours of flexibility in Europe and the only common element here really is a social security which has many versions as well but is broadly similar in its output.

I think it is inevitable because it is the superior system (the one with social security) & not only a more humane system. I don’t think social security ever was at the European level in the US, I think (but don’t know) it never ever reached the kind of irreversibility it certainly has here.

Yes, I’m sure there has been regression from 70’s system onwards in the US but mainly because it wasn’t strong enough at that point in time (strength of unions have nothing to do with it imho -it’s just addictive for citizens to know that whatever happens, it’s not ‘lights out’ in one blow).

59: unemployment is not that bad, really, try both and compare!

mpowell @61: Means-tested transfer payments aren’t part of labour-market institutions. Exclusion of the incarcerated from the job market is, as, on free-market principles, is the prevention of (at least) drug-dealers, blackmailers and prostitutes from plying their trade. Correct?

I don’t understand why there has to be a hard causal link between the policies you are comparing and incarceration rate to agree with John’s approach. All you should have to illustrate is that the prison population is disparate enough to skew any comparison of the employment rate. If there were other areas of the population that would skew the employment rate results, say comparing a country that does not employ women to the US, those should also be looked at and discounted (I know you have discussed this issue). I would think the argument should be how much of the prison population to discount. All vs. a percentage (you could even argue more than 100 percent, that one person in prison takes away multiple jobs as it may hamper the flexibility of a spouse or family member to find or maintain employment and they would then not count in the unemployment rate as they drop out.)

The obvious problem with these statistical comparisons is that there are too many variables and you are trying to isolate certain labor policies and saying those are the determining differences.*

As an architect the only statistics I come close to is from the real estate sector and would approach this more like a bet on differing appraisals vs. final market outcome. You should be able to each try and agree on all other factors that alter the final numbers beyond “the policy’. Look at factors, other than the policy you are betting, that skew the result and provide a discount or surcharge. This is, I guess, John’s point. I just don’t see how prison population is the only other factor.

*I live in Oregon and we are always high on the unemployment rate, I would argue that is partially cultural. People just don’t leave when the market says they should. When I saw the writing on the wall for my job in Dallas (2001) I left the state immediately, nothing else (other than financial reasons) was keeping me there. I might stay and look for a while if that happens here. I would argue that longer periods of unemployment are not in itself negative. If there is greater flexibility to stay unemployed, one might be able to maximize their potential by waiting to find that better job. If one is desperate to take the first that comes along, that may lead to underemployment.

Here’s the thing: With the exception of homicide, American and European crime rates are essentially the same.

Here are one-year victimization percentages for the main categories of crime reported in the 2004-05 International Crime Victimization Survey [1] for the US and the six largest EU countries:

Country AutoTheft Burglary Theft Robbery Assault
USA 1.1 2.5 4.8 0.6 4.3
England&Wales 1.8 3.5 6.3 1.4 5.8
France 0.6 1.6 3.3 0.8 2.1
Germany 0.2 0.9 3.0 0.4 2.7
Spain 1.0 0.8 2.1 1.3 1.6
Italy 1.0 2.1 2.4 0.3 0.8
Poland 0.7 1.4 3.5 1.3 3.0

As you can see, the US is at the high end of the range but usually not the top, and certainly not an outlier. And even compared with the lower-crime EU countries, Germany and France, the difference in crime rates is generally about two to one. Whereas the difference in incarceration rates is on the order of ten to one.

So insofar as the link between labor market policies and incarceration is supposed to be via crime rates, there is no link. Because essentially none of the differences in incarceration between the US and Europe are explained by differences in crime rates. Labor markets in the US and in Europe lead people to “choose” crime at approximately the same rates; it is the criminal justice system here that then turns equivalent crime rates into much higher incarceration rates.

I think that’s check and mate, as far as the argument of this post goes.

[1] Franklin Zimring and Gordon Hawkins have a good discussion of the reliability of this kind of survey data in Crime is Not the Problem and show you can see essentially the same pattern in official national data.

The code tag should produce nice regular spaces.

Country Auto Theft Burglary Theft Robbery Assault
USA 1.1 2.5 4.8 0.6 4.3
England&Wales 1.8 3.5 6.3 1.4 5.8
France 0.6 1.6 3.3 0.8 2.1
Germany 0.2 0.9 3.0 0.4 2.7
Spain 1.0 0.8 2.1 1.3 1.6
Italy 1.0 2.1 2.4 0.3 0.8
Poland 0.7 1.4 3.5 1.3 3.0

engels, First: thanks for your kind first sentence in 65! Second, when I read your first reply last night (too late to respond also because I needed to think it over): I could see how my remark at 60 could be easily construed as a cheap snipe. I apologize. I hope it did not hit on personal stuff you encountered in your context, I really do.

As to the content of it – I take objection with your analysis of unemployment. True – for people willing to work but barred from it by circumstance some of the negatives you associate are apt. But this association is not a necessary one as you seem to make out. Full employment is not the greatest good whilst being stripped from one’s freedom surely is the greatest bad. If capitalism goes astray it certainly doesn’t go astray in maximizing the out-group, and the analysis that the communist alternative through full employment is a solution is one I cannot share. On the one hand because it minimizes the in-group (apparatsjiks is the term). On the other because forced employment ethics is surely worse than living with more unemployment.

My point is that unemployment (broadly speaking, including leisure and people working in arts and research in a fully independent, possibly non-commercial, way) is good but that such good needs to be equitably distributed (as any other good). Equitable can mean that some – willing to work – work more than the average and others – unwilling to work – work less than the average. Not all of us need social context, not all of us need work to get social context if we need it.

I can understand that all of this seems like statements coming from a Martian recently landed. I know I have not thought it through enough. But I also know that communism & capitalism have a common desire to ‘optimize the labour market’ and a hunch that that’s where both fail modern man.

A stable economy requires unemployment, but also, I think, a low-wage/flexible-labor-market economy requires higher rates of incarceration among the unemployed, non-portable medical insurance and other stuff like that.

You have to be incentivized to take an unappealing low-paying job, otherwise facing a not too far-fetched prospect of ending up in jail, which is really (or so I heard) much more unpleasant than just being unemployed.

These are all integral parts of the program, not some random arbitrary pieces.

FWIW, using ^table^ markup might work, though marking up manually would be a pain:

Country                  Auto Theft   Burglary     Theft           Robbery      Assault
USA1.12.54.80.64.3
England&Wales1.83.56.31.45.8
France0.61.63.30.82.1
Germany0.20.93.00.42.7
Spain1.00.82.11.31.6
Italy1.02.12.40.30.8
Poland0.71.43.51.33.0

the figures measure the incidence of perceived victimhood rather than the patterns of offending, though. And how much crime against businesses, or victimless (complicit anyway) ones like drug-dealing would show up in a poll of householders?

BTW the US isat the top, if you leave out the anglo-model UK.

Rather than trying to disentangle the causal influences (as one would want to) on the much higher imprisonment rate (e.g. the preventive effect of imprisonment, greater punitiveness v greater seriousness/recidivism/professionalisation), wouldn’t you be better off directly looking at the relationship between long-term unemployment and imprisonment for economic crime?

or that. Sorry…looked fine in preview

The server escaped them for me. A combination of code tags to give fixed-width font with spacers such as dots that won’t get messed up by ‘helpful’ server-side transformations would have done it. But I have made such a terrible mess, as well as posting my comments without checking that they hadn’t been superseded in the interim, that I will just slink away shamefacedly and get on with what I am supposed to be doing.

the figures measure the incidence of perceived victimhood rather than the patterns of offending, though. And how much crime against businesses, or victimless (complicit anyway) ones like drug-dealing would show up in a poll of householders?

The advantage of the victimization survey is that it is a single survey, administered the same way in every country. Other crimes have to be tracked using national statistics which are harder to compare. But for our purposes, leaving those other crimes out doesn’t matter, because the type of crimes covered account for the bulk of the prison population.

BTW the US is at the top, if you leave out the anglo-model UK.

Well, first of all, the conventional view is that UK labor market institutions are intermediate between the US and Europe. Second, again, the question is how much. Yes, the US is near the top (in fact several smaller European countries, such as Ireland, are consistently higher), but not by anywhere near the margin it is for incarceration rates. Again, John’s argument is not just that there is some link from labor market institutions to crime rates, and some link from crime rates to incarceration rates; it requires that those links be the predominant influence on incarceration rates. And the empirical evidence just does not support that.

I am going to present some more data on this shortly. (It would be interesting to see some data from John supporting his strong labor-crime and crime-incarceration links.)

But one other point. The “left” side in this debate seems to have become identified with John’s view. But politically, there is nothing progressive about his position, since his argument is just as much a defense of the US criminal justice system, as it is a criticism of US labor markets. As someone who thinks that the US prison system is an appalling, vicious institution, I think we should be very wary of assuming — as John, so far without evidence and contrary to most progressive criminologists, is doing — that it is really effective, and even in some sense necessary, in reducing crime.

From Michael Tonry, Why Are U.S. Incarceration Rates So High?:

***

in the United States, 1 resident per 150 is imprisoned; that is 6 to 12 times the rate in other Western countries …
The first explanation for why so many Americans are in prison, that our crime rates are higher or faster rising than other countries’, has virtually no validity. Crime rates in the United States in the 1990s are, for the most part, no higher than in other Western countries. … Gun violence is [higher]; however, fewer than a fourth of those sentenced to prison are convicted of violent crimes of any type, so this cannot be why U.S. prison patterns and penal policies are so different. …

If higher crime rates do not explain American exceptionalism, perhaps crime trends do. Perhaps … that is why the number of people locked up has increased by five times in the past quarter century, from about 300,000 in 1972 to 1,802,496 in mid-1998. … Figure 2 and Figure 3, which show comparable data for Finland and Germany during the same period, indicate that there is no such necessary connection. Other countries could have been used for the comparison, but the United States would still be an exceptional case (Kuhn 1997). Although the homicide and violent crime curves in Finland and Germany rose as steeply as the U.S. curves shown in Figure 1, the imprisonment rate in Germany fell throughout the 1960s and remained roughly level thereafter, and the incarceration rate in Finland fell sharply and steadily throughout the entire period. …American imprisonment rates did not rise simply because crime rates rose. They rose because American politicians wanted them to rise. …

As Figure 4 shows, crime rates for most crimes peaked around 1980… However, the first three-strikes law was enacted in 1993, and the federal truth-in-sentencing law, which authorized $8 billion for state prison construction, was passed in 1994. The meanings of these data are complex, but whatever else they show, they do not show any simple interaction between crime trends and imprisonment patterns.

***

Tonry is Director, Institute of Criminology, Cambridge University, and Sonosky Professor of Law and Public Policy, University of Minnesota. So if he says there’s no link between crime rates and incarceration rates, you don’t have to take his word for it, but you might wnt to adjust your priors a bit in that direction.

It is then unfair to claim lower unemployment as a sign of superiority of economic system (maybe even lemuel pitkin could agree to this rephrasing).

I do accept it. I’ve said so repeatedly. One of the things that frustrates me here is that John is making a weak (well, false) argument in support of a correct & important overarching position. Those are the errors we have to be most vigilant for.

O rather, I accept what I quoted. But is just is not true that that the US incarceration rate is a necessary result of the inadequate safety net here. Nor has John presented any evidence for this — he’s just said that “Chicago school” economists ought to think it (which, since none of us are they, is irrelevant) and he’s asserted an a priori belief that incarceration must reduce crime rates.

The other side of this is that while John’s argument gives too much credit to American prisons, it actually, paradoxically, gives too much credit to American labor institutions as well. Because he is conceding that flexible labor markets and a minimal safety net really do deliver lower unemployment, albeit at a cost of higher crime. Whereas the empirical evidence — I’ll be happy to provide as many cites as you want — show that flexible labor markets don’t work even in that limited sense. All of Europe’s higher unemployment is explained by restrictive monetary and fiscal policy and, in general, slower demand growth; none of it is explained by labor market institutions.

I still don’t see why the exclusion of people from the workforce by putting them in prison (and not letting them get outside jobs) doesn’t count as a labour market restriction

Tom,

Look again at the tile of this post. It’s “Incarceration as a labor market outcome“. Totally different claim.

The ‘S’ word in question isn’t a primal human activity but a final stage of human development.

@94 I getcha. I just had one moderated myself and don’t know why. I think it might be a posting frequency restriction.

@92 Yes, I had got that far at least. It just seemed somehow relevant to the question whether they should be added to the unemployment figures, but I suppose it’s a fairly separable issue, especially if you don’t include drugdealers, pimps, gangs that enforce rough justice in police no go areas, etc. in the employment figures. I don’t know. Just chucking in a few mutated ‘memes’.

@engels: I’m not sure what you mean by a final stage of human development, but if it’s a political S word often associated with your alias, you might consider that it contains as a substring the name of a drug often hawked by spammers. Perhaps this site has some variation of the Scun-thorpe problem? (Remove the hyphen to test for another manifestation of the problem, which is named for a small town in England which just happens to have an obscene four-letter word as a substring.)