Do prisons help economies?

The folks in Mendota certainly hope so. Hiring is underway for a federal prison about 35 miles west of Fresno. Thing is, having a prison in your town is a mixed economic blessing. More jobs are a plus, of course, but prison employees usually live some distance from the facility. Also, real estate prices usually fall because no one wants to live near guard towers and razor wire. From the LAT:

Small towns want prisons because "they're struggling and they think this is a home run," [said Terry Besser, a professor at Iowa State]. "But when prisons locate there, the unemployment rate goes up, the percentage of people in poverty goes up, and the average wages go down across the board."


Merchants in this sleepy town of 10,000 think the prison will spark an economic turnaround. "We need some sort of presence that's positive," said Joseph Riofrio, a onetime Mendota mayor who owns a local grocery store. The town has problems with public drunkenness and fights that Riofrio says will disappear once the town is crawling with correctional officers.

At least six counties and two cities have approved measures to allow new prisons in their jurisdictions, according to the state Department of Corrections.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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