Thoughts on a variety of topics from an American living in Ottawa, Canada

Monday, November 27, 2006

Economics 101 

Today's Ottawa Sun includes an article suggesting that federal prisoners should get a raise in "pay", with some officials suggesting that prisoners should get "minimum wage" for work they do, in order (so they say) for these prisoners to more easily re-integrate in society.

But these prisoners do not have to pay their daily bills while in prison. They get free room and board. Sure, they have to buy their own luxuries such as cigarettes and chocolate, as well perhaps as certain more necessary items.

And the experts warn that if these convicts don't have enough money, they might have to turn to loansharks within the prison, who might even target the prisoners' families outside prison for repayment in their underground prison economy.

But ... let's imagine what would happen if prisoners made, say, $100 a day. Supplies of goods are limited, and opportunities to spend are also limited: the motivation is to drive up prices, not to turn these criminals into investors. Indeed, if they had spare cash they would tend to invest in the locally obtainable goods, since they neither have ready access to, nor trust in, stockbrokers.

So the prices of controlled goods would skyrocket inside prison walls. And those who have no money, and need goods, would still have to turn to a burgeoning loanshark industry inside the prison walls. But now, "real" money would be at stake, and the families of prisoners could face real jeopardy. Few prisoners would want the added jailtime for committing a murder (even in Canada, where such jailtime is often minimal), over a debt of a few dollars. For a few hundred, or a few thousand, who knows what violence might ensue.

This is over and above the obvious problem: that rent, utilities, food (and food preparation), and other normal household expenses borne by the law-abiding citizens who earn minimum wage, are paid by law-abiding taxpayers and not by the prisoners themselves. It is a nominal deduction for those expenses which leaves prisoners earning a net daily wage today of merely a few dollars a day - perhaps a couple hundred dollars a month.

That's more than many people who live law-abiding lives at minimum wage jobs. More than most single parents in minimum-wage jobs. Plenty for someone who has, by their own actions, disqualified themselves from the privileges of society for some period of time.
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