# Why do we have privatized probation companies, jails, and prisons? **URL:** \ **Category:** Factual Questions\ **Created:** [August 17, 2016, 6:13pm UTC](https://boards.straightdope.com/t/why-do-we-have-privatized-probation-companies-jails-and-prisons/763099 "2016-08-17T18:13:42Z")\ **Posts on this page:** 3\ **Page:** 3
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [August 18, 2016, 5:37pm UTC](https://boards.straightdope.com/t/why-do-we-have-privatized-probation-companies-jails-and-prisons/763099/41 "2016-08-18T17:37:07Z")
> [@Nava](#): > > Among other things, because the GOP likes to talk about “small Government” and they don’t count the subcontractors when counting “people who work for the Government”. I’ve seen the same headcounting gymnastics in private enterprises, for example when there were regulations they could avoid or assistance they could get by having a smaller headcount. _“You’re my favorite headcount…”_ -Pointy-haired Boss in Dilbert. The way it was explained to me - some out-of-touch boffins on Wall Street crunch the data on your company and come up with a number - “this is how many employees you should have.” It was my observation that the number failed to account for sicknesses, vacation, absent days, training on turnover, etc. so following that the business was too lean. Fortunately, a contractor was not “headcount”. In fact, most contractors were not, they were employees of another firm who then contracted them to us. The advantage was they could be gone with a moment’s notice; as usual, a benefit for the psychopath firm, but a crap way to treat employees. Except for the ones with exceptional skill and managed their own contracting, they were grossly underpaid and had none of the benefits that employees of a big firm had. Worse, you had some people who were essential to the operation but higher management were prepared to dump on a moment’s notice when quarterly results went down. ---
**Author:** ![Tired\_and\_Cranky](https://avatars.discourse-cdn.com/v4/letter/t/a87d85/32.png) [@Tired\_and\_Cranky](https://boards.straightdope.com/u/Tired_and_Cranky)\ **Post date:** [August 18, 2016, 5:43pm UTC](https://boards.straightdope.com/t/why-do-we-have-privatized-probation-companies-jails-and-prisons/763099/42 "2016-08-18T17:43:58Z")
There may soon be fewer of them as the U.S. Department of Justice proposes to stop using them over safety and cost concerns: > **[US to end federal use of private prisons](https://www.bbc.com/news/world-us-canada-37124183)** > > US Justice Department will phase out use of privately owned prisons, citing safety concerns. ---
**Author:** ![Dallas\_Jones](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dallas_jones/32/3277_2.png) [@Dallas\_Jones](https://boards.straightdope.com/u/Dallas_Jones)\ **Post date:** [August 18, 2016, 5:49pm UTC](https://boards.straightdope.com/t/why-do-we-have-privatized-probation-companies-jails-and-prisons/763099/43 "2016-08-18T17:49:46Z")
> [@yabob](#): > > Heh. You guys must be pleased with the price action on CXW and GEO today. Both off in the vicinity of 40%: > > [http://blogs.barrons.com/stockstowatchtoday/2016/08/18/take-no-prisoners-corrections-corp-geo-tumble-on-doj-plan-to-eliminate-private-prisons/?mod=yahoobarrons&ru=yahoo](http://blogs.barrons.com/stockstowatchtoday/2016/08/18/take-no-prisoners-corrections-corp-geo-tumble-on-doj-plan-to-eliminate-private-prisons/?mod=yahoobarrons&ru=yahoo) > > Means I watch them to see if this is overdone and worth bottom fishing. I suspect not. > > BTW, both of these are structured as REITs (Real Estate Investment Trusts), which makes sense. Take that into account if you look at their numbers. Neither of them even has the padding of an already scheduled dividend at their new yield of over 12%. Care to bet on the likelihood of cuts? The Dept of Justice has announced that they will end the use of private contractors to run federal prisons. They say they will not renew these contracts and may move to cancel. This will take some time and will probably happen only as existing contracts expire. Stocks of these publicly traded companies are tanking, at least for awhile today. Not all of them are publicly traded, MTC mentioned in the Washington Post link below is a privately held corporation from Utah. [https://www.washingtonpost.com/news/post-nation/wp/2016/08/18/justice-department-says-it-will-end-use-of-private-prisons/?postshare=9221471534255226&tid=ss\_tw&utm\_term=.f1034c061777](https://www.washingtonpost.com/news/post-nation/wp/2016/08/18/justice-department-says-it-will-end-use-of-private-prisons/?postshare=9221471534255226&tid=ss_tw&utm_term=.f1034c061777) [Previous page](https://boards.straightdope.com/t/why-do-we-have-privatized-probation-companies-jails-and-prisons/763099.md?page=2)