The Bottom One Percent

[morningfog]

We often hear a lot, especially from those who want to tear them down, about the top 1 percent. We don't hear nearly as much about the bottom 1 percent. Who are they? Where are they? Why are they in the bottom 1 percent? And what should we do about them?

It turns out that about two thirds of the people in the bottom 1 percent are in U.S. prisons. And of these people, a few hundred thousand are there for victimless crimes. Letting them out would help them and save us taxpayer money. That’s a win-win.

Why do I say that about two thirds of the people in the bottom 1 percent are in prison? Consider the numbers. In the United States today, there are about 314 million people. One percent of the U.S. population, therefore, is 3,140,000. In our prisons today are 2.2 million people. We have a higher percent of our people in prison than any other country in the world and the percent of our population in prison has, shockingly, more than doubled since 1980. The people in prison make up over two thirds of one percent of the U.S. population.

It’s true that some of these people have substantial income on the side. Think of the person who, even though he’s in prison, owns stocks or bonds that generate income. But surely, such people could not number more than, say, 5 percent of the prison population. That leaves 2.1 million people without substantial non-prison income, which is still two thirds of the bottom 1 percent.

Some of these prisoners do make income, but their income is tiny, according to a study done in 2002 by the Washington-based Economic Policy Institute. Its author, Heather Boushey, found that Federal Prison Industries (FPI), which employs inmates in federal prisons, pays them between $0.23 and $1.15 per hour, with the average federal prisoner making $0.92 per hour. She noted, however, that from this gross pay, the government deducts funds for restitution, to offset the high cost of incarceration, and for other purposes, leaving the average federal-prison employee with a measly $0.18 per hour.

http://www.hoover.org/publications/defining-ideas/article/129091

[porphyrian]

1. . n/t

[Mnemosyne]

2. K&R

[DreamGypsy]

3. You have to read the whole article...

These conclusions are from the Hoover Institution at Stanford, not exactly a strong bastion of progressive thought.

Cut to the chase at the bottom of the article:

We hear the Occupy Wall Street people—and President Obama—advocate taxing the top 1 percent more. I've got a better idea: Let's tax the top 1 percent less and let a few hundred thousand of the bottom one percent out of prison—and out of poverty.

Decades ago, economists introduced the term “Pareto improvement,” named after the famous Italian economist and sociologist Vilfredo Pareto. A Pareto improvement is one that makes some people better off and no one worse off. Such improvements are few and far between because even good policies, such as ending farm subsidies or import restrictions, cause losses to those who benefit from the bad policies. But letting those who commit victimless crimes out of prison is as close to a Pareto improvement as we are likely to find.

The other group of poor people in prison consists of those who are there for committing violent crimes, theft, fraud, and other such things. Most of us think they should be in prison. But even there, there’s a way to make things better: Allow more employers to compete for their services.

In her earlier-mentioned study for the Economic Policy Institute, Heather Boushey criticizes the idea of letting private companies hire prisoners. But the solution, when wages are low, is not to restrict competition for employees but to expand it. With more employers competing for a fixed number of workers, wages would rise. Workers would be better off making money and retaining or acquiring skills. Employers would obviously be better off.

And if the prison took some percentage of the pay, taxpayers would not have to pay as much. That would be win-win-win.

Is that a great idea? Or is it exploitation? Not necessarily an easy question to answer. What happens to those let out of prison so the wealthy can pay less? Are the perpetrators of violent crimes left with any recourse? I don't know. But my guess is that the author of the article, David R. Henderson (Research Fellow), is not advocating asking the prisoners what their choices might be ....

Bob Dylan wrote The Times They Are A-Changin' in 1963. Maybe he missed a verse:

Come all of you prisoners
Locked up in a jail
And pay you no heed
To Society's tale.
For the walls that we build
Are the proof that we fail.
Inside and out may need rearranging
As the crimes of the rich
Cause the deaths of the poor
For the times they are a-changing.

[SmileyRose]

4. Parento would not apply because

the 1%ers who make a crapload of money off the prison contracts would lose.

[riderinthestorm]

5. Ex cons have a bad time finding work. Far better to never incarcerate minor drug offenders etc nt