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The Economics of Prison Boomtowns

In many towns in the rural South, new prison construction represents critical jobs and growth. But not everyone wins.

In Forrest City, Arkansas, both white and black leaders in town supported the construction of a new prison. And the town did reap real economic benefits. (Danny Johnston/AP)

Between 1970 and 2005, the number of prisons in the U.S. increased from around 500 to over 1,800, a boom fueled by a commensurate rise in incarceration rates. The country’s prison population climbed 700 percent during this time, which more closely reflected discriminatory criminal justice policies than crime rates.

How did these prisons shape the communities that hosted them? John Eason, a sociologist at Texas A&M University, explores that question in his new book Big House on the Prairie: Rise of the Rural Ghetto and Prison Proliferation.

Prisons are traditionally considered Locally Unwanted Land Uses (LULUs)—structures associated with negative outcomes. They’re are typically ugly, perceived as dangerous and a threat to property values. But many rural towns, particularly in the South, not only accept but actively lobby for prison construction. Unsurprisingly, this is where most U.S. prisons are located.

In 2007, Eason moved his family to one such town—Forrest City, Arkansas—so he could take a deep dive into the complicated local dynamics that led to the erection of a federal prison there in the 1990s. In a conversation with CityLab, he highlighted his main findings.

Lay out some of the misconceptions about rural prison towns that you disabused yourself of, once you started researching this book?

There's the classic article that has been cited hundreds of times at this point: “The Prison-Industrial Complex” by Eric Schlosser in The Atlantic. It completely inspired me. I was a community organizer [in Chicago] when I read it, and I was like, “I've got to go back to school to figure out how to do public policy to change all of this.”

So, I go to school. I'm doing my Masters, and my data keep coming up the wrong way. They’re not showing that these towns are predominantly white or that they have high unemployment. They are often majority white, but a town that’s 55 or 60 percent African American has a pretty good chance of getting a prison—a better chance in a town it's 90 percent white. I compiled data for the 1990s, geocoded it by hand, and then I picked my case study, in Forrest City.

When I got to Forrest City and even the African-American leadership in town wanted the prison, that’s when I was disabused of all notions. That was the big counterintuitive finding for me.

So, let’s focus on Forrest City for a second. Tell me a little bit about the history of race relations in this town.

During my book tour, mainly in the South, I tell the audience that the town is named after Nathan Bedford Forrest, founder of the most infamous domestic terrorist organization in U.S. history: the KKK. I then ask [students at Southern universities where I’m touring] what the name of the high school is that the town founded shortly after the fall of Jim Crow, when it was trying to maintain segregation. “It’s Robert E. Lee, right?” “Exactly.” [Confederate names] are a common pattern in rural Southern towns.

Normally, at least 20 percent of the town that gets a prison is black. Forrest City was around 50 percent black. By that time the prison opened, it had its first black mayor. Rural Southern towns can have sizable black populations, but often they don't have political power, in part, because they don't have economic power. They don't own the means of production in town. They don't own the land. Even if they do own land, they don’t benefit as much compared to their white counterparts. This creates a lot of racial tension.

[Forrest City] had a history of lynching. They know how to keep their people of color in line. So, when they’ve tried to unionize, when they’ve tried to buck the system in any way, or even seek political power—they’re seen as uppity. That's a lot of what the town’s mayor, Larry Bryant, expressed; he was the target of a lot of racial tension. This unwavering belief of white supremacy—[this town] gets to enact it on a daily basis.

Things have changed—but not. Jim Crow came and went. But now they now have a ghetto, so they have more poor black people in town, and they put them in public housing.

You mention in the book that Forrest City underwent periods of economic decline and job loss. It had also made some national news: There was the case of Wayne DuMond, a white man who was accused, and later convicted, of raping the teenage daughter of a local official. DuMond was castrated by vigilantes rumored to have been ordered by the sheriff, who himself was later found guilty of corruption in an unrelated case. His house was burned down. Mike Huckabee, then the governor of Arkansas, came under fire for expressing support for DuMond’s parole. That’s a lot of bad publicity for one town.

It wasn't just about the jobs. They had an identity. Forrest City is representative of many small towns, and continues to be. Their identity had, as a collective, been marred. And [towns like this] don’t necessarily need to have a castration, arson, and a strike that happened within a year and a half, like it did in Forrest City. They don't need all of that to bring infamy, because economic decline hasn't happened in a vacuum.

So why did you examine the local demand for a prison in this town?

The system that sends people to prison is inherently racist—from policing to the court. The problem is: That’s the supply side. The demand side has been oversimplified. There is a belief that this is just about jobs. In fact, there are other things going on in small rural towns that are way more complex than people make them out to be. [The demand] goes beyond party lines and racial politics.

One of your big arguments is about racial segregation. Starting in the late 1960s, the U.S. Department of Agriculture subsidized low-income rental housing nationally. From the 1980s onwards, the Department of Housing and Urban Development and USDA both expanded public housing units in Forrest City. Could you talk about how that led to the development of the  “rural ghetto”  there?

There was a higher poverty rate in Forrest City before the USDA housing. But when they built the housing developments, it spatially concentrated poverty, and it racialized it.

So, 50 percent of the town lived below poverty, and 40 percent of the people below poverty were black in 1970. By 2000, only a third of the town lives below poverty—but 80 percent of those people are black. A huge chunk of these folks were living within a third of a square mile. That third of a square mile was also home to 60 to 70 people returning from the Arkansas Department of Corrections. So, you have a high reentry rate. The town had a high murder rate. There was a high incidence of HIV and AIDS. All of that was highly concentrated in that third of a square mile between six [public and Section 8] housing developments.

A map of Forrest City, with shares of black population.

That has never turned out well. It has never been a good idea to put all the poor people in one neighborhood, anywhere in the country. It doesn’t work out if they're black; it doesn't work out if they’re white. When you look at poor, white places that had high poverty rates, they have followed some similar patterns.

We've torn down a lot of public housing units in urban areas over the last few decades. And this build-up of public housing in rural areas has gone virtually unnoticed.

So, this incredible concentration of poverty, how did that influence the demand for a prison?

It continues to be a real source of shame and stigma for the town. I think the prison, in a way, gave them a symbol—it was about reputation management. They wanted to make themselves look better—seem like, to other people in the state, that the African-American leadership and whites were getting along better. They were trying to repair their image, but the ghetto was a constant thing. And both black and white leaders used the same narrative around the culture of poverty. They linked the problems in the ghetto to the people, and not necessarily the place, or how those people were being treated.

The fact that they lived in housing developments that had no stores by them, in a food desert—they saw none of that as being their responsibility. One African-American leader talked about the people in the poor areas as “those people” over and over again, talking about African Americans. There was a lot of projection of the failure of the town on these poor people.

While I was in the field, I came to understand that they wanted to avert going further downhill—avoid becoming Gary or East St. Louis—these places are the butt of jokes. The prison was their stopgap measure.

It was framed as something that would save the town.

The public meeting they had to do the formal RFP had 300 people, and they described it like a revival where black and white people, who normally were at each other's throats, were singing songs and getting along and supporting the prison. It seemed like a religious experience.

So, what’s the actual impact of this prison?

I found no one that said the prison was bad. People morally disagreed with it, like a young lady, who said, “We had to fight to get stuff for the school.” She found it morally reprehensible, but I believe her mom tried to get a job there.

The prison benefited them in so many ways. Forrest City got hundreds of thousands of dollars back every year from the state based on their prison population. Conservatively, they only had a third of the jobs in town, so the city had new people move in. That means new permits for new housing. That means home sales. That means even before the prison was built, there were millions of dollars placed in local banks. There was interest being earned for contracts to turn the dirt, and to put in the foundation and the plumbing. The black leaders in town got contracts set aside for minority businesses. The mayor at the time, Danny Ferguson? His wife got a job as an accountant at the prison.

When you compare towns that got prisons versus those that don't, the ones that do receive a boost in median family income and median home values. They decrease poverty and unemployment. I didn’t include this in the book, but I've done some other analyses since then that show that the rate of black unemployment and black poverty decreases.

So how do we reconcile these benefits—which in many cases are accruing to black and brown residents too—with a system that’s disproportionately locking up the same groups of people for profit?

If you want to decrease prison demand, you need do something more innovative. Not just giving these towns economic alternatives like green industries, but de-concentrating poverty in a sensible way in rural communities. We need to have innovative programs that get people to work. We need to not kick people off welfare like we're doing in states like Mississippi, further adding to their deprivation.

There are some innovative examples taking place in urban areas, with public-private partnerships, but we don't have that same sort of innovation taking place in rural communities.

The racism occurs upstream and we put people in prison—that’s the supply side. The racism that occurs in prison placement is in the creation and maintenance of the ghetto that produces the conditions for demand.

About the Author

  • Tanvi Misra
    Tanvi Misra is a staff writer for CityLab covering demographics, inequality, and urban culture. She previously contributed to NPR's Code Switch blog and BBC's online news magazine.