The term "prison–industrial complex" (PIC) is used to attribute the rapid expansion of the US inmate population to the political influence of private prison companies and businesses that supply goods and services to government prison agencies. The term is derived from the "military–industrial complex" of the 1950s. Such groups include corporations that contract prison labor, construction companies, surveillance technology vendors, companies that operate prison food services and medical facilities, private probation companies, lawyers, and lobby groups that represent them. Activist groups such as the National Organization for the Reform of Marijuana Laws (NORML) have argued that the prison-industrial complex is perpetuating a flawed belief that imprisonment is an effective solution to social problems such as homelessness, unemployment, drug addiction, mental illness, and illiteracy.
The term 'prison industrial complex' has been used to describe a similar issue in other countries' prisons of expanding populations.
The promotion of prison-building as a job creator and the use of inmate labor are also cited as elements of the prison-industrial complex. The term often implies a network of participants who are motivated by financial profit rather than solely the goal of punishing or rehabilitating criminals or reducing crime rates. Proponents of this view, including civil rights organizations such as the Rutherford Institute and the American Civil Liberties Union (ACLU), believe that the desire for monetary gain has led to the growth of the prison industry and the number of incarcerated individuals.
"The Prison Industrial Complex" is the title of a recorded 1997 speech by social activist Angela Davis, later released as an audio CD that served as the basis for her book of the same title. Davis also co-founded the prison abolition group, Critical Resistance, which held its first conference in 1998. Her article entitled "Masked Racism: Reflections on the Prison Industrial Complex," published in the Fall 1998 issue of ColorLines, stated: "Homelessness, unemployment, drug addiction, mental illness, and illiteracy are only a few of the problems that disappear from public view when the human beings contending with them are relegated to cages," Davis says. "Taking into account the structural similarities of business-government linkages in the realms of military production and public punishment, the expanding penal system can now be characterized as a 'prison industrial complex.' "
- "The 'prison-industrial complex' (PIC) is not only a set of interest groups and institutions; it is also a state of mind. The lure of big money is corrupting the nation's criminal-justice system, replacing notions of safety and public service with a drive for higher profits. The eagerness of elected officials to pass tough-on-crime legislation – combined with their unwillingness to disclose the external and social costs of these laws – has encouraged all sorts of financial improprieties."
Schlosser defined the prison industrial complex as "a set of bureaucratic, political, and economic interests that encourage increased spending on imprisonment, regardless of the actual need."
Another writer of the era who covered the expanding prison population and attacked "the prison industrial complex" was Christian Parenti, who later disavowed the term before the publication of his book, Lockdown America (2000). "How, then, should the left critique the prison buildup?" asked The Nation in 1999:
- "Not, Parenti stresses, by making slippery usage of concepts like the 'prison–industrial complex.' Simply put, the scale of spending on prisons, though growing rapidly, will never match the military budget; nor will prisons produce anywhere near the same 'technological and industrial spin-off.'"
Sociologist Loïc Wacquant of UC Berkeley is also dismissive of the term for sounding too conspiratorial and for overstating its scope and effect. However Bernard Harcourt, Professor of Law at Columbia University, considers the term useful insofar as "it highlights the profitability of prison building and the employment boom associated with prison guard labor. There is no question that the prison expansion served the financial interests of large sectors of the economy."
Others argue that while prison reform is necessary, economic reform through equality for people of color is first necessary before real change can be realized.
In 2011 The Vera Institute of Justice surveyed 40 state correction departments to gather data on what the true cost of prisons were. Their reports showed that most states had additional costs ranging from one percent to thirty-four percent outside of what their original budget was for that year.
Hadar Aviram, Professor of Law at UC Hastings, suggests that critics of the prison-industrial complex (PIC) focus too much on private prisons. While Aviram shares their concerns that "private enterprises designed to directly benefit from human confinement and misery is profoundly unethical and problematic," she claims that "the profit incentives that brought private incarceration into existence, rather than private incarceration itself, are to blame for the PIC and its evils." In the neoliberal era, she argues, "private and public actors alike respond to market pressures and conduct their business, including correctional business, through a cost/benefit prism."
A 2014 report by the American Friends Service Committee, Grassroots Leadership and the Southern Center for Human Rights claims that recent reductions in the number of people incarcerated has pushed the prison industry into areas previously served by non-profit behavioral health and treatment-oriented agencies, referring to it as the "Treatment Industrial Complex," which "has the potential to ensnare more individuals, under increased levels of supervision and surveillance, for increasing lengths of time – in some cases, for the rest of a person’s life." Sociologist Nancy A. Heitzeg and activist Kay Whitlock claim that contemporary bipartisan reforms being proposed "are predicated on privatization schemes, dominated by the anti-government right and neoliberal interests that more completely merge for-profit medical treatment and other human needs supports with the prison-industrial complex."
As the prison population grows, a rising rate of incarceration feeds small and large businesses such as providers of furniture, transportation, food, clothes and medical services, construction and communication firms. Furthermore, the prison system is the third largest employer in the world. Prison activists who buttress the notion of a prison industrial complex have argued that these parties have a great interest in the expansion of the prison system since their development and prosperity directly depends on the number of inmates. They liken the prison industrial complex to any industry that needs more and more raw materials, prisoners being the material.
The prison industrial complex has also been said to include private businesses that benefit from the exploitation of the prison labor; prison mechanisms remove "unexploitable" labor, or so-called "underclass", from society and redefine it as highly exploitable cheap labor. Scholars using the term "prison industrial complex" have argued that the trend of "hiring out prisoners" is a continuation of the slavery tradition. Prisoners perform a great array of jobs and are exploited in the following ways: minimal payments, no insurance, no strikes, all workers are full-time and never arrive late. Cynthia Young states that prison labor is an "employers' paradise". Because of the high profits possible, new businesses involving the import and export of prisoners were developed. Also the prison industry closes the gap between free and coerced labor. Prison labor can soon deprive the free labor of jobs in a number of sectors, since the organized labor turns out to be uncompetitive compared to the prison counterpart.
Journalist Jonathan Kay in the National Post defined the "prison industrial complex" as a corrupt human-warehousing operation that combines the worst qualities of government (its power to coerce) and private enterprise (greed)." He states that inmates are kept in inhuman conditions and that the need to preserve the economic advantage of a full prison leads prison leaders to thwart any effort or reforms that might reduce recidivism and incarcerations.
The private prison industry has been accused of incarcerating people in mainly impoverished communities for minor crimes so as to use them for free labor.  In a study by Doug McDonald, Ph.D. and Scott Camp, Ph.D., known as the "Taft studies", privatized prisons were compared side-to-side with the public prisons on economic, performance, and quality of life for the prisoner scales. They found that in a trade off for allowing prisons to be more cheaply run and operated, the degree to which prisoners are reformed goes down. Because the privatized prisons are so much larger than the public-run prisons, they were subject to economies of scale. With more prisoners in a single prison, the day-to-day cost to hold the prisoner goes down as the initial startup costs of the prison are already taken care of. Furthermore, with more prisoners comes more free labor. When having larger, privatized prisons makes it cheaper to incarcerate each individual and the only side effect is having more free labor, it is extremely beneficial for companies to essentially rent out their facilities to the state and the government.
Private or for profit prisons have an incentive in making decisions in regards to cutting costs while generating a profit. One method for this is using prison inmates as a labor force to perform production work. 
When a prison uses its prisoners to work on or near toxic substances there runs the risk of individuals becoming infected or poisoned as a result of coming into contact with them. Any incidents that do occur are supposed to be reported and appropriate health and safety measures are to be taken for all involved. Incidents, however, that are reported would result in costs for care and recovery of the individual or clean up and disposal of the substances including any fines that may be imposed for failure to comply with safety standards and protocols. When there is less incentive to report or care for individuals when an incident does occur, given the costs of reporting versus ignoring or covering up the incident, a prison may be inclined to overlook safety protocols rather than enforce them to prevent or protect these individuals. This can result in prisons choosing not to report incidents and making decisions to cover them up instead.
According to a 2010 investigation by the Department of Justice many of the employees and prisoners were exposed to toxic metals from not being sufficiently trained nor were they given the resources to handle toxic material. Injury and illness as a result were not reported to appropriate authorities. When investigated they found that UNICOR had attempted to conceal evidence of working conditions from inspectors by cleaning up the production lines before they arrived.
A response to the prison industrial complex is the prison abolition movement, which seeks to end the social problems that fuel the need for prisons and punishment. The goal of prison abolition is to end the prison industrial complex by eliminating prisons. Prison abolitionists aim to do this by changing the socioeconomic conditions of the communities that are affected the most by the prison-industrial complex. They propose increasing funding of social programs in order to lower the rate of crimes, and therefore eventually end the need for police and prisons. The movement gained momentum in 1997, when a group of prison abolition activists, scholars, and former prisoners collaborated to organize a three-day conference to examine the prison-industrial complex in the U.S. The conference, Critical Resistance to the prison-industrial complex, was held in September 1998 at the University of California, Berkeley and was attended by over 3,500 people of diverse academic, socioeconomic and ethnic backgrounds. Two years after the conference, a political grassroots organization was founded bearing the same name with the mission to challenge and dismantle the prison-industrial complex.
A competing explanation for the disproportionate arrest and incarceration of people of color and persons with lower socioeconomic status is the School-to-prison pipeline, which generally proposes that practices in public schools (such as Zero Tolerance policies, police in schools, and High-stakes testing) are direct causes of students Dropping out of school and, subsequently, committing crimes which lead to their being arrested. Most authors refer to either the school-to-prison pipeline or the prison-industrial complex, but there is a recent trend of authors describing the school-to-prison pipeline as feeding into the prison-industrial complex.
Funding of the Immigration and Naturalization Service (INS) is increasing as about a total of $4.27 billion was allotted to the INS in the 2000 fiscal budget. This is 8% more than in the 1999 fiscal budget. This expansion, experts claim, has been too rapid and thus has led to an increased chance on the part of faculty for negligence and abuse. Lucas Guttengag, director of the ACLU Immigrants' Rights Project stated that, "immigrants awaiting administrative hearings are being detained in conditions that would be unacceptable at prisons for criminal offenders." Such examples include "travelers without visas" (TWOVs) being held in motels near airports nicknamed "Motel Kafkas" that are under the jurisdiction of private security officers who have no affiliation to the government, often denying them telephones or fresh air, and there are some cases where detainees have been shackled and sexually abused according to Guttengag. Similar conditions arose in the ESMOR detention center at Elizabeth, New Jersey where complaints arose in less than a year, despite having a "state-of-the-art" facility.
The number of undocumented immigrants in the U.S. is over 12 million in total. Those that argue against the PIC claim that effective immigration policy has failed to pass since private detention centers profit from keeping undocumented immigrants detained. They also claim that despite having the incarceration rate grow "10 times what it was prior to 1970", "it has not made this country any safer." Since the September 11 attacks in 2001, the budget for Customs and Border Protection (CBP), and U.S. Immigration and Customs Enforcement (ICE), have nearly doubled from 2003 to 2008, with CBP's budget increasing from $5.8 billion to $10.1 billion and ICE from $3.2 billion to $5 billion and even so there has been no significant decrease in immigrant population. Professor Wayne Cornelius even argued that it is so ineffective that "(92-97%)" of immigrants who attempt to cross in illegally "keep trying until they succeed," and that such measures actually increase the risk and cost of travel, leading to longer stays and settlement in the US.
There are around 400,000 immigrant detainees per year, and 50% are housed in privatized facilities. Over half of the prison industry's yearly revenue comes from immigrant detention centers. For some small communities in the Southwestern United States, these facilities serve as an integral part of the economy. According to Chris Kirkham, this constitutes part of a growing immigration industrial complex: "Companies dependent upon continued growth in the numbers of undocumented immigrants detained have exerted themselves in the nation's capital and in small, rural communities to create incentives that reinforce that growth." A study by the ACLU says that many are housed in inhumane conditions as many facilities operated by private companies are exempt from government oversight, and studies are made difficult as such facilities may not be covered by a Freedom of Information Act.
- Convict lease
- Prison abolition movement
- Federal Bureau of Prisons
- Incarceration in the United States
- Kids for cash scandal
- School-to-prison pipeline
- Critical Resistance
- Angela Davis
- Mentally ill people in United States jails and prisons
- List of U.S. states by incarceration rate
- List of countries by incarceration rate
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