Uncovering the Hidden $372 Billion Cost of Our Criminal Justice System

We all know getting entangled in the criminal justice system leads to serious consequences. But few among us really understand that the slightest brush with the law bears an even stricter potential sentence – a lifetime trapped in an inescapable cycle of poverty.

A new report from the Brennan Center for Justice at the NYU School of Law shows that $372 billion in earnings are lost in the United States each year for those who have a criminal conviction or have spent time in prison. That is enough money to close New York City’s poverty gap 60 times over.

While it is no secret that our criminal justice system has economic implications for those who serve time, we now understand just how devastating those impacts are. Time in prison slashes annual earning potential in half, which results in a loss of nearly half a million dollars over the course of a career. But if you are a person of color, these gaps widen even more dramatically. Blacks and Latinos who have a prison record experience a nearly flat trajectory in earnings after imprisonment, while their white counterparts’ earnings climb steadily across a lifetime.

These findings have enormous implications for the U.S. economy. More than 7 million people living in the U.S. have served time in prison and more than 45 million, and well over a tenth of all Americans, have been convicted of a misdemeanor, such as shoplifting.

These lost earnings impact the entire country, and they disproportionally drain resources and wealth from communities of color. Blacks are jailed at more than triple the rate of whites, and nearly half of all people serving effective life sentences are Black. This overrepresentation exacerbates an already disturbingly wide racial wealth gap that sees the median white family holding 10 times the wealth of the median Black family.

Even more telling are the racial disparities that extend outside of the criminal justice system. According to the same study, white people with a criminal conviction earn more than socioeconomically similar Black people with no criminal conviction. Being Black in America is enough to hold you back – with or without a criminal misstep.

As an advocate for fighting poverty and increasing economic mobility, the non-profit I head, Robin Hood, have long been committed to investing in solutions that reduce criminal activity, provide alternatives to incarceration, and expand opportunities for people in the justice system. But we also know that America needs to do more to address the structural barriers and inequities that have turned criminal justice involvement into a lifelong economic battle for millions of Americans.

We need our lawmakers to shrink the size of our criminal justice system by reducing penalties, reclassifying some felonies as misdemeanors, and decriminalizing other offenses. We need to provide more funding for robust drug and mental health treatment options that could prevent people from falling into the criminal justice system. We need employers to eliminate unnecessary barriers when applying for jobs by adopting “ban-the-box” rules that defer criminal record inquiries in the hiring process and intentionally hiring people with criminal records to provide that second chance.

The loss of $372 billion is an unimaginable cost for society to shoulder every year. The opportunity costs for our neighbors and communities are even higher; imagine what low-income communities could look like if those dollars remained in circulation. The systemic inequities of our criminal justice system are glaring, and we cannot continue to turn a blind eye.

We must continue to call to reform our criminal justice system. This will enable us to begin to chip away at a centuries-old system that has shackled people far too long after their sentences have been served and, in the process, we might just restore justice as well.