Comment by bilbo0s | Hacker News Reader

Comment by bilbo0s | Hacker News Reader

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Back in college I used to do odd programming jobs for local companies to make ends meet. (It was basically contracting, but I was too young to know that at the time.)

Anyway, one of the jobs I did back then was to move a Paradox db to Access. (Yes, this was a LOOOOONNNNGGGGG time ago.) It was for a company that provided goods to jails around the state for the commissaries, as well as providing food for the inmates meals. I recall doing double takes at the prices that they were charging for some of the things they were "selling". A simple small bag of Cheetos would be marked up 5 or 6 hundred percent. Sanitary goods might be marked up a thousand percent. The list went on and on. It was crazy. And it was, most likely, VERY good money for that firm.

I don't know if they have gotten rid of those firms, but that is one place where A LOT of money was being made at the time. The more prisoners there were, the more money that company would make. Because the prisoners would buy these goods from the commissaries at ENORMOUS markups.

Not only that, but I always thought there was a HUGE potential externality built into that business. I mean, this is just speculation, but let's suppose companies like this supply prisons as well as jails. Well you could have a prisoner that is allowed to buy Cheetos and Snickers bars and sit around and get obese for his 30 year term. Only at year 20 he comes down with diabetes, or heart disease. (Not surprising.) And the tax payer is actually stuck with the bill for the medical care for the last 10 years, even though those companies made all the money off of selling the prisoner the Cheetos that contributed to the heart disease.

That job really was eye-opening for me.

What should the markup be? What you say sounds very high indeed, but there is a certain markup that will be required. Why? Operating a commissary in a prison is more complex than a local convenience store

(I'm making some assumptions here) each bag of Cheetos needs to be individually inspected to make sure that nothing is being smuggled into the prison. This would go for every item being sold into the prison.

It would be interesting to see what would happen if there was competition in selling into prisons, but my guess is you'd end up with some kind of split duopoly at best where things would be about the same as they are now. The reason is that no one can just establish a new business, which is the most important thing for creating competition.

>Operating a commissary in a prison is more complex than a local convenience store

Why so? Here they just got a few pallets of normal grocery store stuff and mostly used inmate labor to run it.

Really simple and costs essentially nothing to operate, especially since they don't have to be open every day.

The only complexity comes from potentially transporting the inmates to the commissary, but that's not a particularly efficient way to do it when you can just give inmates paper "menus" where they can just fill in their orders and have them brought to their cell blocks.

The reason (the only reasonable one o can come up with) is the added cost of inspection before selling them.

I don't disagree that the mark up mentioned in the post was extreme, but I don't have a good idea of what it would be otherwise.

Based on my having visited places with high tariffs, or a difficult place to deliver things (top of a mountain) you definitely see large markups. Not 6x, but 2x-3x isn't uncommon.

> the added cost of inspection before selling them.

I wouldn't expect the supplier to bear this cost; it's the jailers who are doing the inspecting.

> or a difficult place to deliver things (top of a mountain) you definitely see large markups. Not 6x, but 2x-3x isn't uncommon.

But surely they aren't charging 2x-3x more because they need to make profit, but because it's justifiable for them to charge 2x-3x more (mostly due to lack of competition).

However, profiting from prisoners by exploiting artificially restricted competition seems rather unethical to me.

It depends on the goods. Snickers and Chips really Are luxury items, even on the outside. But if you sold those at the same prices, you'd get in trouble for price gouging. More, maybe 5-10% extra. Security costs are part of running a prison, and should be looked at as such. I'd even argue that having some of this stuff occasionally helps keep morale better.

But hygiene items? Tampons or pads, shampoo, soap, toothpaste, and other such things shouldn't cost any more than they do on the outside. I'd argue that these things, at a basic level should be free and one can pay for higher quality items unless medically necessary. As far as we understand, being clean helps folks stay healthy.

Explain the ursurious telephone rates under your "complexity" theory!

Contractors aren't responsible for security -- that's a threat to their margins and to the corrections Union.

The reality is that prisoners are just seen as a mark. Inflated goods bring more money into the prison, because inmates don't make enough to buy $8 Cheetos. So relatives wire money in through some scammy system. Often the prisons get commissions for these types of sales as well.

I'm not a bleeding heart for prisoner luxury. But I hate seeing people getting ripped off by profiteers.

As someone who used to x-ray bags of chips I see which had prizes in them - you can screen stuff pretty damn fast for very low cost. You can just image the whole box the stuff is shipped in. However this assumes the contraband has a higher density than chips. I'll bet the markup was to cover the cost that was charged to have the shop in the first place. I'll bet that the prison shop has a very high rent/lease.

> What should the markup be?

Allow competition and let the free market decide.

Free market in prison products sounds like an oxymoron

I bet the jails were getting kickbacks, legally or illegally.

It's possible, but either way the same abuse would be occurring. It happens for the same reason Tylenol is charged at like $60/pill during a hospital stay, and while we're at it the same reason the criminal justice system is so out of control: These people don't answer to anyone. Nobody is going to stop them. Talk and dream all you want about voting corruption away, it is not going to change. The system is too entrenched, and there are too many powerful people that have too much to lose to ever let it happen.

"Tylenol" doesn't charge "$60", the hospital does, to cover the cost of the time spent of the nurses' shifts medicating patients. (Not to mention the various other huge (legitimate!) types of overhead a hospital has.)

> "Tylenol" doesn't charge "$60", the hospital does

That is what I stated. And band-aids are roughly the same price per instance. And there are also staff-related line items. And there is a completely separate EMT bill if you are transferred from the scene of an accident.

A stay of about 16 hours with no procedures, just a transfer by EMT, a few bandages and Tylenol, with about 30 minutes total of staff interaction was billed at almost $15,000.

There are absolutely "legitimate" charges involved, and there is a markup that would be considered legitimate, but there is also a lot of abuse that goes straight to overpaid doctors, overpaid hospital administrators and insurance companies, in the same way prison's are charged 6x or more for miscellaneous items.

Legitimate charges would be listed as legitimate line items, not hidden in other marked up line items.

The problem is not be $15 bottle of Tylenol. It's that itemizing hospital services is a total fiction given the necessity of hospitals subsidizing those who cannot pay by overcharging those who can pay.

Tylenol is $60 per pill not because of profiteering but because of cross subsidization. They mark that pill up to cover loses in other areas.

just got to give them more to lose otherwise, that's how it works.

That is sad. Companies should not be able to profit off of people like this. This is why we need someone like Hillary. She should be able to put an end these corrupt government programs.

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