"For one thing, most of our very poor don't work, which makes it hard to exploit them." - Paul Krugman
It probably doesn't benefit "the rich" but it sure benefits those specific businesses relying on cheap labour with an interest in driving its cost down.
It also benefits those getting very rich indeed from the illegal drug trade, like JFK's Father did when alcohol was an illegal drug (which is what bootlegging is after all, drug running/pushing where the illegal drug was alcohol). Such people care little for the social consequences of gaining their wealth.
The illegal drug trade also entrenches corruption in politics and legal system. Such corruption and the acceptance of it does not work in favour of those without resources. Those with resources and flexible morals it does benefit.
Reduced supply raises prices. If more of the poor were in the labor force, employers would more easily find replacement workers.
I suppose you (and the other two commenters) are right that the war on drugs benefits a small number of wealthy people at the expense of the rest of them. But overall it's a negative sum game - bad for the rich and poor alike.
With respect, I'm sure you have that price pressure exactly backwards.
The war on drugs is an absolutely unmitigated disaster on a global scale from start to finish. The sooner it is ended the better. Those with vested interests in the current normal practice of the political system will perceive any change to how things are done in Washington or wherever as a threat. Scare campaigns seem to get you elected, opposing them seems to ensure you won't get elected. Running on a "stop this utter insanity making us weak and vulnerable" campaign of ending the war on drugs will likely get an almighty scare campaign run against them (think of the children!) Many vested interests eg lobbyists will support that campaign to keep the political status quo as stable as possible. (Some individuals will always do what they actually think is right, even when it is against their interests). I hope to see that scare campaign fail one day. Maybe some cracks are showing?
Past a certain level of wealth more money has no meaning at all, Soros, Koch, Gates, Buffet and a large number more people have more money than they can ever spend. More power and influence does have meaning to them, be it altruistic or ego driven or whatever.
The labor force is people who are working or seeking work (the BLS can give you a precise definition). Most of the poor do not fall into this category (see another reply of mine in this thread for data).
Everything you describe is what would happen if the poor were willing to compete on price for work. The fact that they are not doing so is what pushes wages up.
What about people in upper-middle-class office jobs who spend the vast majority of every day in their office browsing Reddit?
What about people who do work, but who go into their workplace with a terrible attitude and end up failing to provide the service customers pay for?
These are three types of people that you can also observe, if you look hard enough, and they are not always destitute. They also (arguably) don't work - just having a job or money in the bank doesn't mean you contribute your fair share to society. Granted these observations alone, which are just as hard to quantify as the Krugman quote above, it's hard to say that the war on drugs (or the war to put poor people into prison, whichever name you prefer) does not exploit lower-class people. If there are always people who don't work as much as others would like them to, there's nothing theoretically different about people born into different social strata.
So, the Krugman quote above is almost reprehensible, and I also don't believe it's backed by data. For instance, a full-time federal minimum wage worker makes $15,080 a year. This is enough to live above the poverty line if you only support yourself, but not even close to enough to support a spouse and even one child (http://poverty.ucdavis.edu/faq/what-are-annual-earnings-full...). How can you possibly say that people who try and support their families on a minimum wage salary are mostly lazy bums who don't work?
I would like to see how Krugman backs up his argument. Data is always welcome.
That would indeed be a silly thing to say.
Data is always welcome.
Work habits: http://www.bls.gov/cps/cpswp2012.pdf
Disposable income: http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs...
Consumption: http://www.bls.gov/cex/22013/midyear/income.pdf