With overall violent crime rates falling nationally and fewer people getting sentenced to long stretches behind bars, private prison companies see a potentially catastrophic decline in demand for their services. Their response: diversify into everything from halfway houses to neighborhood check-in centers for drug offenders.
Over the past three decades, entrepreneurs and investors piled into the private prison industry, convinced that the thorny job of incarcerating criminals could be a lucrative growth business. No longer. Curtailment of harsh mandatory-minimum sentences and other changes in criminal justice policies have combined to reduce federal and state prison head counts to 1.56 million as of year end 2014, a 3 percent falloff.