NCPA - National Center for Policy Analysis

Crime: Costs And Savings

May 9, 1996

The costs of the 49 million crimes and attempted crimes against Americans each year are staggering.

A recent report from the National Institute of Justice advances some eye-popping figures.

  • Crime costs Americans some $105 billion each year in medical bills and lost earnings.
  • Adding pain and suffering, as well as the reduced quality of life, the total climbs to $450 billion each year -- roughly $1,800 for each man, woman and child in the country.
  • Violent crime -- including drunken driving, child abuse and arson -- accounts for $426 billion of the total, with property crime accounting for the remainder.
  • Compensation to crime victims from insurers is $45 billion annually.

The figures do not include the cost of running the criminal justice system or private actions taken to cut crime -- such as hiring guards or buying security systems.

  • Violent crimes consume 3 percent of all U.S. medical spending and 14 percent of all injury-related medical spending.
  • Violent crime causes wage losses equal to 1 percent of all American earnings.
  • Criminologists are fast coming to the conclusion that incarceration is cheaper than letting repeat offenders back onto the streets. With the typical arson costing an average of $54,000 per victim and an assault costing $31,000, it is cheaper to keep the criminal in jail at an average annual cost of $25,000 to $30,000.

Research shows that those who are jailed for violent or property crimes tend to be repeat offenders. So locking them up tends to reduce their crime rate.

Experience in Texas serves as an illustration:

  • In he 1980s, crime there jumped 29 percent -- peaking a eight crimes for every 100 people.
  • Following a massive prison-building spree, crime has dropped to 5.6 per 100 citizens -- the lowest since 1973.

Some criminologists -- even those who don't necessarily believe in decriminalizing drugs -- believe nonviolent, first-time drug offenders should get reduced sentences -- including a mix of fines and house confinement -- so as to direct resources toward violent criminals and those who commit property crimes.

  • Currently 21 percent of state prisoners nationally are serving time on drug charges -- up from 8.6 percent in 1986.
  • The proportion of drug offenders in the federal prison system is even higher -- 60 percent.
  • Meanwhile the percentage of violent felons in prison has dropped from 54.6 percent to 46.5 over the same period.

Source: Perspective, "Crime's Cost," Investor's Business Daily, May 9, 1996.


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