According to a US study released in 2001 by Scott D. Camp, Ph.D. (Senior Social Science Research Analyst) and Gerald G. Gaes, Ph.D. (Director, Office of Research and Evaluation) entitled "Growth and Quality of US Private Prisons: Evidence from a National Survey," labor expenses represent 60 to 80 percent of the cost of operating a prison. The study states that when a prison wishes to save money, it will most likely cut wages, benefits and/or the number of staff.
"Advocates of prison privatization have argued that private prisons can pay workers less, offer fewer benefits, and still deliver a product that is as good as or better than that provided by the public sector. The evidence to date contradicts such an encompassing assertion," said the study.
The study investigated whether private companies could pay workers less, yet still maintain adequate employee skill levels. "To date, the overall answer to this question is no, but there may be instances of successes in the private sector that are deserving of closer analysis on a case-by-case basis," the study concluded.
In addition, the study showed that privately operated prisons appeared to have systemic problems in maintaining secure facilities, evidenced by the study's data on inmate escapes and random urinalyses.