Lost Earnings and Additional Costs Add Up for Families with Incarcerated Loved Ones

WASHINGTON, D.C. – A groundbreaking report released today by FWD.us reveals that mass incarceration is costing American families with incarcerated loved ones a staggering $348 billion annually in lost earnings and out-of-pocket spending. The new report, We Can’t Afford It: Mass Incarceration and the Family Tax, includes research conducted in partnership with Duke University and NORC at the University of Chicago. It provides the first-ever comprehensive accounting of what incarceration costs families on the outside.

“In an American era rightly concerned with economic precarity, this report identifies mass incarceration as one of the key drivers of the affordability crisis,” said Zoë Towns, Executive Director at FWD.us. “As the data makes plain, mass incarceration is a pocketbook issue that's preventing millions of Americans from climbing the economic ladder, stripping money from the bank accounts of households who are already living paycheck to paycheck, and creating lasting consequences for family budgets and local economies.”

FWD.us conducted this research in collaboration with an advisory council of notable experts on economic and criminal justice policy, formerly incarcerated leaders, and prominent voices for common-sense reform, such as Professor Bruce Western, economist Jeff Korzenik, and Academy Award-winning artist John Legend, among others.

Among the report's key findings:

• When a loved one is incarcerated, their families face immediate financial shocks— not only from sudden changes in household expenses, but also from the loss of income the incarcerated person would have earned, totaling $6.7 billion annually.
• Families with incarcerated loved ones spend an average of nearly $4,200 per year supporting them. That is more than 27% of the income for a person living at the federal poverty line. These expenses include everything from paying to stay in touch with and visit family members to caring for minor children of incarcerated parents to paying for commissary items marked up as much as 600% above retail cost.
• One in five family members reports experiencing a decline in their income when a loved one is incarcerated, losing an average of $1,803 per month, roughly the equivalent of a typical U.S. mortgage payment.
• Housing instability is a common consequence of a family member’s incarceration, with 1 in 5 families forced to move when a loved one is incarcerated. For children of incarcerated parents, the impact is especially severe—18% experience homelessness.
• Black family members pay 2.5x more than white family members ($8,005 vs. $3,251) annually to support incarcerated loved ones, reflecting both disproportionate incarceration rates and deeper financial commitments to staying in touch and supporting family members behind bars.
• The financial impact persists long after incarceration ends, with formerly incarcerated people experiencing reduced earnings of $111 billion annually. Even more devastating, children of incarcerated parents suffer $215 billion in lost annual earnings—an average loss of $4,468 in income for each child every year of their adult life.

“This country stands at a crossroads on justice: turn backwards towards increased criminalization and more prisons, or continue down a hugely successful and broadly-backed criminal justice reform path. We hope this research provides another reminder of the high costs of incarceration and the opportunity waiting for us on the other side of reform,” added Towns. 

This research builds on previous work by FWD.us showing that 1 in 2 American adults—approximately 113 million people—has had an immediate family member incarcerated.

Today’s report goes further by quantifying the staggering financial burden that incarceration places on families with incarcerated loved ones.

John Legend, artist and activist: “We’ve heard the stories. Now we have the numbers. This research confirms what we’ve seen through our work at freeamerica: incarceration doesn’t just harm individuals. It ripples through families, communities, and entire neighborhoods, draining resources and holding back progress. If we want a stronger, more just society, we need to invest in people, not punishment.”

Jeff Korzenik, author and economist: “The economic data in this report should fundamentally change how we view America’s criminal justice system and our economy. The red and blue jurisdictions that have advanced safe and effective reforms that reduce our country’s reliance on incarceration provide a roadmap that our businesses and budget writers simply cannot afford to ignore.”

Yumeka Rushing, Chief Strategy Officer at the NAACP: “This report provides critical new evidence of what Black communities have long understood—mass incarceration widens the racial wealth gap. These aren't abstract statistics—they offer a glimpse into why many working families are trapped in cycles of poverty. Economic justice, racial justice, and criminal justice reform are inseparable goals.”

Bianca Tylek, Executive Director of Worth Rises: “This report confirms what families have long known: criminal punishment isn’t confined by prison walls. The cost of incarceration weighs heavily on families. It extracts billions from the pockets of loved ones through a vast network of predatory services—from costly prison calls to inflated commissary prices. These are not incidental expenses; they are the byproduct of a system designed to profit off of human caging. If we’re serious about economic justice, we must dismantle the financial infrastructure of mass incarceration.”

Andrea James, Founder and Executive Director of The National Council for Incarcerated and Formerly Incarcerated Women and Girls: “When mothers are incarcerated, the economic ripple effects are particularly severe. I see grandparents depleting retirement savings to raise grandchildren, families going into debt just to stay in touch, and kids who fall behind in school. The nearly $350 billion that mass incarceration costs families is a burden that falls disproportionately on women and children, many of whom are already struggling financially and will now face a lifetime of economic hardship.”

Bruce Western, President-Elect of the Russell Sage Foundation: “The research is clear: incarceration creates a deep economic disruption that can extend far beyond the individual being punished. The alarming evidence of lost earnings for children of incarcerated parents indicates a significant driver of intergenerational poverty in America. This isn't just about today's costs—it’s about diminished economic mobility for generations to come.”

Jose Saldana, Director of the Release Aging People in Prison Campaign (RAPP): “After spending nearly 40 years in prison, I know all too well that every person behind bars represents a family on the outside bearing enormous financial and emotional costs. The longer people are incarcerated, the heavier that burden becomes. These are life sentences of economic hardship on entire communities—and we cannot afford to continue down this road.”

Norris Henderson, Founder and Executive Director of VOTE and Voters Organized to Educate: “As someone who spent 27 years incarcerated at Angola, I've lived through the economic devastation of mass incarceration. When I came home from prison, my family had to rebuild from nearly three decades of financial loss. Multiply that struggle by millions of families, and it becomes clear why the communities suffering from high rates of incarceration cannot break cycles of poverty.”

View the executive summary, full report, and video featuring family members with incarcerated loved ones, and learn more about We Can’t Afford It: Mass Incarceration and the Family Tax here.