Chapter 112 A Giant with a Trillion-Dollar Stake

These high-and-mighty heads of prestigious families had never expected the prison business to be so profitable.

They had all previously had their family asset management teams conduct professional evaluations of this business; they knew it could make money, but they hadn't expected it to be this lucrative.

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In their eyes, no matter how much pressure was applied, at most half of the prisoners would spend extra money to buy food, but the development of events far exceeded their expectations.

In just two short months, over ninety-five percent of the prisoners were spending extra money on food. From this item alone, they could earn two hundred dollars from each prisoner every month.

In addition, there were gang members and prisoners with wealthier families; these people had the money to consume better food.

Previously, they had no choice, but now that they did, these people naturally wanted to eat better food and thus spent more, especially since they had financial backing.

As long as gang members didn't betray their associates after being caught, they would be seen as loyal members. Shouldn't such people be given a few hundred dollars a month to eat a bit better?

Gang bosses were clearer on this than anyone; being able to live a decent life even after being thrown in prison was the only way to ensure their subordinates would willingly keep their mouths shut.

Add to that the bed fees—any prisoner who could afford it basically refused to stay in the large communal cells. That environment was truly unbearable for ordinary people, so the prisoners spent no less on this than they did on food.

And what was the bulk of prison expenses?

Over eighty percent of the expenses went toward purchasing food for the prisoners, while the remaining twenty percent covered the prison guards' salaries and the prison's utilities!

Now that the prisoners were paying for their own food and even spending extra on beds, not counting the three hundred and twenty dollars in government subsidies, the prison earned an average monthly net profit of over one hundred and fifty dollars per prisoner after expenses.

Once the prison factories began production, the prisons would be able to earn even more.

Take Clinton Prison as an example: it held nearly three thousand prisoners, with a current total monthly profit of four hundred and fifty thousand dollars, totaling a net annual profit of 5.4 million dollars.

It might not seem like much, but when you factored in the three hundred and twenty dollar monthly subsidy per prisoner from the government, the annual net profit of Clinton Prison alone could exceed seventeen million dollars.

This was net profit, and it was just the net profit of a single Clinton Prison.

There were a total of 2,433 prisons in America, with over two million prisoners serving time.

Calculating based on extracting four hundred and seventy dollars in profit per prisoner per month, the two million-plus prisoners across America meant an annual net profit of 11.2 billion dollars could be generated.

This was without the prison factories even being in operation; if they were, that figure would likely more than triple.

Such a staggering figure sent a chill even through the heads of super-conglomerates like Rockefeller, Morgan, and DuPont.

This was 1980, after all; currently, even the massive General Electric had a total market capitalization of only twelve billion dollars.

Earning the equivalent of two or three General Electrics in a single year—who the hell would have dared to imagine that?

Even someone as powerful as David Rockefeller was forced to sip his coffee to soothe the shock in his heart; these were things they had absolutely never expected before coming here.

Although he was pleased—after all, a child of his family held such a large share in this business—he couldn't help but curse up a storm in his heart.

He grumbled that this grandson was far too inconsiderate, not giving him a heads-up despite having so much time on the way.

The private prison business was actually far more profitable than Wang Xiuyuan had imagined.

In his previous life, America's three major prison management companies—Corrections Corporation of America (CCA), GEO Group, and Management and Training Corporation (MTC)—had a total of about one hundred and fifty private prisons in operation.

They held a total of 150,000 prisoners.

Yet these three private prison giants had a total net profit of over five billion dollars in 2022, with each prisoner creating an average monthly net profit of over 2,700 dollars for them.

This figure wasn't exaggerated at all. An ordinary worker in America earned between ten and twenty dollars an hour, with strict limits on overtime.

But the hourly wage for prisoners was only between 0.14 and 0.63 dollars; the difference between the minimum and the average hourly wage was more than fifty-fold.

Furthermore, the prisoners had to work twelve hours a day, with only a one-hour break for two meals, and no overtime pay.

Overtime pay? That was something for free people; prisoners' human rights were incomplete.

In other words, the wealth created by each prisoner's monthly labor could bring the prison management companies more than 2,700 dollars in profit.

Factoring in taxes, fixed prison expenses, lobbying politicians, donations, and greasing the palms of Human Rights Organizations, having only 2,700 dollars in net profit left per prisoner per month meant the three prison giants were actually quite poor at business.

But then, those three prison management giants didn't have powerful political and business backgrounds, nor had they secured the management rights for every prison in America.

The most important point was that the prisons under the three giants were too scattered and not numerous enough.

They couldn't effectively reallocate prisons based on the prisoners' sentences. For instance, with prisoners engaged in military production, some with short sentences would be released just as they became proficient in production techniques, which greatly reduced efficiency.

But if Wang Xiuyuan and his partners had a large enough number of prisoners under them, these problems could be solved.

Imagine a prison with three thousand prisoners, all of whom were serving sentences of ten years or more; these people could spend a year or two honing their skills, and for the remaining decade, they could focus entirely on production to make money for them.

In such a scenario, it would be difficult for Wang Xiuyuan and the others not to make money.

Additionally, there was the advantage in food procurement; the larger the quantity of food purchased and the longer the order duration, the lower the price they could negotiate.

The cost of food procurement alone would leave the three giants—CCA, GEO Group, and MTC—in the dust.

The three prison giants combined had only 150,000 prisoners, and their locations were far apart, making effective coordination impossible.

On Wang Xiuyuan's side, there were over two million prisoners, coordinated regionally by state. The three companies were effectively one family, an advantage that was beyond words.

Most importantly, there was the background of the shareholders. At most, the three giants—CCA, GEO Group, and MTC—had three to five members of Congress backing them.

The three companies formed by Wang Xiuyuan and his partners were closely linked, and the number of U.S. Senators and Representatives backing them could be counted in the hundreds.

With such powerful political connections, it was inevitable for their prison management companies to flourish.

CCA had a market capitalization of 2.1 billion dollars, GEO Group was at 1.8 billion, and MTC was unlisted.

In this life, with Wang Xiuyuan leading this business, if their private prison management companies were to go public, the market capitalization of each company could absolutely easily exceed a hundred billion dollars.

But their companies would never go public.

After all, none of the families present lacked money, and staying private meant they didn't have to disclose financial statements, avoiding the envy of other powers.

The shares of these three companies were like three golden geese that would continue to lay eggs and generate wealth; only a fool would take the companies public and share the fruits with others.