The Digital Skeptic: How the Web Puts Ex-Cons Back Behind Bars

RYE, N.Y. ( TheStreet) -- Drahcir Parson is, yet again, just hours away from breaking the law.

"I was going to get a package to deal drugs to survive," Parson told me and about 80 others at a remarkable meeting here in Westchester. All are connected by the New York Theological Seminary's Master of Professional Studies program, an accredited postgraduate educational organization that aims to take career criminals and give them legitimate careers.

"But now, here with you, I am saved for a week," Parson said.

Nobody here blames Parson. They know the long odds he faces. More than half the men here are just like him: felons. Many have done serious time at prisons such as the Eastern Correctional Facility or Woodbourne Correctional -- and even the big house, Sing Sing in nearby Ossining. These are part of a sprawling national network of correctional facilities, some managed by large, privatized facility operators including the Corrections Corporation of America ( CXW) and The Geo Group ( GEO).

(Full disclosure: I am donating time to a new spinoff program that teaches software coding and Web development to those related to this masters program.)

Parson is no dummy. This former street-level dealer got his GED during his first week in prison and earned an associate's degree from no less than Bard College while behind bars.

But this prison success story is struggling in today's take-no-prisoners digital age.

"An associate's degree just doesn't do it anymore," he told me. "There are no jobs.

What Parson is facing is not unique, say those who offer support and training to worthy ex-inmates. Julio Medina is the founder and executive director of the New York-based Exodus Transitional Community, which offers support services for hundreds of newly released prisoners every year. He told me there was a time trained ex-inmates such as Parson could at least land menial entry-level jobs doing business basics such as bookkeeping or data entry.

But in today's fast-moving, race-to-the-bottom digital economy, disruptive, market-crushing software and Web services have bled such opportunities from the job market.

" QuickBooks took all those bookkeeping jobs away," Medina said.

Medina was a former drug dealer, then a guest of first lady Laura Bush at the 2004 State of the Union address, and is widely seen in this community as a role model for inmates transitioning to becoming law-abiding citizens. He says the digital economy has put fresh pressures on worthy, reformed inmates who struggle to find the means to master the education needed to stay competitive.

"Complex high-tech skills are hard to teach, even to prisoners with a lot of time on their hands," Medina said.

And shockingly, what this all means, friends, is that a grim -- but lucrative -- upside lurks around the Drahcir Parsons of the world. The large private prison operators are going to make out like bandits.

Big money behind bars
It's no investing secret that the business of selling into America's love affair with law and order has peaked. Yes, the U.S. is the global leader in incarceration, with more than 2.2 million people behind bars. That's a 500% jump over the past 30 years, according to the Washington, D.C.-based Sentencing Project. But for reasons nobody can exactly explain, jail populations have peaked and private prison operators such as the Corrections Corporation are beginning to feel the pinch as governments cut back prison funding.

"We think this environment where limited funds are being appropriated for new capacity is going to continue here for the near term," is how Damon Hininger, president of Corrections Corporation, summed up the declining market on an investor earnings call last February.

Jails aren't my thing. But clearly everybody involved is missing the larger digital age point. After seeing firsthand the challenges prisoners face -- even smart, trained and motivated ones such as Parson -- Hininger and skeptical prison operator investors have absolutely nothing to fear.

For every Parson who is lucky enough to have a room full of people pulling for him, there are millions more who don't. And considering what a brutal race to the bottom our economy has become, finding paying work after jail will get tougher and tougher for inmates returning to the world.

That means they won't last long out here. Like some Charles Dickens' Fagin 2.0 who gets paid to keep prisoners prisoners, jails will be as good a business as any in the digital economy for a long, long time.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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