An idea you probably will never think about

This is not a “normal” idea you may hear about anywhere else and you may even think I’m crazy about such an idea. Indeed, this is especially unusual. OK, enough pre-warning  before I start the story.

 

I have recently read a report regarding a crisis happening in Japan. It is kind of bizarre situation that related to the famous Japanese aging problem. We all know that Japan is probably the most aged country with nearly one third of its population over 65 years old. There are many problems associated with aging populations but one big problem that Japan is witnessing is probably beyond anyone’s expectation: crimes committed by elder people. So you may ask, what’s the  big deal about the elderly criminals? Well, it is nothing unique that there are elderly criminals but the increasing trend that more and more elderly are arrested for crimes in Japan has reached a crisis point: 10 years ago, only less than 6% of criminal arrests in Japan were involving those 65 years or older. But now, it is 20%! Almost 4 times more increase in the last decade!! So why such a drastic increase in Japan with elderly criminals? I’m pretty sure the sociologist can come up with many reasons but one important aspect is certainly the financial stress the Japanese elderly are facing. It is reported that the average income for Japanese workers 65+ is less than $30,000 and they also don’t have much to save for their retirement. As such, prison has become a better place to stay for many elderly because at least they can have a room to sleep, have meals to eat and even have free medical checkups and treatment if needed. No wonder the story further goes with the fact that among those elderly criminals, 70% will commit crimes again within 5 years. Prison just becomes a better place for them.

 

Then you will certainly ask why this is anything relevant to the US? Well I can say we have some quite similar characteristics with respect to the elderly population in the US. We all know that the US baby boomers are entering the elderly ages, fast! We also know that the US economy as a whole in the past decades is going down also fast! The average income for the US elderly income, while I don’t have the exact stats, won’t be much better than the Japanese counterparts and we also know the average income as a whole is trending down in the past decades. Then the shock reality is that American baby boomers are notoriously bad savers and Half of American Baby Boomers Face a Frightening Retirement Reality: But There's Worse News Incoming! When you put all these together, do you see some similarity between the Japanese vs the American elderly in terms of their financial situation? I do and actually we are already seeing some frightening uptrend regarding the US elderly crimes: Between 2007 and 2010, the number of state and federal prisoners age 65 or older grew 94 times faster than the overall prison population. Between 1981 and 2010, the number of state and federal prisoners age 55 and over increased from 8,853 to 124,900. By 2030, that number is projected to grow to 400,000, an increase of 4,400 percent from 1981.

 

So if this trend continues, who will be the logic beneficiary? The prison facilities, right? If you are not aware, there is a dual system in the US that while the majority of prisons are managed by the governments, private prisons are also a vital player in housing criminals. With the Trump’s administration very much focused on cutting down the government budget as much as possible, I think the private prisons will become more and more important in the US legal system and they may even be thriving moving forward, when the demand may increase fast! Believe or not, the prison stocks have already jumped high since Trump’s winning and The GEO Group, Inc. (GEO) is one of them that has doubled since Nov last year. It is not cheap for sure at the current price but longer term, I think GEO will have much brighter future. Keeping GEO in your watch list may be a good idea!