The Economic Impact of Bad Bail Reform

The Economic Impact of Bad Bail Reform
by Eric Granof
Vice President of Corporate Communications for AIA Surety

(This article was original published in the California Political Review on 1/6/2023)

Over the past decade we have seen a variety of soft-on-crime policies enacted throughout the nation that has not only made our streets less safe, they have placed an unnecessary and devastating financial burden on our small businesses and communities.  They have all been based on several assumptions by advocates behind the changes.  First, that generally people are good and that they will come to court without someone, such as a private surety bondsmen, watching over them.  Second, that more criminals can be released from jail without having an impact on public safety.

The subsequent reforms have included everything from "zero bail" policies to the defunding of law enforcement and reducing certain felony offenses to misdemeanor offenses.  The results have been disastrous and have created a vacuum that has allowed gangs, organized crime and career criminals to step in and fill the void created by these policies.

 

According to the well-known laws of physics, for every action, there is an equal and opposite reaction.  This scientific law also holds true in criminal justice policy.  The only difference being when a crime is committed in a community, the force and reaction to that crime in not merely equal, it carries the potential to become far greater.  In fact, for every crime that is committed, there is the significant possibility of a cascading and magnifying domino effect that not only impacts a community socially, but economically, as well.

 

These bad criminal justice reforms have been turned on their head, either through design or by the chaos that has ensued.  In some jurisdictions, progressive district attorneys have decriminalized certain felony offenses to ill effect.  As failure to appear rates have risen, more defendants have failed to show up for court without consequences and case backlogs have become unmanageable.  This has forced courts to more dismiss cases in an effort to prevent the collapse of the criminal justice system.

 

These factors have led to one of the worst crime waves this country has ever seen. According to the FBI, the number of murders increased by 30 percent in 2020 -- the single greatest one-year increase in history, as reported in an NPR story.

 

As the assumptions underpinning bail reform proposals have not been realized, reformers have refused to admit that anything is amiss. Yet, in addition to violent crime, retail theft has also increased substantially.  This can be attributed to the decriminalization of a long list of felony crimes, as well as the raising of shoplifting thresholds.

 

Since 2000, at least 40 states have increased their felony thresholds for retail theft, according to the U.S. Chamber of Commerce.  As a consequence, retail crime has gotten so bad that the organization addressed Congress in a letter this past March, pleading with them to do something about it.   Both Target and Walmart have stated that shoplifting is at historic highs and is impacting decisions over whether stores can remain open.

 

In addition, the National Retail Federation conducted a study on organized retail crime across the country that showed nearly two-thirds of retailers experienced an increase in the average value of organized retail crime cases, with 75 percent reporting an increase in retail theft at their company in the past 12 months.

 

According to Burt Flickinger, Managing Director of the retail consultancy Strategic Resource Group, “for every $330 worth of products stolen, a retailer has to sell an incremental $300,000 worth of goods to break even.”  Consequently, the increase in crime has a direct impact on retailers.  Not only must they increase sales to make up the losses, they must also invest additional time and money in updated security systems to prevent further loss.  Of course, these extra costs eventually get passed along to consumers.

 

Proponents of bail reform often make the argument that simple theft has been overblown as a criminal justice issue.  They argue that a plumber who has tools stolen can simply purchase another set.  The person who stole the tools?  They were probably just trying to feed their family.  That line of debate is deeply flawed for a fundamental reason: there is no such thing as a victimless crime when it comes to theft, not even property crime.

 

The simple theft of someone’s tools can have an enormous cascading economic impact on an entire community.  In our plumber scenario, when tools are stolen, an insurance claim may be required and eventually the plumber must buy new tools.  This takes time and costs money.  Most likely the plumber’s insurance rates will increase because of the rise in claims or their policy may be cancelled altogether and the plumber forced to find new insurance.  The plumber may also be forced to buy a security system to protect the new tools.  These added costs force the plumber to increase fees, making the business less competitive.

 

Meanwhile, the customer the plumber was supposed to help that day is upset and has posted a negative review online telling others to stay away from this particular individual.  The plumber loses business and eventually must close down for good.  Because of the general increase in thefts, insurance rates for all plumbers increase.  Those costs are passed on to customers.  Eventually, more plumbers close up shop, leaving fewer options and resources for the public.

 

This economic domino effect is now playing out in real-time across the country as businesses decide to close due to the fact of unsustainable shoplifting claims or unsafe work environments.  The effect of rising crime is something that is never discussed when soft-on-crime policies or decriminalization strategies are promoted and subsequently passed by state legislatures.  Over time, these policies can be catastrophic to both small businesses and the communities that rely on their tax dollars for crucial services.

 

There are growing numbers of retailers, big and small, who have experienced this phenomenon over the past 24 months.  Walgreens, CVS, Home Depot and Starbucks are among the major chains that have closed down certain stores due to increases in crime in local neighborhoods.  These communities are now left without important resources such as access to healthcare, medicines and groceries.

 

So how much economic impact does crime have on our communities?  This is a question that is not easy to answer.  Researchers use different approaches when approaching both the collection of crime data and the translation of that data into costs.  According to studies from economics professor David Anderson of Centre College, the cost of crime has increased substantially over the past few decades.  In 1999, based on an estimated 49 million crimes committed, the total cost of crime in the U.S. was estimated to be $1.7 trillion.  In 2017, based on 120 million crimes, the cost of crime had increased to $2.9 trillion. And in 2021, his most recent study, the total cost of crime had escalated to a mind-boggling $4.9 trillion.  These numbers are not sustainable and stand in stark contrast to any alleged cost savings that bail reform measures purport to offer.  It is also important to note that such measures are nearly always only decriminalization strategies, rather than implementations of actual reform.

 

A misguided approach to criminal justice and the subsequent lax policies implemented by lawmakers across the country have landed us in the grim situation we are presently facing.  Not only are citizens living in fear for their safety, we are facing economic hardships that will bankrupt our communities.  It is time for our elected officials to take a step back and reassess the effectiveness and cost of these failed policies.  The parties responsible must be held accountable for the decisions they have made that have laid waste to the finances of businesses and communities across America.


To see the original article CLICK HERE.


Eric Granof joined AIA in 2009. as Vice President of Corporate Communications, Eric is responsible for both internal and external communications across the organization. As part of his responsibilities, Eric drives a number of marketing initiatives for the company including the development of new service partnerships with groups like Staples, TLO, and Inkhead, creating new marketing programs like ExpertBail and providing consulting and guidance to AIA’s family of agents in the area of marketing. In addition to his corporate communications responsibilities, Eric is also Managing Director and Chief Marketing Officer for the ExpertBail Network.

 

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