The Economics of White v. Blue Collar Crime

The Economics of White v. Blue Collar Crime

Estimating the costs and effects of crime is important to authorities in the criminal justice system. Policymakers weigh the various costs posed by different crimes to determine which crime prevention measures have the highest priority. Researchers have tried different approaches in assessing the costs of crime. One approach has been to look at jury awards in civil suits. Juries in civil trials are often asked to determine the amount of money to be awarded to victims of crime.

White-collar crimes cost the United States more than $300 billion annually according to the FBI. White-collar crimes are fraud, bankruptcy fraud, bribery, insider trading, embezzlement, computer crime, medical crime, public corruption, identity theft, environmental crime, pension fund crime, RICO crimes, consumer fraud, occupational crime, securities fraud, financial fraud, and forgery. The tools of the trade are paperwork or through the computer performed by using paperwork or computers. White collar crimes go largely undetected.

White-collar crime consists of consumer fraud, tax swindles, insider trading, securities violations, corruption, bribery and kickback schemes, computer fraud, or corporate misconduct such as occupational health and safety offences. Business Against Crime, founded in South Africa in 1996 in response to an appeal by then president Nelson Mandela to business to help government in the fight against crime, estimates that white-collar crime costs approximately R40 billion per year.

With the increase of the assembly line effect, the cost of crime has risen dramatically over the years. One has to take into account all that goes into the criminal justice system. Estimates suggest that incarceration in the United States costs over $20 billion annually, with over 11 million new admissions a year. The cost of the victim also has to be taken into account. These are the major economic costs that go along with crime. They include; the value of property stolen or damaged, medical costs coming from injuries sustained, the cost of lost production from the victims job, the new preventive measures a victim and his family might take to protect themselves from further harm, and the economic costs caused by sociological problems. These problems that result from being a victim include a new fear, helplessness, loneliness, and a new aberrant behavior. In a study done by Gallup Polls, 50 - 55% of people said they were afraid to walk alone at night, 55% of people polled said they would become a victim of a crime in the future, and 25 - 30% surveyed said that the issue of crime is at the forefront of their minds . These numbers show how crime affects the common person.

Crime costs in all areas. If we have to pay for it all we eventually have to take away from other things. For every dollar we spend on fighting crime, we take away from other social services, which include but are not limited to, education, public health, and the infrastructure of roads and bridges. Ironically, crime funding may intensify criminogenic ...