Professor Clites teaches at Tusculum College in Tennessee.
It is often asserted that poverty causes crime. I suggest that crime causes poverty.
Obviously crime victims are made worse off when they are burglarized or mugged. But there are many other people who are made worse off indirectly by crime.
A high crime rate will drive businesses out of a neighborhood. This eliminates both availability of products and services and a source of jobs. Further, those who do stay find it necessary to charge higher prices to offset losses due to thievery and higher costs of both security measures and insurance premiums—if insurance is available at all.
Property values are driven down by a smaller demand because of the greater difficulty potential purchasers have in obtaining mortgage loans.
The loss of productive activity by those who live by preying on others reduces the output of the area in which they live. Thus, crime injures economically both direct victims and others in the crime-ridden neighborhood.
Just as all people are better off in a society where a large portion of people are more educated and more productive, all people in a crime-infested area become worse off than they otherwise would be.
It is not just others who are adversely affected by criminals. Perpetrators themselves lose ground economically. A large portion of people charged with criminal activity are relatively young. Their criminal behavior harms them in several ways. They may spend time incarcerated when they could have been gaining employment experience. Their criminal record may hamper them in obtaining future employment. They develop attitudes and habits that are detrimental to participation in the workplace. For these reasons many criminals condemn themselves to poverty.
Crime is a major cause of poverty.