Inflation’s Effect on Crime and Public Safety Contracting

Published: February 01, 2023

Justice/Public Safety & Homeland SecurityNEW YORKTEXAS

A look at the effects and relations of growing inflation and crime rates, as well as their impact on public safety contracting in 2023 and beyond.

2022 saw major growth in the Public Safety sector of Government Contracting; according to Deltek numbers,[1]  there was roughly a 4.7% increase in Annual Bids and RFPs Issued in 2022 as compared to 2021. While a lot of this can be attributed to post-pandemic recovery, data on inflation and its affects on recent crime rates is likely to have played a factor as well. Initial expectations are that 2023 will see another notable gain of 2.6%, and with different State/Local agencies moving to increase their fight against rising crime levels, there is room for further growth. 

A report from the Council on Criminal Justice looking at crime data in the first half of 2022 found property crime to have risen significantly compared to the previous year. Robberies rose 19%, residential burglaries 6%, nonresidential burglaries 8%, larcenies 20% and motor vehicle thefts saw an increase of 15% compared to the first half of 2021. [2] Municipalities are already moving to combat these rising numbers. For example, New York City recently announced a $5.5 million effort to fit each of their over 6,400 subway cars with new security cameras[3] – a movement in response to the large increase of crime per capita rates they’ve seen in the subway system as of late. Efforts to combat school shootings are also going to see a major uptick in funding; Governor Greg Abbott of Texas, along with members of the State’s House and Senate, announced $400 million in funding to the Texas Education Agency (TEA) to implement increased safety measures,[4] including upgrading or replacing doors, windows, fencing, communications, metal detectors, cameras, and a host of other needs. This money is already being distributed for 2023-2025 to different Texas school districts via a grant program.  

An often-overlooked factor impacting these crime increases is the significant increase in inflation seen over the past year as a result of the pandemic. Past studies[5] have shown positive relationships between inflation increases and crime increases, citing things such as lags between price and wage adjustments lowering real income of low-skilled labor as contributing factors. When individuals are unable to maintain a minimum standard of living for themselves and/or their family, they can turn to property crime as a means to provide. Inflation continues to contribute to this, as with the cost of goods increased, people can turn to places like pawn shops to find cheaper prices for consumer items; driving up the demand for illegal and stolen goods.[6] If a thief is getting paid more for their stolen goods, it’s only going to entice them to steal even more. 

Inflation and crime will both be trends to watch as 2023 progresses. With continued increases in inflation, we will likely see increases in crime alongside it, resulting in an increase in demand from government agencies to dedicate funds in an effort to combat them. The Federal Reserve has already begun dialing back their interest rate increases, but experts are expecting a pivot to still be over a year away.[7]  As long as the inflated levels of crime persist, there will be an increased need, and opportunity, to put in measures to address it.