Children with a parent in prison, by race, from Pew's report on incarceration and income mobility:
For black children, the loss of income mobility caused by an incarcerated parent compounds itself. According to the report, prior to incarceration, a little less than half of these parents lived with their children, and slightly more than half were the primary earners. Having an incarcerated parent means less income and a higher probability of struggling in school, both of which make upward mobility less likely. The children of the incarcerated are also ultimately more likely to be incarcerated.
I've written before (and I'm sure I'm not the only one) that one way to think about the cost of incarceration is that every person who is in jail or prison is someone who is not just out of the labor force but an active ward of the state. Incarcerating people doesn't just cost the money required to house and feed the incarcerated; it costs the money they would otherwise be making if they were a productive member of society. But that impact gets even larger when you consider that 1.2 million of the 2.3 million people behind bars are parents of children under the age of 18, and the cost of an incarcerated parent to a family isn't just a matter of the absence of a second income stream or the emotional toll of an absent parent but also what it costs to maintain contact with someone who is far away. Once these parents get out, they're dissuaded from legitimate employment not just by prior associations with criminally inclined social networks likely broadened while in prison and the increased difficulty of finding a job with the stigma of prior incarceration, but a number of potential financial obligations like court fees and child-support payments that may make them less likely to get licit work. Also, just speaking generally, the kind of social skills one develops to survive in prison are directly antithetical to holding a low-wage job in a service economy.
Anyway the point is that there's more to the cost of incarceration than what we see in state budgets ($50 billion a year), and not just in economic terms.