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Study Shows Ex-offenders Have Greatly Reduced Employment Rates

In November 2010 the Center for Economic and Policy Research released a study titled “Ex-offenders and the Labor Market,” which found that a felony conviction or imprisonment significantly reduces the ability of ex-offenders to find jobs, costing the U.S. economy an estimated $57 to $65 billion annually in lost economic output.

The study focused on male offenders, since they constitute 90% of people convicted of felonies in the U.S. It is well known that ex-prisoners in general have a more difficult time finding jobs than people without a criminal history. The goals of the study were to quantify the amount of disadvantage caused by a felony conviction and to clarify how much of that employment disadvantage was caused by factors unrelated to a criminal record – such as a lack of education, skills or work history – and how much was due solely to the effect of the conviction and/or incarceration.

The study used government statistics to estimate the 2008 working-age ex-felon population in the U.S. at 12.3 to 13.9 million. Of those, between 5.4 and 6.1 million were former prisoners while the others had felony convictions but had not served time in prison. This means that in 2008 about 1 in 17 working-age adult men was a former prisoner and about 1 in 8 was an ex-felon.

The study noted that the 2008 rates of both violent and property crimes were lower than the rates in 1980. Therefore, the dramatic increase in the ex-offender population since 1980 was not due to an increase in underlying criminal activity. “Instead, dramatic increases in sentencing probabilities and sentence lengths, especially for drug-related offenses, account for both the increase in the incarcerated population and the mushrooming of the ex-offender population,” the report found.

Therefore, “changes in sentencing today can greatly reduce the size of the ex-offender population in the future. The high cost in terms of lost output to the overall economy also suggests the benefits of taking action to reduce the substantial employment barriers facing current ex-offenders. Every indication is that, in the absence of some reform of the criminal justice system, the share of ex-offenders in the working-age population will rise substantially in coming decades.”

On average, former prisoners are far less educated than the rest of the population. In 2008, over 36% of ex-prisoners had not earned a high school diploma or GED compared to around 10% of the general population. Only 11% of former prisoners had taken any college courses compared to almost 60% of the general population.

Further, imprisonment has become racially polarized. In 2008, African-Americans made up around 40% of the prison population but less than 15% of the U.S. population. Latinos were also over-represented, making up over 20% of the prison population but about 15% of the U.S. population. This means that the employment-related effects of incarceration are more pronounced within those minority populations.

Although imprisonment can degrade a worker’s “human capital,” including formal education, work experience or skills such as the ability to relate to people or be punctual, it can also lead to loss of social support networks that can help them find jobs. All of these factors make it more difficult for former prisoners to obtain employment. Research has shown that having a history of incarceration reduces a worker’s chance of being hired by 15 to 30% and reduces the annual number of weeks worked by 6 to 11 weeks, with the effect being more pronounced among minorities and under-educated ex-prisoners.

Research conducted to isolate the effect of a felony conviction on employers’ willingness to hire found that 80 to 90% of employers said they would hire “former welfare recipients, workers with little recent work experience or lengthy unemployment, and other stigmatizing characteristics,” but only around 40% said they would consider hiring job applicants with criminal histories. Even fewer would consider ex-offenders for jobs involving customer service or handling money. This stigmatizing effect was true even when researchers used actors and carefully crafted résumés that eliminated the effect of any other variable other than the sole fact of a prior felony conviction.

Since ex-felons make up 6.6 to 7.4% of the total working-age population, or about 1 in 15 working-age adults, lower employment rates for ex-felons depressed the nation’s employment rate for men by an estimated 1.5 to 1.7% based on a mid-range estimated employment penalty for having a criminal record. For African-American ex-felons the employment rate was decreased by 4.7 to 5.3% while for those without high school diplomas it was decreased by 6.1 to 6.9%. This represented a loss of goods and services that reduced the gross domestic product (GDP) for the U.S. by $57 to $65 billion in 2008.

Unless criminal justice reforms are undertaken, this loss is expected to substantially increase in the future due to higher incarceration rates among younger people. “We incarcerate an astonishing share of non-violent offenders, particularly for drug-related offenses. We have far better ways to handle these kinds of offenses, but so far common sense has not prevailed,” said John Schmitt, a co-author of the study.

Employment problems faced by ex-felons have been recognized by a number of government officials, who are taking steps to try to improve the employability of former prisoners. For example, some cities are holding job fairs exclusively for people with criminal records. Detroit held such an event on October 12, 2011. “A lot of times, folks who come out [of jail] and get roadblock after roadblock and door closed, they give up and some of them re-commit crimes because they feel that’s their only option,” noted Detroit City Council President Charles Pugh. “[W]e feel that population needs just a boost of confidence and some hope that there are employers out there who will give them second chances.”

Other cities and counties are trying to remove unfair barriers to employment for ex-offenders, such as omitting questions about felony convictions from job applications, and the Equal Employment Opportunity Commission (EEOC) recently considered this issue. [See: PLN, Sept. 2011, p.32]. On the federal level, two long-standing programs are still available to assist former prisoners in obtaining employment: the Federal Bonding Program and the Work Opportunities Tax Credits for employers.

Sources: “Ex-Offenders and the Labor Market,” Center for Economic and Policy Research (Nov. 2010);

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