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The Business Case for Criminal Justice Reform - Second Chance Hiring

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2 U . S . C H A M B E R O F C O M M E R C E 1 6 1 5 H S t r e e t , N W , W a s h i n g t o n , D . C . 2 0 0 6 2 | u s c h a m b e r. c o m I. Benefits of Hiring Formerly Incarcerated Individuals Employment of the formerly incarcerated would increase Gross Domestic Product (G.D.P.), leading to greater earning power and improved public safety At the national level, economists estimate that the Gross Domestic Product (G.D.P.) is reduced between $78 billion and $87 billion due to excluding formerly incarcerated job seekers from the workforce. 4 Increased income from reliable employment leads to greater purchasing power, increased sales and payroll taxes, and improved public safety. At the local level, the nonprofit organization, D.C. Central Kitchen, found that its full-time employees with criminal histories contributed over $60,000 in payroll taxes annually. 5 Data from Philadelphia in 2011 showed that connecting 100 formerly incarcerated individuals with employment would produce $1.2 million in annual earnings and $55 million in total post- release lifetime earnings. 6 Connecting 100 formerly incarcerated individuals to jobs would yield $1.9 million in additional wage tax contributions and $800,000 in additional sales tax revenue over the employee's lifetime. One hundred fewer recidivists would result in more than $5.2 million in annual cost savings to criminal justice agencies, including police, courts, corrections, and probation and parole. Employment of formerly incarcerated individuals contributing to 1,500 fewer recidivists would allow for the closure of a prison facility for an annual cost saving of more than $26 million. 7 Second Chance Hires Are Motivated and Loyal Based on several case studies from around the U.S., formerly incarcerated employees demonstrated greater employee loyalty than those without a criminal record to employers. • At Total Wine & More Co., human resources managers discovered that annual turnover was on average 12.2% lower for employees with criminal records than those without. By adopting a program to recruit employees with criminal histories, the organization reduced turnover from 25% to 11%. 8 • According to a 2015 study by Portland State University that compared employees at Dave's Killer Bread over a three-year period, people with criminal backgrounds outperformed those without in three categories: attendance, policy, and behavioral violations. Additionally, employees with a criminal background were promoted faster. 9 • A study of job performance among call center employees found that individuals with criminal records had longer tenures and were less likely to quit than those without records. 10 • Since 2009, Nehemiah Manufacturing, a consumer packing firm in Cincinnati, Ohio, has hired 180 employees, 80% of whom have criminal backgrounds. 11 An analysis of the company's annual turnover rate revealed that the turnover rate is approximately 15%, below the 38.5% average for consumer products companies. 12 • When researchers analyzed data from almost 60,000 applicants hired into U.S. sales and customer service call centers between 2008 and 2014, they found that former inmates stayed in their positions 19 days longer than those without a record. 13 BENEFITS OF SECOND CHANCE HIRING Increased national productivity High loyalty/low turnover Available, motivated employees Safer and stronger communities

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