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The Business Case for Criminal Justice Reform - Second Chance Hiring

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3 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 Employment Opportunities Reduce the Recidivism Rate Recidivism is the tendency of a convicted criminal to re-offend. There is a 40% chance they will head back to prison within the next three years for those who have been to prison. 14 Two years after release, employed individuals were twice as likely to have avoided arrest as their unemployed counterparts. 15 Between 1997 and 2007, recidivism rates grew by more than 9% in states with the heaviest licensing burdens and shrank by 2.5% in states with the lowest licensing burdens. 16 II. Barriers to Entry Formerly incarcerated people are unemployed at a rate of over 27%. 17 The stigmas attached to a criminal record are important to acknowledge. This includes labeling, stereotyping, status loss, and discrimination that accompanies a criminal record. These stigmas manifest as a lack of trust that makes some employers reluctant to hire ex-offenders. 18 In addition, employers often expect applicants with criminal records to engage in undesirable behaviors on the job, even ones unrelated to the conduct initiated by the record. 19 Reputational risk/liability is often why employers are wary of hiring past offenders or hesitant to disclose that an employee is a convicted criminal. Potential liability is the practice of negligent hiring, which occurs when an employer fails to verify that a prospective employee may present a clear and present danger to the organization. Employers are concerned about the legal liability of hiring these individuals and the potential impact on the company brand if customers learn some employees have criminal records. Thus, in certain circumstances, when employers decide not to verify that a prospective employee has a criminal record, they may end up on the losing end of negligent hiring cases, losing about 75% of the time with the average settlement of such claims as high as $1 million. 20 Lack of education and employment are also structural barriers to entry. Approximately two-fifths of people entering prison do not have a high school diploma or General Educational Development (G.E.D.) credential. 21 Most have less work experience and fewer job-related skills than the general population. 22 The criminal justice system disproportionately impacts minorities. Black Americans comprise 13% of the U.S. population but 40% of the incarcerated population. 23 Black Americans are more likely than white Americans to be arrested. And once arrested, they are more likely to be convicted and once convicted, they are more likely to experience lengthy prison sentences. 24 Further, having a record reduces employer callback rates by 50% for white male applicants but 65% for Black men. 25 Black women are hit especially hard. Unemployment for formerly incarcerated white men is 14 percentage points higher than the general population but 37 percentage points higher for Black women. 26 Struggles with finding employment post-incarceration contribute to the growing wealth gap in the U.S. Approximately 1 in 9 Black children and 1 in 28 Latino children have an incarcerated parent, compared with roughly 1 in 57 white children. 27

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