Sentenced to Life (Unemployed): Hiring the Formerly Incarcerated Amid Labor Shortage

An increasing number of businesses are adopting open hiring practices—often referred to as second-chance hiring—by eliminating previous restrictions placed on applicants with criminal records. In doing so, these companies have produced a two-fold economic and societal gain. That is, these amended hiring processes help alleviate the gaps of the current U.S. labor shortage, all while taking steps towards addressing the detrimental impacts of mass incarceration in the U.S. and the social and racial inequities that plague the criminal justice system.

This year, the labor shortage in the U.S. has reached unprecedented levels. The U.S. Bureau of Labor Statistics reported just over 10 million job openings at the end of August 2022. In an effort to fill these spaces in the workforce, employers have pursued multiple avenues of recruitment. For instance, in May 2022, 49% of businesses reported raising compensation for open positions. Others—both small businesses and larger companies—have shifted their hiring focus towards “different groups they hadn’t looked at before,” such as those without degrees, candidates with less relevant experience, and people with criminal records.

Previously incarcerated individuals have historically struggled to reenter the workforce upon release. This is exacerbated by the fact that a large majority of job applications require background checks. For many employers, notice of any sort of criminal record is enough to place an application in a separate pile and often in the trash. The Prison Policy Initiative reported that the unemployment rate for formerly incarcerated individuals in 2018 was over 27%, whereas the overall unemployment rate in the U.S. is only 3.5%. Almost half of formerly incarcerated people are unemployed one year after being released from prison.

Big companies like JP Morgan Chase and CVS Health have led the way in attacking the root of this issue by disposing of traditional hiring restrictions based on criminal history altogether. Jamie Dimon, chairman and chief executive of JP Morgan Chase, describes the unemployment rate amongst formerly incarcerated individuals as a “moral outrage.” His company’s hiring process is dedicated to targeting and overcoming barriers posed by occupational licensing rules and systemic racism in the U.S. criminal justice system. Last year alone, JP Morgan Chase hired 4,300 people with criminal records.

Similarly, CVS Health has made hiring efforts concentrated on mitigating the racial inequities produced by the criminal injustice system. In the U.S., people of color are disproportionately at risk of conviction, and are far more likely to receive longer and more severe sentences than their white counterparts. Amongst previously incarcerated individuals, Black women face the highest rates of unemployment estimated at 43.6%, followed by Black men at 35.2%. By comparison, previously incarcerated white women and men, experience lower unemployment rates of 23.2% and 18.4%, respectively. Women of color are disproportionately placed in part-time jobs as well. By focusing its hiring initiatives on communities of color, CVS has made real steps towards addressing these major gaps of inequality, and smaller businesses across the country have begun to follow suit.

Services like 70 Million Jobs and the Redemption Project help facilitate second-chance hiring on a wide scale. Genevieve Martin, executive director of Dave’s Killer Bread Foundation, advises companies on how to effectively execute this approach. She emphasizes that “Second-chance hiring is less likely to work if an organization is doing it for the wrong reasons… It’s not a program. It’s a business model.” In other words, the intention behind implementing second-chance hiring is vital to the model’s success. Thus, fostering a corporate culture with a commitment to hiring the best candidate requires upholding an emphasis on inclusion.

Several studies have established a high correlation between unemployment rates and recidivism. One study from the Indiana Department of Correction concluded that the recidivism rate among unemployed offenders was 42.4%. For employed offenders, these rates dropped to 26.2%. A representative from Progressive—another company expanding their hiring practices to formerly incarcerated applicants—raises, “If we can’t be part of the solution, providing people with opportunity, how can we be surprised when people repeat the same cycle?” Second-chance hiring is one of many examples of how placing a rehabilitative lens on criminal punishment can lead to tremendous and widespread societal benefits. There is no reason that even short criminal sentences should carry consequences for life.

This growing trend in open hiring initiatives has demonstrated substantial positive effects on both the U.S. economy and labor force. Nonetheless, there is more work to be done. In order to fully address the inequities that pervade the criminal justice system, it must be restructured at its foundation—beginning with extensive policy reform and systemic change. Administering restoration mechanisms, limiting public access to criminal records, implementing fair employment and licensing laws, and providing financial support upon release are just a few of the many proposed solutions at the forefront of this discussion.