The Economic Impact of Mass Incarceration and the Hope Presented by Second Chance Employment

Poverty is an issue of which all people are aware. Mass incarceration is another major issue present in the United States, but it typically does not get nearly as much attention. However, these two issues are closely linked, and any effort to alleviate poverty must consider mass incarceration.

Michael Tanner is an economic and public policy researcher and author with the Cato Institute in Washington D.C. In 2018, Tanner released The Inclusive Economy: How to Bring Wealth to America’s Poor. The book outlines opposing theories about the factors that cause poverty, and Tanner provides his own possible solutions to those factors. The very first factor that Tanner highlights is mass incarceration. He begins by presenting some statistics that show the extent of the problem of mass incarceration: “At any given time, roughly 2.2 million Americans are in jail or prison, with another 4.7 million on probation or parole, a population that has grown substantially over the past 30 years.” This extremely high rate of imprisonment leads to numerous issues including increased poverty. Tanner writes that “[a] study by scholars at Villanova University concluded that mass incarceration has increased the U.S. poverty rate by an estimated 20 percent.”

This impact on poverty rates stems primarily from the difficulties that people with a criminal record face when trying to find employment. When companies discover that an applicant has a criminal record, many will not even consider that person for the position. According to Tanner, “[r]ecent job application experiments find that applicants with criminal records were 50 percent less likely to receive an interview request or job offer, relative to otherwise identical applicants with no criminal record.” People who have been arrested in the past, especially those who have been convicted of a felony, are deemed “hard-to-hire” candidates. However, a couple of companies right here in Cincinnati have begun to debunk this claim by committing to provide work for past convicts, also known as second chance employment.

One of those companies is Nehemiah Manufacturing. This small consumer packaged goods company was founded in 2009 by Dan Meyer and Richard Palmer with the specific purpose of providing opportunities for so-called hard-to-hire people in the West End and Over-the-Rhine neighborhoods of Cincinnati. Nehemiah’s mission is a simple, three-part statement: “build brands, create jobs, change lives.” Over the last eleven years, Nehemiah has been able to expand with the help of Procter & Gamble. The Fortune 500 company “awarded Nehemiah the license to manage the Pampers Kandoo line of toddler products in 2009, helping launch our growth.” With the support of P&G and other “local social service agencies who serve individuals with criminal records, gaps in employment, and other barriers to finding meaningful work,” Nehemiah has made a significant impact in the lives of many second-chance employees.

According to Dan Meyer, Nehemiah currently employs 180 individuals of which 130 are second chance employees. However, Meyer and Palmer have found that there is still even more demand for second chance opportunities. As a result, the two men partnered with other businesses once again in 2015 to create the Beacon of Hope Business Alliance. Since an average of “2,500 people return to Hamilton County from incarceration” every year, Beacon of Hope’s ultimate goal is to create an additional 2,500 jobs each year in order to match the number of people searching for second chance employment. So far, Nehemiah and Beacon of Hope have provided much-needed opportunities for hundreds of Cincinnatians and have done a tremendous job of helping to address some of Michael Tanner’s concerns about the effect of mass incarceration on poverty.

Still, Tanner worries that many people with a criminal record who are able to find employment will not earn enough money to comfortably support themselves and their families. Tanner attributes this issue to the fact that “[t]he people most likely to go to prison are disproportionately likely to experience other markers of socioeconomic disadvantage, including low educational attainment [and] weak attachment to the workforce.” Tanner also writes that a “criminal record also limits future educational opportunities.” The issue of a lack of educational opportunities is being addressed by another local establishment, Venice on Vine in Over-the-Rhine. “Venice on Vine is a pre-employment training & job placement program, for individuals with barriers to employment, that utilizes both a traditional pizzeria and a commercial catering kitchen as unique classrooms.” In addition to providing employment opportunities for past convicts and other impoverished people, Venice on Vine stresses education.

The pizza and catering restaurant has its roots in the non-profit organization Power Inspires Progress (PIP). PIP began in 1986 under the guidance of Sr. Judy Tensing of the Sisters of Notre Dame de Namur and Sr. Barbara Wheeler, a Dominican Sister of Hope. For the last thirty-four years, PIP has sponsored many efforts to provide employment and training to impoverished people. Venice on Vine opened its current location in 2006 and became “the first new restaurant/low skill employer on Vine Street in a decade.” Beyond providing employment and job training, Venice on Vine has “added academic tutoring to the program because we see math, reading, computers, and the GED as major keys to successful employment.” The people at Venice on Vine believe that “[t]utoring compliments [sic] the teamwork, problem-solving, attendance, cooking, cleaning and cash management skills taught on the job.”

Similar to Nehemiah Manufacturing, Venice on Vine is dedicated to serving people who are too often left behind by the majority of other companies. It is extremely difficult, sometimes even impossible, for people who grow up in poverty and for people who have been incarcerated to take part in the economy. As Michael Tanner presents, mass incarceration and poverty are closely related. However, organizations like Nehemiah and Venice on Vine are perfect examples not only of how second chance employment can be implemented but also how it can open companies to an untapped portion of the labor market. If more companies begin to treat previously incarcerated people as these two local establishments do, poverty and future incarceration rates could be greatly reduced.

Obviously, not all companies can be founded with the explicit purpose of or be completely devoted to second-chance hiring like Nehemiah and Venice on Vine. One may wonder how companies that already exist or are yet to be founded can incorporate second chance employment into their normal hiring process. In March of 2020, Xavier was fortunate to have a panel discussion on this topic. The event was promoted as providing “A Business and Ethical Case for Second Chance Hiring.” The members of the discussion were Dan Meyer, Marcus Sheanshang, and Rachel Alex Love, and the moderator was Jeffrey Korzenik who is the Chief Investment Strategist at Fifth Third Bank.

Marcus Sheanshang is the President and CEO of JBM Packaging in Lebanon, Ohio. JBM produces envelopes and other packaging materials, but the company’s focus is much deeper. Similar to Nehemiah, JBM is guided by a three-pronged purpose: “Better Solutions. Better Lives. Better World.” JBM was not founded with the specific intent of hiring ex-offenders, but that is where their family mindset and mission statement have led the firm. As Mr. Sheanshang stated at the panel discussion, JBM’s involvement in second-chance hiring was “not as altruistic as Dan and his team […]. We were really trying to solve a business problem.” As JBM aimed to grow as a company, the management team was struggling to find enough new workers. After trying to fill their needs through multiple different groups of possible employees, Sheanshang finally realized the untapped potential of former offenders. With the help of Dan Meyer, JBM began the Fair Chance Program in 2016. This program “provides opportunities for individuals to learn transferrable and meaningful job skills […] with the goal of expanding career and employment opportunities to more individuals and successfully reintegrating ex-offenders into society.”

Currently, JBM has twenty-two, second chance employees, leading to more company growth and an even greater purpose-driven culture. Although this number is not as large as it is at Nehemiah and second chance employees make up a much smaller percentage of the workforce at JBM, this story of the Fair Chance Program provides an example for other companies that could benefit themselves and the lives of many others by implementing second chance hiring even to a small degree. Rachel Alex Love, the final member of the panel, created a consulting firm in New York City that helps to coach companies through the process of finding and hiring previously incarcerated people. During the discussion, Sheanshang and Love both admitted that beginning second chance hiring at a company is not an easy task. There are several changes that each company must make, for example altering the application and background check processes, but all three members of the panel agreed that the effort was more than worth it. By tapping into the often-forgotten population of previously incarcerated people, their companies have been able to grow while also helping to support their communities.

One of the final questions posed to the panel focused on the role of state and local governments in promoting second chance hiring. Meyer and Sheanshang both noted the assistance they have received from the city of Cincinnati and other local governments, specifically with transportation for employees and programs within the prison systems. However, there has also been some support for criminal justice reform and second chance employment from the federal government. For example, Congress passed, and President Trump signed into law, the First Step Act (FSA) in December of 2018. According to the Federal Bureau of Prisons, “[t]he acts was the culmination of a bipartisan effort to improve criminal justice outcomes, as well as to reduce the size of the federal prison population while also creating mechanisms to maintain public safety.” The act aims to reduce the number of past convicts who re-offend, provides correctional reforms such as greater protections for prisoners and greater rewards for good behavior, and reforms the lengths of certain sentences. The simple fact that this bill received bipartisan support in the House of Representatives and was approved by President Trump, which rarely happens in these highly polarized times, should provide an indication about the importance of this issue.

Although the First Step Act does not specifically mention it, second chance hiring has gained significant support in Washington D.C. On June 13, 2019, President Trump delivered a speech in the East Room of the White House about the opportunities created by and the need for greater second chance hiring in the United States. President Trump began his remarks by highlighting the practical and ethical significance of expanding second chance hiring. He stated, “[t]o realize America’s full potential, we must unlock the talents of every single citizen. […] Second chance hiring is about safer communities, a stronger workforce, and a thriving economy. We believe in the dignity of work and the pride of a paycheck.” He also announced two new efforts intended to encourage more companies to adopt second chance hiring and to prepare formerly incarcerated people to reenter the workforce.

First, Trump revealed that “the Federal Bureau of Prisons announced that it will work with employers to help those leaving prison to have a job lined up when they are released.” Second, he declared, “[w]e are expanding our Second Chance Pell Grant Pilot Program to allow individuals to use their time in prison to take college-level classes.” These reforms are an important step forward in raising awareness about the need for second chance hiring across the country. Clearly, the local and national attention second chance hiring is receiving, the economic benefits it presents, and its altruistic goals, provide a strong case for many companies to begin to strongly consider giving everyone a second chance.

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