Low unemployment means a criminal record is less of a hurdle

By Gretchen Frazee

A tightening labor market is pushing employers to hire more unskilled workers, including people with criminal records.

During the Great Recession, when the labor market was filled with unemployed, overqualified workers applying for jobs, companies eliminated many low-skilled positions through automation and had the luxury of increasing the skill requirements for the jobs they kept.

But now the unemployment rate has dropped to below 4 percent, down from a peak of 10 percent in 2009. Instead of choosing from a glut of applicants with bachelor’s and master’s degrees, employers are being forced to consider applicants with little to no training at all, including ex-convicts.

“It used to be the case where companies would say, ‘We won’t take ex-offenders,’” said Bill Harrigan, the owner of the Wisconsin-based machine maintenance and food plant sanitation services company Harrigan Solutions. Now, “people say, ‘We don’t want to do a drug test. We don’t want to know because we are desperate for workers.’”

A survey from the National Federation of Independent Businesses recently found that 52 percent of companies said they had few or no qualified applicants for the positions they were trying to fill.

The labor shortage is not limited to any one industry. The Federal Reserve recently indicated that companies are having “difficulty finding qualified labor” across a “wide range of occupations.” Those include engineers, construction and manufacturing workers, IT professionals and truck drivers.

That translates to more opportunities for people recently released from prison.

“We have seen with the unemployment rate dropping that businesses are far more open to hiring ex-offenders, especially if they have an organization that is sponsoring the person,” said Mary Ann Gilmer, a vice president at Goodwill Industries of the Valleys in Virginia.

That organization helps coach and train people with criminal records and has seen recent success, especially in the IT and manufacturing sectors. Gilmer said her counterparts at other nonprofit organizations across the country are reporting similar upticks in hiring.

“Everyone is breathing a sigh of relief that things are opening up for these folks,” she said.

In Wisconsin, the need for workers is so high, some inmates are working at machine shops while they are still incarcerated. Inmates in Wisconsin are also learning factory skills in training programs run by institutions like the Gateway Technical College, which is located about an hour south of Milwaukee.

Randilyn, an inmate at the Robert Ellsworth Correctional Facility who is participating in the 22-week training boot camp and whose last name is being withheld because of Wisconsin Department of Corrections policy, said she was learning computer numerical control, a process that automizes machines using a computer.

“I know there are jobs out there,” Randilyn said. “I see them in the paper. I see them in the want ads.”

Workers are in such high demand that the dozen employers hiring from Gateway’s group of trainees have more job openings than the college can fill.

Kate Walker, the director of operations at Gateway, said a criminal record is not the barrier it once was.

“There’s no hesitation about hiring them,” she said. “Even if it’s for the short term.”

There is scarce data on exactly how many companies are hiring ex-offenders, though it is a large pool of employment; in the U.S., 70 million people have criminal records, about the same number of people who have college degrees.

The evidence that does exist is largely anecdotal, according to Jennifer Doleac, an associate professor of economics at Texas A&M University who studies prisoner reentry programs.

“But it certainly makes sense that if you go from a situation where you have lots of applicants for any one position to a labor market where you have fewer applicants, as an employer you’re just going to have to dig deeper into the applicant pool and hire people who might not have been your first choice,” Doleac said.

The worker shortage isn’t a long-term solution

Even if they have few options, hiring managers do still have reservations about employing people who have spent time in prison.

A survey from the Society for Human Resource Management and the libertarian Charles Koch Institute found company leaders had several concerns when considering applicants with criminal records.

They worry about legal liability, according to the survey. They expressed concern that the employee would not have reliable transportation to and from work. And they worried about how other employees might react to having a coworker with a rap sheet.

Despite those concerns, employers should not see ex-offenders as a problem, said Angela Hanks, who heads the center for postsecondary and economic success at the anti-poverty policy organization CLASP.

During times with higher unemployment, people on the margins face discrimination, Hanks said. “A tighter labor market reduces employers’ opportunity to engage in discrimination.”

Still, Hanks warned against relying on a low national unemployment rate to reduce the unemployment rates for specific demographics. Hanks said creating more on-the-job training, which has been on the decline over the past several decades, would be a better approach.

Specific efforts, such as the “ban the box” campaign, are dedicated to reducing discrimination. “Ban the box” aims to remove a box from employment applications where applicants must check whether they have a criminal record.

Doleac’s research suggests “ban the box” has raised awareness around hiring people who were incarcerated but has done little to improve ex-offenders’ chances at landing a job.

In some cases, it can lead to more racial discrimination because potential employers are left to guess whether an applicant has a criminal record, and they tend to make a biased guess that young, black male applicants are the most likely to have an illicit past, according to Doleac’s studies.

Black Americans already have a significantly higher unemployment rate than the national average. The unemployment rate for black Americans was 6.6 percent in July, compared to the white unemployment rate of 3.4 percent.

Instead, Doleac has found rehabilitation certificates, which a judge issues to former prisoners after they have met specific requirements, are effective.

“I think there are legitimate reasons employers worry, and there are going to be some negative situations that could scare them off,” Doleac said.

For that reason, Doleac said, policymakers need to be realistic and implement programs that empower Americans on the margins to find work and employers to make the best hiring decisions. If programs that train ex-offenders produce successful employees, that could give employers more confidence to hire more people with criminal records in the future.

At Harrigan Solutions, in Grafton, Wisconsin, the majority of the company’s employees served time in prison.

Bill Harrigan, the company’s owner, said he likes to think of his main goal as something other than fixing machines.

Harrigan regularly meets with his employees to discuss not only their work product but their personal lives as well. He also connects them to nonprofit organizations that could help them with finances, drug addiction and other life management skills. Unlike most post-prison training programs, Harrigan Solutions does not run off donations or state funding. It runs off profits from the company.

So far, the system has worked, Harrigan said. “Our job is to develop people. If we develop our people, we succeed,” he said. “We believe if we help them through these struggles, we get phenomenal employees and phenomenal performance.”

Advocates are hoping other employers will have similar, positive experiences.

“Now is our opportunity to show them that these employees will stay longer and be more loyal and dedicated workers than your average worker,” Gilmer said.

Goodwill Industries of the Valleys has found the retention rate for employees with a criminal history is 12 percent higher than workers with a clean record. Gilmer said that is because ex-offenders realize the difficulty they could have finding a new job.

And if companies begin to experience those benefits firsthand now, they could be more likely to keep hiring people with criminal backgrounds once the unemployment rate rises.