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A Great Untapped Resource

This story is one of six from our latest edition of BBA Economic Digest, a weekly online publication for economic developers and business people. Subscribe here.

There are 11 million job openings and only 6.9 million unemployed in the U.S., the highest ratio of openings to active job seekers on record, according to Labor Department data out Wednesday.

Employers are struggling to fill positions. The ratio of hires to job openings is the lowest on record.

But, but, but: There is a broader pool of potential workers for employers out there if employers will only consider them. I am referring to the formerly incarcerated.

Roughly 2.12 million people were incarcerated in the U.S. last year. About 700,000 come out of prison each year facing a situation where they are denied jobs and licensing. In all, there are about 20 million people in the U.S with criminal records.

According to a recent study, 72 percent of employers conduct background checks, and 82 percent of those companies screen out potential employees based on their criminal records.

I was literally wowed by an awe-inspiring story that I heard yesterday at Consultant Connect's ECONOMIX 2021 in Scottsdale, Ariz. Damon West, author of The Coffee Bean, spoke about his experience going to prison and the redemption that followed.

He also spoke about the need for employers to give formerly incarcerated people a second chance and gave props to Cheri Garcia, founder of Dallas-based Cornbread Hustle, a staffing agency for second chances.

"Formerly incarcerated people, especially formerly incarcerated people that are in recovery, are people that are working hard," said West.

"I've got my own business, a real estate investment company in Southeast Texas. I hired three workers this week, all three are formerly incarcerated people that are in a program of recovery, and these men are the most grateful man for having those jobs."

Keep in mind that there are almost 100 million Americans who aren't in the labor force—because they stopped looking for work, retired, are going to school, have home responsibilities, are ill or disabled, and other reasons. Among that group, 5.9 million said they wanted a job now.

I submit the "other reasons" for many is that they are formerly incarcerated people who have become discouraged by the job scene.

Formerly incarcerated people have always had a much higher rate of unemployment than the general population. On average, formerly incarcerated people are unemployed at a rate of 27 percent, according to research done in 2018 by the Prison Policy Institute. That is higher than the unemployment rate during any time in U.S. history, including the Great Depression.

Michelle Cirocco, chief social responsibility officer for Televerde, a B2B marketing and sales company that focuses on preparing and training incarcerated women for release, told Harvard Business Review, “One of the biggest ways to solve mass incarceration is real employment opportunities to keep people out of prison.”

She’s not wrong, as 45 percent of prisoners are arrested within one year of release, 79 percent within six years, and 89 percent within nine years, according to a 2018 U.S. Department of Justice report. The lack of employment opportunities is likely a contributing factor, as is a lack of education.

Education is often a large barrier for people reentering society after decades of incarceration. Less than 4 percent of formerly incarcerated people have a college degree. Further, 25 percent do not have a GED, often a minimum requirement on job applications, according to Prison Policy Institute.

Dean Barber is the principal of BBA, a Dallas-based advisory firm, and publisher of BBA Economic Digest.

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