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January 17, 2018

"Breaking Down Barriers: Experiments into Policies That Might Incentivize Employers to Hire Ex-Offenders"

The title of this post is the title of this notable new Rand Corporation research report. Here is its summary and some of its key findings and recommendations:

The rate of criminal punishment in the United States has had far-reaching economic consequences, in large part because people with criminal records are marginalized within the labor market. Given these negative economic implications, federal, state and local officials have developed a host of policies to encourage employers to hire ex-offenders, with varying degrees of success.  To inform policies and programs aimed at improving employment rates for ex-offenders, we examined employer preferences regarding policy options targeted to incentivize hiring individuals with one nonviolent felony conviction.

In our experiments, we found employers were 69 percent more likely to consider hiring an ex-offender if a hiring agency also provides a guaranteed replacement worker in the event the ex-offender was deemed unsuitable and 53 percent more likely to hire an ex-offender who can provide a certificate of validated positive previous work performance history.  Having consistent transportation provided by a hiring agency increased the likelihood of being considered for hire by 33 percent. 

Employers also were found to be 30 percent more likely to consider an ex-offender for hire if the government increases the tax credit from 25 percent of the worker’s wages (up to $2,500) to 40 percent (up to $5,000) — double the current maximum amount allowed by the Work Opportunity Tax Credit — and 24 percent more likely to hire an ex-offender if the government completed all tax-related paperwork.

Key Findings

Worker Replacement and Fee Discounts Increase Hiring Prospects for Ex-Offenders...

Tax Credits Have a Similarly Positive Effect...

Employer Access to Previous Performance Could Factor into Hiring...

Recommendations

  • Staffing agencies and reentry or reintegration programs could increase the likelihood of employment for people with a criminal record if they guarantee prospective employers a replacement employee.
  • State policymakers should consider expanding post-conviction certification programs. Across both the tax credit and staffing agency discount experiments, employers demonstrate a clear preference for wanting to know whether an ex-offender job candidate has a consistent work history and verifiable positive employment references versus simply knowing whether the person follows company codes of conduct.
  • Tax agencies should consider reducing the paperwork that companies have to fill out for credits. Government agencies could also consider providing help to prepare and submit the forms.
  • Ensuring reliable transportation to and from a job site for candidates with a criminal record increases the likelihood an employer will support hiring such individuals. As with reducing paperwork, the impact of this policy is more limited than many of our other tested policy features.

January 17, 2018 at 10:37 AM | Permalink

Comments

Probably the best hiring values lie in hiring registered sex offenders. As long as you give them fair wages, the level of competence to job attendance and performance exceeds virtually every other class of employee metric. Keep in mind that recidivism for registrants are far lower than for all other categories of crime. The only problem comes when the public attacks the business for doing so.

Posted by: Eric Knight | Jan 17, 2018 12:40:46 PM

Report is obsolete. The Trump Effect has desperate employers hiring felons in a mssive labor shortage, likely to worsen this year and next. As the toxic effects of Harvard Law School radicalized Obama work their way out of the economy, this concern will resolve.

This effect is even overwhelming the real obstacle, which is tort bar claims of negligent hiring for any adverse event caused by the employed felon. Employers n longer care, or have no choice, but to hire them.

In addition to the Trump Effect on the economy and the labor shortage, Trump is deporting or deterring illegal aliens that took their jobs. That second effect will also increase with time. Black youth unemployment under Obama? 40%. The same now? 16%.

Democrats are freaking out as government dependency is melting, and people are getting more well to do.

Posted by: David Behar | Jan 17, 2018 1:10:57 PM

Picking at nits*

Former offenders , rather than ex-offenders🤣
They didn’t undo the offending ; hopefully they stopped⚖️

* 🤣 Because that’s what Virgos do 😇

Posted by: Docile the Wimpy Terrorist In OR | Jan 17, 2018 1:45:58 PM

Rehab of sex offenders. Make them college presidents.

https://www.thecollegefix.com/post/41045/

Posted by: David Behar | Jan 18, 2018 6:26:57 AM

One thing States should do to help ex-prisoners get jobs is make them temporarily ineligible for unemployment insurance (UI)-- for, say, their first six months' of employment. This would noticeably reduce an employer's reluctance to take a chance on hiring an ex-prisoner, because if an ex-prisoner new employee "didn't work out" he could be let go without the (often quite painful) consequence of the employer's UI taxes increasing.

The current UI system makes all workers eligible for unemployment insurance payments when they lose a job, even a job held for only a short time. The UI system charges employers for all UI payments to their ex-employees plus overhead (commonly on what amounts to an installment plan, by adjusting an employer's UI tax/premium rate; but for some employers like 501(c)(3)'s which so elect, by billing them directly for payments to ex-employees).

UI taxes/premiums are especially onerous for small businesses and since they are "experience rated" (meaning much higher for employers whose employees have shorter tenures) they put a lot of pressure on employers to be very picky in hiring. It is easily possible for an employee let-go soon after hiring to ultimately cost the employer much more in UI taxes than in wages and benefits.

Briefly excluding ex-prisoners from UI coverage would help them get jobs by giving employers the freedom to "try them out" in a job at no higher cost than wages actually earned (including ordinary payroll taxes, etc.). Avoiding UI tax on those wages (quite apart from the chance of higher UI taxes later if the ex-prisoner were let go shortly after hiring) would actually make an ex-prisoner a bit (5-10%) cheaper to employ at first, even at the same wage rate as other workers.

Excluding an ex-prisoner from UI for a few months would not be a imposing a "disability" (like a SOR requirement) but actually giving him a bonus to offer a prospective employer: he could say "hire me, give me a chance to prove myself-- you will save a little money at first, and if you aren't satisfied, I won't force you to pay higher UI taxes on your whole payroll for years to come!"

There might be a few unscrupulous employers who would hire ex-prisoners and then lay them off right before they became eligible for UI. However, even that sort of treatment would redound to the benefit of an ex-prisoner-- because he would gain experience and a work record while employed, which would help him greatly to get his next job-- at which he would be eligible for UI, his UI-ineligibility period having been exhausted.

One advantage of this scheme is that it would have an effect similar to giving grants to employers to hire ex-prisoners without actually requiring the expenditure of taxpayer funds.

Posted by: Please Don't Mention | Jan 25, 2018 10:16:39 PM

Oh, yeah-- I'm an engineer with an interest and background in law.

Posted by: Please Don't Mention | Jan 25, 2018 10:18:13 PM

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