In-Depth Data Analysis: The Workforce Impact of Second Chance Hiring

Right now we have 11.5 million open jobs in the United States, but only about 6 million unemployed. Moreover, labor market participation is not yet at par with what it was before the pandemic.

Our America Works data center captures these national workforce trends. This page dives into the latest data showing how the lack of opportunities for people with criminal records is impacting labor market participation and exacerbating the labor shortage crisis in the wake of the pandemic. .

More people in prison means fewer people working.

  • 4.5M

    Americans on probation or parole

  • 1 of 3

    Adults with a criminal record

  • 77M

    Americans with a criminal record

The United States has the highest incarceration rate in the world. Nearly 2 million Americans are incarcerated in the US correctional system with an additional 4.5 million on probation or parole at any given time.

The majority of those incarcerated are working-age men, a demographic whose participation rate has been declining for years. The high incarceration rate is a significant barrier to increasing our labor force participation rate.

  • 25%

    Percentage of convictions not resulting in prison terms

  • 600,000

    Individuals released from prison each year

More amazing is the impact a criminal record can have on a person’s job prospects. Each year, nearly 600,000 people are released from prison. At the same time, nearly 25% of convictions do not result in prison sentences. A total of 77 million Americans have a criminal record – an unfortunate fact because having a criminal record makes it harder to find a job. For some job requirements, people with criminal records are completely excluded.

Stable jobs for formerly incarcerated reduce recidivism and benefit society.

In a study of recently released prisoners, the Bureau of Justice found that 81.9% will be rearrested within 10 years of release. However, other studies have shown that employment is directly correlated with fewer cases of recidivism or if someone is convicted of a crime again. Moreover, stable and quality jobs are the most likely to reduce recidivism.

Employing people with criminal records benefits society. Workers are more likely to achieve stability and less likely to return to prison, and companies have access to an often overlooked labor pool. Giving returning citizens a second chance can also lead to a reduction in staff turnover. At the same time, crime is decreasing while employment rates are increasing, directly supporting a more prosperous society.

  • 60%

    Percentage of returning citizens unemployed from time to time 4 years after release

  • 15%

    General population unemployment at the height of pandemic unemployment

Formerly incarcerated people experience extreme unemployment rates, hovering around six out of ten unemployed between the time of their release and four years after their release. Compare that rate to the general population, whose peak unemployment rate during the pandemic reached 15%.

Second chance hires can help industries that are suffering from labor shortages.

  • 85%

    HR leaders who say second-chance hires perform the same or better than other employees

  • 81%

    Business leaders who say second-chance recruits perform equal to or better than other employees

While there are some limitations to hiring formerly incarcerated, it is important for companies to know that second chance hiring is taking place across the country, with positive results. Data from SHRM shows that 85% of HR managers and 81% of business leaders say second-chance hires perform the same or better than other employees.

There are a few industries where second chance hiring can be critical. In the months prior to admission to a federal prison, formerly incarcerated individuals are more likely to have worked in administrative support or waste management and remediation services. They also have a relatively large representation in labour-intensive and customer-facing occupations, particularly in construction and hospitality.

Although significant changes occur immediately after release, most individuals will return to these same areas over time. Additional data shows that years after release, employment of former inmates in accommodation and food services, health care and social assistance, and transportation and warehousing declines two percentage points. It also happens that it is some of the same sectors that are bearing the most severe effects of the labor shortage crisis.

The US Chamber and Chamber Foundation’s America Works initiative outlines solutions to the labor shortage crisis that is stifling our nation’s economic growth. There is no single solution. Rather, business and government need to work together to understand the challenges faced by specific populations and industries, and ways to overcome those barriers.

Additional Second Chance Hiring Resources

Guide:​ Employer’s Guide to Tax Credits and Second Chance Hiring Programs

To research:The Business Case for Second Chance Hiring

Case study:America’s Hidden Workforce

Recent Chamber Events:

For small businesses:

  • How Companies Can Implement Second Chance Hiring
  • What to know about second chance hiring

Find more workforce data

Visit our other in-depth data on the current labor shortage crisis and the impact of childcare challenges on our workforce.

About the authors

Stephanie Ferguson

Senior Manager, Employment Policy

Read more

Michael A. Bynum