Carnell Carter fills out a self-survey of his work skills while working at a branch office of the state's WorkSource agency the Pierce County Community Justice Center in Tacoma, Wash. Ted S. Warren/AP

New research shows how keeping people with criminal records out of the workforce costs us.

Beleaguered former presidential candidate Hillary Clinton was in the news again recently when a excerpt from her 1996 book It Takes a Village turned up on Twitter. In the selected passage, Clinton described prison labor in questionable terms during her time living in Arkansas’s governor’s mansion in the 1980s:

Concerned netizens have been debating passionately about whether the above passage constitutes slavery, and rightfully so. But it’s also worth questioning Clinton’s assumption that the prison laborers were unsafe to begin with. Ultimately, she came to the realization many employers arrive at, which is that people with criminal records do not necessarily make for bad or unsafe workers. But it’s those kinds of assumptions that keep people with criminal records excluded from the workforce, especially when they’re released from prison, and at great consequence to the economy.

The belief that a criminal background equals risky work performance has been the prevailing ethos for employers and policymakers for decades—at least for the traditional workforce. Alternately, when it comes to prisons, wardens and policymakers love taking advantage of incarcerated people’s labor to maximize profits and to save the state money. Yet, as Clinton learned (and as she clumsily expressed), even people with the most serious felonies on their records have often been found quite reliable on the job, and several solid studies support this.

Still, as many as three out of four people remain unemployed a year after released from prison, and just 12.5 percent of employers say they will accept job applications from an ex-offender, because they think it’s bad for business. A new report from the ACLU argues that employers’ failure to hire ex-offenders is the worse business move: Our gross national product suffers a roughly $80 billion loss annually because of employment discrimination against ex-offenders. That also leads to lost tax revenue for cities, which already suffer from the huge jail costs that come with the inevitable recidivism that results from ex-offenders’ unemployment. As the ACLU report reads:

A study conducted in Philadelphia concluded that employing just 100 more formerly incarcerated individuals would lead to a $2 million reduction in the city’s correctional costs. A Florida study estimated that increasing employment for individuals released from state prisons by 50 percent would save the state $86 million annually in costs associated with future recidivism. Similarly, Pew Research Center has suggested that if states could lower recidivism rates by just 10 percent, they could save an average of $635 million annually.

So while the prison industry is making a killing (with the Trump administration’s blessings), cities and states are losing out. Meanwhile, employer anxieties basically dictate hiring policies, but then leave cities to pick up the tab for the victims of those exclusionary-yet-delusionary practices. According to a study published in May from workforce researchers at Northwestern University, in many cases people with criminal records are no more likely to be fired for misconduct than people without records. The exception: sales workers, who are slightly more likely to be dismissed for misconduct. But all workers with records are less likely to quit, saving employers on turnover costs.

Employers are “overreacting” to applicants that check off for criminal records, says Deborah Weiss, the study’s lead researcher and director of Northwestern’s Workforce Science Project. And judging by the report, such overreactions not only cost cities, but also the employers themselves. The study attempts to quantify the cost-benefit calculation employers make when deciding to hire someone with a criminal background:

The National Retail Federation estimates the loss from each dishonest employee case is about $1,546. Only sales workers with a criminal record pose an excess misconduct risk: about 5.9% of sales workers with a criminal record are discharged for misconduct compared with 3.1% of other sales workers, a difference of 2.8%. An employer who hired a worker with a criminal record rather than a worker without a record increased its expected theft-related costs by about 2.8% of $1,546, or $43. The same employer saved about $746 in turnover costs on that worker. Of course, misconduct includes other behavior both more and less serious than theft, but the gap between $43 and $746 is large.

In other words, the amount that an employer saves through the lower turnover of hires with criminal records, $746, is much higher than the amount an employer risk losing because of an act of misconduct, such as stealing work products. So, employers might as well bet on the person who’s going to stay with the company longer, even if that might mean the employee swipes a few staplers.

“The amount of money [companies] could make through [an employee’s] longer tenure is really significant,” says Weiss. “There is a slightly elevated misconduct risk. The problem is it’s very hard to quantify what that risk is, because we don’t know what kind of misconduct is involved. Misconduct is a term that in the employment setting can include anything from being chronically late to assaulting a coworker. Everyone assumes it’s assaulting a co-worker, but it isn’t necessarily. Meanwhile, the elevation in risk is quite small.”

In other words, there are reasons for employers to scrutinize job applications, to screen for potentially bad employees, but a criminal background check is far from the best instrument for that kind of scrutiny. Both the ACLU report and Weiss’s study agree that it’s imperative for the employer to look beyond to examine their own workforces to identify and tailor positions toward people who could fill them despite any anxieties about criminal potential. For example, you might not want to hire someone with a history of substance abuse offenses to work in a pharmacy, but they could work in a medical facility as a data processor.

The ACLU report profiles Koch Industries, Inc., which one of the world’s largest employers. Despite controversial political activities of its conservative founders, Koch as been a powerful advocate for criminal justice reforms, including hiring ex-offenders.

“I think you need to be careful with whomever you hire, whether they have a criminal record or not,” says Mark Holden, senior vice president and lead attorney for Koch Industries. “If they have a record you need to do your due diligence, but I do think that a lot of times the blanket prohibitions are obviously shortsighted, both for the employer and definitely for the employee and for society as a whole. You should also should consider whatever the person’s background is, the crime they committed, and mistakes they made in context. At the end of the day, you should pick the person who’s best for the job whether they have a criminal record or not.“

Even somewhat understandable reasons why employers avoid hiring ex-offenders—such as avoiding a negligent hiring lawsuit—are apparently overblown.

“You hear all sorts of crazy numbers going around like a $10 million negligent hiring judgement against somebody with a criminal record, and it’s true, but there are also negligent hiring judgements against employees who didn’t have a criminal record,” says Weiss. “We have zero hard numbers on this. Everything we were able to find on negligent hiring was just pure anecdotes. Yes, there are legitimate reasons for not [hiring certain ex-offenders], but we would like employers to assess the legitimate reasons based on hard data rather than superstition.”

This conversation can’t go on without mentioning the fact that the mass incarceration crisis in the U.S. is no mere matter of crime and punishment. Thousands of people have been imprisoned not because they did something wrong, but because they were poor and couldn’t afford a lawyer. By the same token, there are a lot of people who don’t have criminal records because they had the financial resources to mount a good legal defense. To leave that out of the hiring calculation is to mute the loud reality of the nation’s unparalleled carceral situation today, and it’s something every employer, from the Koch brothers to the Clintons, should take seriously.

This article is part of our project “The Presence of Justice,” which is supported by a grant from the John D. and Catherine T. MacArthur Foundation’s Safety and Justice Challenge.

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