Wednesday, November 12, 2014

LABOR | Low Participation III (Higher Criminalization Rates)

CityEconomist has suggested demographic changes that could be lowering the labor force participation rate and employment-population ratio. Then we added lower job-finding rates and higher reliance on disability payments, both of which could reflect the extended period of unemployment.

This week we received a privately circulated (by email) chart book for November from Risk Management Advisors LLC. It suggests two other explanations for the declining labor force participation rate, namely failures in the educational system and the high U.S. criminalization and incarceration rates, which especially affect Black workers.

In reviewing the causes of lower labor force participation, CityEconomist should have cited the incarceration rate earlier. We posted on the reasons for high recidivism rates and one way to address the problem but did not connect that to labor force participation rates.

Meanwhile, with the permission of the authors of the chart book, Noralyn Marshall and Alastair Hunter-Henderson, we quote in the next few sections from their article. It presents the argument for considering the higher criminalization rates of the past few decades as a contributing factor to the decline in labor force participation among men - note from the chart above left the high unemployment rates among Black men. Risk Management Advisors argue that incarceration helps explain this high unemployment rate. We return at the end with a Comment.

A Criminal Record is an Impediment to Employment

100 million people have a criminal record and are subject to criminal background checks when they apply for a job (U.S. Department of Labor data).

A Pew Center study estimates racial and ethnic prisoner disparities and estimates that incarceration rates are
  • 1 percent (one in 106) for White men
  • 3 percent (one in 36) for Hispanic men
  • 7 percent (one in 15) for Black men
7 million people are now under correctional control (i.e., probation, parole, or incarceration), including one in 45 White adults, one in 27 Hispanic adults and one in 11 Black adults.

This plays a significant role in employment prospects, even if with no disparate treatment between races.

The United States Has the World's Highest Incarceration Rate

12 million arrests were recorded in 2012 or 1 in 25 of the population.
  • 4 percent were for violent crimes (murder, rape, robbery, and aggravated assault).
  • 36 percent were for simple assault, property crimes, or drug offenses
  • 60 percent, the great majority, were less severe (disorderly conduct, drunkenness, prostitution, liquor laws, vagrancy, loitering, DUI, weapons violations)
Many people who have been arrested, and therefore technically have a criminal record, have never been convicted of a crime

Blacks account for less than 13 percent of the population but account for
  • 28 percent of all arrests
  • 35 percent of the incarcerated population
  • 39 percent of adults under correctional control (i.e., probation, parole, or incarceration)(Source: FBI’s Uniform Crime Reporting Program, RMA and DOJ Statistics )
It is more difficult for them to reenter the work force.

Reemployment Prospects

Incarceration rates in the United States are higher than any other country in the world. The United States has less than five percent of the world's population but almost a quarter of the world's prisoners. Over the last 30 years, the incarcerated population has more than quadrupled. Today, more than 2.3 million men and women are held in prisons and jails, and one-third of the population has a criminal record.
  • For returning workers, the coincidence of inadequate education and criminal records are “baked” into the system, making them structural problems. The increasing complexity of good-paying jobs makes it doubly challenging for individuals facing these growing employment demands to turn their lives around. Many have chosen to give up.
  • For the younger generation, the key forces that shape employment prospects have had their impact long before individuals reach adulthood, (when young people need to take responsibility for their lives). The damage to their employment (and life) prospects happens at an early age, certainly for education, and often for criminal activities.
Both the educational system (at least through high school) and the criminal justice system have failed us. It is clear that any solution goes well beyond more expenditures for schools, police, courts and prisons (we spend more per capita than any other country) and will involve major social reforms, new standards and discipline.

The “international competence” bar has risen and the US is falling behind.

Challenges for the Criminal Justice System 

Testifying before the Equal Employment Opportunity Commission, Amy Solomon, Senior Advisor to the Assistant Attorney General, Office of Justice Programs, U.S. Department of Justice summarized the situation as follows:
Individuals who come in contact with the criminal justice system face significant challenges beyond their interaction with the system. The corrections population in particular consists largely of men who have for many years exhibited a consistent pattern of criminal involvement, lack of attachments to mainstream institutions of social integration, and a multiplicity of interconnected problems.
A snapshot of jail inmates indicates:
  • 68 percent meet the criteria for substance abuse or dependence;
  • 60 percent do not have a high school diploma or general equivalency diploma;
  • 30 percent were unemployed in the month before arrest and almost twice as many were underemployed;
  • 16 percent are estimated to have serious mental health problems; and 
  • 14 percent were homeless at some point during the year before they were incarcerated.
Solomon concludes:
This population faces multiple and overlapping problems. The need for treatment, training, and assistance is acute. It is critical that individuals entering prisons and jails be screened to determine their risks and needs, and that appropriate evidence based interventions are applied during incarceration and after release to the community.
Comment by CityEconomist

The discussion above by Marshall and Hunter-Henderson shows how Black criminalization rates affect employment. Here are a few specific things that governments can do:
  • Decriminalize possession of small amounts of marijuana. Here are the 18 states (out of 51 including DC) that have decriminalized marijuana possession (details from NORML) - AlaskaCalifornia, ColoradoConnecticutDistrict of Columbia, MaineMarylandMassachusettsMinnesotaMississippiNebraskaNevadaNew YorkNorth CarolinaOhioOregonRhode IslandVermont.
  • Eliminate booking for possession of small amounts of  marijuana, and instruct the police to treat the offense like a traffic infraction. New York City's Mayor, Bill de Blasio, has done this. The policy is controversial but widely supported. The New York Times has supported  decriminalization but today has expressed concern about the lack of transparency in the traffic ticketing process - a new problem.
  • Support reentry programs for ex-offenders. In New Jersey, of the nearly 70,000 adults and 8,000 juveniles expected to leave the state's correctional facilities over the next several years,  two-thirds will probably be re-arrested within three years of release. The NJISJ's Prisoner Reentry Initiative seeks to reduce this recidivism.