Stories

Second Chance Hiring Strengthens Workforce and Could Add $87 Billion to the Economy 

March 31, 2023

One in three working-age Americans has a criminal record — that’s more than 70 million people. After these individuals pay their debt to society and attempt to reenter the workforce, they face challenges that often leave them unemployed or underpaid, which costs the economy between $78 and $87 billion every year.

Giving this population a second chance could have benefits that extend far beyond an individual and their family. Accessing meaningful employment opportunities can have wide-ranging effects — and could help strengthen communities and the broader American economy.

But for many people with criminal records, there are roadblocks to reentering the workforce: discriminatory hiring practices, regulatory hurdles, and a complicated system that makes it extremely difficult and expensive to expunge criminal records. When filling out an application, these individuals often need to check a box disclosing their criminal history, which can automatically disqualify them from certain jobs. A year after leaving prison, almost half are still unemployed, and those who do find work are often making significantly less than their peers. “We found that time in prison sets people on a permanently different and lower income trajectory relative to the general population,” says Ames Grawert, Brennan Center Lawyer. “The same held true for lower-level criminal records. Even a misdemeanor conviction can reduce someone’s annual earnings by around 15 percent.”

JPMorgan Chase, through their PolicyCenter, works to advance federal and state policy changes to help remove barriers to economic opportunity and provide the opportunity for people with criminal backgrounds to move past their mistakes once they’ve paid their dues to society.

Second Chance reforms are focused on helping individuals with criminal records get back to work — and it begins with fair hiring. For example, candidates often need to check a box on a job application to disclose a criminal record. By “banning the box,” JPMorgan Chase does not ask for this information. “It’s important so that they get a fair shot — so that their skills and their talents speak for them,” says Michelle Kuranty, Executive Director, New Joiner Experience, JPMorgan Chase. And the results are telling: over the last three years, 10 percent of JPMorgan Chase’s new hires in the U.S. (over 4,600 in 2022) have had criminal backgrounds that had no bearing on the roles they were hired to perform.

“We have too many people on the sidelines because they have some type of criminal record that is keeping them from being able to get their foot in the door for a job, find stable housing, or even get an education that will help them get a better job,” says Nan Gibson, Executive Director PolicyCenter, JPMorgan Chase. “We’ve changed our own business practices to make hiring people with criminal records part of our inclusive hiring strategy.” By providing these individuals with competitive wages, benefits, and career pathways, their finances improve, and they are able to contribute to the overall vitality of the American economy.

Clean Slate Efforts

Clean Slate legislation establishes a framework for automatically sealing or clearing eligible criminal records, opening opportunities for more people to enter the workforce. JPMorgan Chase is pairing its own more inclusive hiring practices with policy reforms for Clean Slate legislation.

“We need public policy changes to create systemic change for people and communities across the country,” says Gibson. “Every state has their own process for either sealing or expunging records. In a state without Clean Slate legislation, an individual would have to hire a lawyer, petition a court, and wait for the court to get back to them about their decision.”

This process is expensive and can take months or years. Laws that automatically clear records allow people to find better jobs faster — one study found that average earnings increased by 20 percent over two years for people whose records were cleared. And when more than 70 million Americans have a record signaling that a system that includes automation is the only way to work through the backlog efficiently.

Looking Ahead

JPMorgan Chase is a founding member of the Second Chance Business Coalition, which partners with over 45 companies to create an equitable future through advancing policy and changing hiring practices.

“Everybody plays a role,” says Gibson. “I often say policy is a team sport. We need all the players on the field playing their position in order to be able to advance policy effectively, and all of our team members have done a phenomenal job of playing their position really well.”

JPMorgan Chase launched a pilot expungement clinic in Chicago in 2022. The turn out and the positive response from the community demonstrated the desire for local action, and the firm expanded the expungement clinic to Community Branches in Columbus, Chicago and Wilmington.

“Now, we’re in the process of replicating that and scaling that to other communities,” says Gibson. “When one in three working age Americans have some kind of criminal record, all of us know somebody who’s been touched by the criminal justice system—and we need to be able to create a new system where people can have a second chance in a way that makes sense.”

Learn more about the JPMorgan Chase Second Chance efforts.

Learn more about the JPMorgan Chase PolicyCenter.