Ex-Convicts Help Companies Fill Need for Skilled Labor

By Jeffrey Sparshott Features Dow Jones Newswires

Erickson Cos., a Chandler, Ariz., based construction firm, has hired almost 30 former inmates from Arizona state prisons over the past year to build frames for new homes, an effort to cope with skilled-labor scarcity.

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"We're searching for every alternative avenue that we possibly can to help solve this labor shortage," Rich Gallagher, Erickson's chief executive, said in an interview.

Erickson is part of what appears to be a nationwide trend. As the jobless rate falls, employers in places including Arizona, Indiana and Maryland are scouring the fringes of the labor market for able-bodied workers, including ex-offenders.

Erickson, which has about 250 employees in Arizona and roughly 1,000 nationwide, has been recruiting directly from corrections department job fairs for prisoners nearing release. Karen Hellman, director of inmate programs and re-entry, said there has been a noticeable uptick in companies looking to hire inmates this year.

National data on hiring of ex-offenders isn't available, but other state correctional systems across the U.S. and training programs for ex-offenders report similar experiences.

"I've never dealt with employers who are more willing to hire ex-felons, " said John Nally, who started working at the Indiana Department of Correction in 1967 and is now its director of education. "It is a totally different landscape when you have an unemployment rate of 3.6%. We have all these people in construction who are literally begging for workers."

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Indiana's unemployment rate was 3.6% in April and fell to 3.2% in May.

The U.S. unemployment rate fell to a 16-year low in May and the number of job openings climbed to a record in April, according to separate Labor Department reports, underscoring tightness in the labor market. In a recent survey by the National Federation of Independent Business, nearly half of small businesses said they could find few or no qualified workers for the positions they were trying to fill.

"Contacts across a broad range of industries reported a shortage of qualified workers which had limited hiring," the Federal Reserve said in its most recent summary of economic conditions.

More than 600,000 sentenced prisoners nationwide are released from state or federal prisons each year. Research shows that most struggle to find steady work and stable housing -- and frequently end up offending again.

The vast majority -- nearly 90% in the Indiana study -- of ex-offenders have a high-school diploma or less, putting them at a distinct disadvantage among a population that already has higher unemployment and lower participation rates than those with at least some college.

But as the labor market tightens, their fortunes improve.

A review of Indiana state prisoners released in 2005 found that nearly half were rearrested within five years. "Ex-offenders would likely become recidivists if they were unemployed after release from prison," the study said. "At its core, postrelease employment was the major predictor of recidivism."

Of those released in 2005, 92% to 97% didn't hold a job during the year they got out of prison, the Indiana study found. That fell to more than 60% by 2007, when the national unemployment rate was also low and the labor market tight. Unemployment among those released in 2005 was back up to 80% by 2009, after the recession hit. Americans with criminal records still face significant barriers to finding a job.

Many employers, for example, won't hire someone without at least a high-school diploma. More than one-third of the ex-offenders in the Indiana study lacked such a credential. Businesses also are often leery of hiring anyone with a criminal background, sometimes because of regulations, legal liability concerns or worries a person will repeat past criminal behavior. Employers frequently complain potential workers can't pass a drug test.

The right and left are making efforts toward criminal justice reform.

That includes initiatives to promote hiring as a means of rehabilitation, to lower crime rates and save money on incarceration costs.

"Slowly but surely there's a mind shift about people who come out of prison," said Mark Holden, general counsel at Koch Industries, the Wichita, Kan., manufacturing conglomerate perhaps better known for the conservative activism of its owners, Charles and David Koch. One priority for the group is criminal justice reform. "Hopefully we will see more opportunity [for people with criminal records] going forward."

The situation shows signs of improving for ex-offenders in some parts of the country.

"What we've found is that employers are beginning to open up to individuals with criminal backgrounds," said Kent Kramer, president and chief executive of Goodwill of Central and Southern Indiana. He said former inmates need stable housing, health care, a track record of employment and some marketable skill if they want a steady job with a living wage.

Timothy Phillips was released from Maryland's prison system in February 2016 after 17 years behind bars for murder. The 48-year-old quickly found a job at a retailer but was later let go after a background check turned up his criminal history.

He participated in Baltimore's Jump Start program, an 87-hour construction pre-apprenticeship. Job placement director Kate McShane estimates three-quarters of its enrollees have criminal records.

Mr. Phillips graduated from the program in February and the same month started working at Kogok Corp., an Upper Marlboro, Md., company that manufactures and installs commercial duct work. His work as a sheet metal mechanic feels like a career, not just a job, he said.

"It seems that you do have companies like Kogok that may not mind hiring someone with a criminal background -- it seems like companies out there do exist," Mr. Phillips said. "It isn't that hard if you're determined."

In the Baltimore metropolitan area, which includes more suburban Columbia and Towson, the unemployment rate is 4.1%, leaving some companies scrambling for workers.

Daniel Warner, president of Loganville, Penn.-based Structural Restoration Services Inc., said his company since May has hired seven Jump Start graduates for jobs in the region, its first experience with the program.

"The labor market's really tight," he said. "We have tried just about every avenue of hiring we can figure out."

So far, five have stuck with the building repair company -- not much different than other hires off the street -- and Mr. Warner said when he needs additional workers, he would consider recruiting from the program again.

"These are guys who have really made a decision to change their life," Mr. Warner said.

Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com

(END) Dow Jones Newswires

July 27, 2017 08:14 ET (12:14 GMT)