President Obama’s Council of Economic Advisors (CEA) wants to help released prisoners get a job. The CEA’s solution is the same as the Obama administration’s solution to nearly every problem: raise the federal minimum wage, in this case from $7.25 to $12 an hour by 2020.
In other words, White House economists think employers who won’t hire ex-convicts for $15,000 a year will jump at the chance to pay them $25,000 a year, plus another $4,000 or so for their Obamacare coverage.
This is what happens when liberal dogma trumps economics and common sense.
The CEA just released a new paper, “Economic Perspectives on Incarceration and the Criminal Justice System,” which focuses on the rates of incarceration in the United States, their impacts on society and families (especially among minorities), and the widely recognized need for criminal justice reform.
The paper makes the case that longer sentences don’t necessarily reduce crime, which is almost certainly true.
Before a convicted offender can receive a “longer sentence,” he or she has to be caught, tried, and convicted. There’s a lot of wiggle room in that process. And as National Public Radio reported last year, “for most major crimes, police don’t even make an arrest or identify a suspect.”
But for those who are caught, convicted, and eventually released from jail, recidivism is very high—a U.S. Bureau of Justice Statistics study places it at 76.6 percent five years after release.
The public policy questions revolve around (1) how to reduce the number of people committing crimes in the first place; (2) ensuring the punishment fits the crime, something we haven’t been very good at; (3) supporting the families when parents are serving time; and (4) helping ex-offenders reintegrate into society and find meaningful—and lawful—employment.
The challenge over the fourth point is daunting. Prisoners often lose any skills they had before entering. Education levels are usually very low. And many employers are understandably reluctant to hire released prisoners, especially those who were convicted of certain types of crimes (e.g., robbery and assault).
The only bargaining chip these ex-convicts have is the price of their labor. And yet Obama wants not just to take away that chip, but to essentially double the cost (when Obamacare is included) of hiring them.
CEA Chairman Jason Furman told NPR’s Scott Simon, “there’s a very strong relationship between higher wages and less crime.” When Simon asked about the possibility that increasing the minimum wage could reduce the number of jobs, Furman responded that economic research has “consistently found that for, you know, reasonable increases in a minimum wage, it has little or no effect on total employment.” (emphasis added)
And that is almost certainly true—for “reasonable increases.” If the government were raising the minimum wage from $7.25 to, say, $7.50 or maybe $7.75 an hour, there would likely be very little job displacement. But that’s not what the CEA is proposing; it’s suggesting a 65 percent increase over three years.
How many of us could demand a 65 percent increase from our employers and expect to keep our jobs?
Furman says higher wages would likely reduce the recidivism rate, but that’s only if ex-cons can find and keep a job. Data suggest that more than half of ex-offenders remain unemployed more than a year after their release—and that’s at the current lower minimum wage. Would making employers pay them $12 an hour really improve their chances?