The following post is written by Cortney Charleston, former WPBA VP of Publications.  He is currently working at Nielsen, and his email address is cortney.charleston@alumni.upenn.edu.

Throughout the last four years, the City of Philadelphia, through the visionary leadership of Mayor Michael Nutter, has become increasingly preoccupied with connecting formerly incarcerated individuals to gainful employment. Looking to the numbers, it is evident that the sizeable ex-offender population in the city threatens macroeconomic and social stability. According to an Economy League of Greater Philadelphia’s there are projected to be approximately 40,000 individuals released annually from local, state and federal prisons back into the City of Philadelphia. This population stream has led to around 50,000 adults on probation or parole living within the city limits.  

Although an elementary calculation with a degree of inaccuracy, I will define the Philadelphia labor force as individuals between the ages of 18 and 64, subtracting those below the average age of high school graduation and above the age of retirement required to receive unreduced Social Security benefits. The size of that population segment in Philadelphia was 996,860 in 2010, bringing the portion of the labor force with a criminal record in Philadelphia to 5% based upon the estimate of re-entering persons.

With the employment opportunities of this population effectively limited, there is a high probability that a large portion of Philadelphia ex-offenders will find themselves incarcerated once again in the future. This trend coalesces as a semi-permanent prison population that incurs substantial societal costs, both in terms of monies appropriated to maintain and operate local and state prisons, as well as non-monetary costs to families and communities. Also, because recidivating individuals are incarcerated for new offenses, there is an additional cost related to the perpetration of these new crimes.

Taking all of the above information into consideration, should policymakers be able to devise ways of ensuring a larger number of ex-offenders are able to locate employment, it will result in a net gain for society through simultaneous reduction in prison spending and increase in tax receipts from the newly employed.

Figure 1: Estimated 2011 Former Inmate Average Annual Earnings

Figure 2: Estimated Former Inmate Average Post-Release Lifetime Earnings

Figure 3: Estimated Wage Tax Contributions of the Formerly Incarcerated

Figure 4: Estimated Sales Tax Contributions of the Formerly Incarcerated

            As illustrated in the above tables, sustained employment will produce tremendous income gains for the formerly incarcerated. More importantly (for policymakers), there is a significant contribution former inmates are able to make to government coffers by way of wage and sales tax payments, provided a number of individuals in this population be able to find and maintain employment upon release. The numbers provide a very simple argument as to why we as a society should care about the reintegration of ex-offenders into society; all humanitarian concerns aside, it will save us money, and those savings can then be used for a variety of other purposes, whether it be more spending for other public goods and services or tax reductions for households and businesses.

Source: The Economy League of Greater Philadelphia