Politics

U.S. Incarceration Rate Is Limiting Job Growth


The high level of U.S. incarceration and its disproportionate impact on Black people are a drag on the economy at large that can inhibit the country’s resilience and its global competitiveness, said Raphael Bostic, president of the Federal Reserve Bank of Atlanta.

Bostic spoke Tuesday at the latest in a series of virtual events on Racism and the Economy, this one focused on the criminal justice system. The 12 district banks of the Federal Reserve started the series during the covid-19 pandemic to examine structural racism in the U.S. and advance actions to dismantle it. Past series events focused on racism in entrepreneurship, housing, education and employment.

The U.S. has the highest prisoner rate in the world with 639 prisoners per 100,000 population as of May 2021.

African Americans, who represent about 13 percent of the population, are incarcerated in state prisons at 5.1 times the rate of whites, according to data from the Sentencing Project, a nonprofit working to change the way Americans think about crime and punishment. The disparity is more than 10 to one in Iowa, Minnesota, New Jersey, Vermont, and Wisconsin. In Maryland, the prison population is 72 percent African American. More than 50 percent of the prison population is Black in Alabama, Delaware, Georgia, Illinois, Louisiana, Michigan, Mississippi, New Jersey, North Carolina, South Carolina, and Virginia

“Incarceration is a drag on our ability to achieve our maximum-employment goal,” Bostic said. “Incarceration and how we execute criminal justice inhibits global competitiveness.” Incarceration and who it targets in the U.S. “can have the effect of exacerbating race-based employment, income and wealth disparities, which can limit economic mobility and resilience and ultimately constrain labor markets and compromise the performance of the overall economy.”

The largest share of U.S. prisoners in federal prisons are of African-American origin, according to Statista. As of 2018, there were close to 409,600 Black, non-Hispanic inmates compared to 394,800 white. The U.S. states with the biggest prisoner population in 2019 were Texas, California and Florida.

Black Americans are disproportionately targeted by the criminal justice system, Bostic said.

Disproportionate incarceration rates have contributed to the difference between the white and Black unemployment rate — 5.2 percent and 9.2 percent — said Boston Fed President Eric Rosengren.

The U.S. may need to revise what it considers criminal offenses, especially when it comes to non-safety issues, Rosengren said, according to a Bloomberg report. With marijuana now legal in many states, it may make sense to examine if other things can be decriminalized.

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Criminal records can affect people’s ability to get jobs and integrate into society for the rest of their lives. Bostic suggested treating criminal records like credit reports, which are wiped clean after seven years.

Maximum employment is one of the mandates handed to the Fed by Congress.

 The U.S. aimed to abolish slavery with the Thirteenth Amendment of 1865 but forced labor is still legal as punishment for a crime. “With forced labor remaining legal as punishment for a crime, the legacy of slavery and racism persists in the U.S. industrial prison complex,” according to Freedom United, a community dedicated to ending modern slavery.

Photo credit: LightFieldStudios / iStock



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