Why second-chance programs can lead to a more robust workforce

Brian Sozzi and Julie Hyman break down how the solution to America’s labor shortage problem could be an active campaign in hiring formerly incarcerated people. Watch as the panel discusses the benefits this strategy could have on the economic recovery.

Video Transcript

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JULIE HYMAN: Well, as we look at those jobs numbers again here this morning and the shortfall that we continue to see in the jobs market, there have been so many reasons that we've talked about behind this, right? Lack of child care, women leaving the workforce, maybe people just don't want to do the same jobs they once did. Maybe they don't have the right skills to do them.

There is one area of the workforce, though, that could potentially help. And that is the formerly incarcerated or people with a criminal record. And Brian, this is something that first sort of came to our attention again after we talked to Peter Quigley, the CEO of Kelly Services, which recently introduced a program targeting these kinds of workers.

PETER QUIGLEY: One of the leading companies in this area is Toyota. We did a project with them. It's still ongoing with-- in Kentucky. And Toyota took a second chance initiative and was able to increase its talent pool by 20%, increase its diversity by almost 10%, and improved its retention by 70%, because, Julie, these second chance workers are thankful, they're reliable, and they're loyal.

JULIE HYMAN: And I had the chance, by the way, to speak to some Kelly Services employees who had criminal records. And indeed, they were enthusiastic. Some of them longtime workers, were enthusiastic about their employment there. The latest figure that's available, Brian, from 2018 is that the unemployment rate among formerly incarcerated people is 27%. So, you know, some of that has to do just with companies needing to sort of broaden their horizons, if you will, as to who they would hire.

BRIAN SOZZI: Yeah, no, it makes sense. You have these workers out there. They're capable of doing it. Why not give them a shot? And really, look, we just had the Labor Secretary on, Julie, and clearly, this is an issue that is very passionate for him and he's very much invested in.

JULIE HYMAN: Yeah.

MARTY WALSH: As a former mayor of Boston, a lot of the people that I brought working to meet with me in City Hall were people that were formerly incarcerated or struggling with addiction or struggling with substance use disorder. We have-- I'm asking employers to take a look at these folks, give them an opportunity, give them a chance, because some of the folks that we brought on City Hall-- and I created some programs as mayor-- the best workers you could ever have. Because people want to rebuild their life. They want an opportunity. The problem is they don't have that opportunity. So I'm asking people to do that.

JULIE HYMAN: And there is now an actual, actually, a Second Chance Business Coalition that's led by the head of JP Morgan, obviously, Jamie Dimon, as well as the head of Eaton Corporation. So there are more companies that are coming on board with these kinds of efforts.

BRIAN SOZZI: Yeah, long overdue, I would say, Julie, because clearly, this would be helpful to start getting some better than expected jobs report. I mean, today was just really another disappointing report and another, I would say, slap in the face to the stock market bulls.

JULIE HYMAN: Yes, although if you look at the markets today, you know, things seem OK, right? We're not seeing much change in markets right now. If you look at stocks, we've got a mixed picture here. The NASDAQ's down a bit. But we have the Dow and the S&P 500 on the rise. So it's not-- there does not seem to be a clear conclusion that is being drawn by the markets on this report. If you look at yields, though, they're going a little bit higher. I think the last I saw, we were around 1.6%.

BRIAN SOZZI: Yeah, you know, it's lower, too. I'm also watching-- I love our trending ticker page. I think it's the coolest thing, really, on our site, among many other things. But Tesla-- Tesla, Julie, big investor day. A lot of hype going into this thing. Tesla shares are down almost 2% right now. And really, the week that has been has gone to GM. GM shares up about more than 7%, laid out a bunch of electric vehicle plans. Tesla tried to drive a little hype yesterday, Elon Musk saying he would move his headquarters. Sales might continue to grow 50%. Market doesn't care.

JULIE HYMAN: Well, if you're looking at the longer term chart of those two companies, hmm, only one of those companies and CEOs is laughing his way to the bank, especially with SpaceX reportedly receiving a $100 billion valuation as well here today.

One other thing I want to mention in the markets is what we're seeing in oil prices, which I know you have been watching very closely recently because the effect on corporate margins and the implications for what we're going to hear from companies going into this earnings season, which really kicks off in earnest next week. And that is crude oil prices, WTI hitting $80 a barrel for the first time going back to 2014.

Now, it looks like they've gone back below that level for now. But they definitely have been flirting with that level. And that is something that companies are going to continue to grapple with. I did see some research this morning showing that sort of the amount of household budgets that goes toward something like gasoline is much lower than it used to be. So that's something to consider as well. All right--