Former prisoners have some of the worst health, economic and social outcomes of all Australians.
These factors make it more difficult for former prisoners to re-integrate into society and avoid going back to jail — a problem clearly shown in the figures.
About 60 per cent of people in prison have been there before, with nearly half the prisoners released in 2012-13 returning to jail within two years, according to the Productivity Commission.
With the social, economic and financial stakes so high, you would think that all government policy would be pushing in the same direction to make it easier for former inmates to find work.
But there is one policy that actually renders many unemployable and locks them in a permanent underclass: the minimum wage.
Minimum wages make it uneconomic for businesses to employ people with lower productivity, which is why the less educated and less skilled are hardest hit. Indeed, the law already recognises this problem by allowing disabled people, apprentices and youth to be paid a portion of the full adult rate.
The same problem exists for former prisoners. It's not just that businesses are reluctant to employ someone with a criminal record. But criminals are also typically less productive than the average worker — many of the attributes that make them statistically more likely to commit crime also make them statistically less productive. They tend to have poor work histories. They tend to be worse educated than their peers. A period in prison means they might have lost relevant skills. Their higher drug and alcohol use and higher likelihood to be in unstable housing make matters even worse.
Put the minimum wage on top of this and it becomes virtually impossible for many former prisoners to find work — particularly those locked up for a long time and on numerous occasions. And if someone can't find work they start to entertain alternatives, such as crime. That's not an excuse — of course. But it is part of the explanation for the worryingly high reoffending rates.
A 2013 study by two economists at Boston College, Andrew Beauchamp and Stacey Chan, found compelling evidence for a relationship between the minimum wage and crime. Looking at evidence across the United States between 1997 and 2010, they found that one effect of an increased minimum wage was an increase in theft, drug sale and violent crime. The effect was even stronger for people with low skills and prior criminal connections — exactly the sort of people who have been incarcerated.
Even for people who are employed, Beauchamp and Chan found an increase in criminal activity as they lost income due to reduced hours — precisely what economists believe occurs when a minimum wage is increased.
Far from supporting re-integration, the minimum wage exacerbates our crime problem by making it more difficult for former prisoners to get work.
Some people argue, to the contrary, that an increase in the minimum wage will reduce crime by making paid work more attractive. But this gets the problem the wrong way around. Yes, higher wages make working more attractive. And yes we want people to earn more. But the problem for former prisoners is obtaining a job. By increasing the cost of employing former prisoners the minimum wage reduces the number of them employed, some of whom will look for alternatives such as crime.
Why should we care about this now? One of the least discussed stories is the fact Australia's prison population is ballooning out. There are 36,000 prisoners across the country. At 196 prisoners per 100,000 adults, this is the highest since just after federation. The imprisonment rate has increased nearly 20 per cent since 2012.
And prison is expensive. Every single prisoner costs the taxpayer $100,000 per year. Every prisoner is a loss of human potential. It is in everyone's interest — the ex-prisoner, community and government — for someone who has served their sentence to engage in productive activities, such as employment, rather than ending up back in jail.
None of this excuses the crime. The victims of crime are the victims, not the criminals. Indeed, what a growing body of research highlights is that many criminals consciously choose to commit crime. That's a decision they make as individuals. No-one forces them to break the law. And when they do, they should be punished, both for their offence and as a deterrent to others.
We need to be tough on crime. But once criminals have served their sentences, we should allow them to work.
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