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«Mining the Gap: Employment Background Checks for Profit and the Racial Jobs Gap Dan McGrath TakeAction Minnesota Bree Carlson National People’s ...»

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P O S I T I O N PA P E R

Mining the Gap: Employment

Background Checks for Profit and the

Racial Jobs Gap

Dan McGrath

TakeAction Minnesota

Bree Carlson

National People’s Action

On the way to her first day at her new job working as a cashier for Target, Kissy Mason got a call

telling her that she need not come in. A standard new employee background check revealed that

Kissy has a record, and as a result, Target rescinded their job offer. Kissy was involved in a domestic dispute for which she received a sentence of probation as part of a plea agreement. Kissy knew that her decision to plead guilty meant she would have a record, but she never imagined that it meant she would be locked out of the job market and unable to provide for her family. Kissy Mason’s story is all too familiar. Kissy is Black, and like so many People of Color in the United States, Kissy can’t get a job.

The Racial Jobs Gap & A Culture of Mass Incarceration Last September, the U.S. unemployment rate dipped below six percent for the first time since 2008 and every major job category recorded gains over the last twelve months. For many, this clear sign of improvement is cause for optimism, but given the stark racial employment disparities in our country, the situation for African-Americans and other People of Color is likely to remain grim. The unemployment rate for Black Americans has consistently been twice that of Whites since the Bureau of Labor Statistics began tracking employment by race in 1954 according to the Pew Research Center. Kissy Mason lives in Minnesota, where racial disparities in employment can be seen in stark relief. Forbes magazine recently ranked St. Paul as one of the easiest cities for finding a job. But, for People of Color, and African Americans in particular, there is nothing easy about finding work in the Twin Cities. In his 2010 study, Unemployment by metropolitan area and race, Algernon Austin finds that African-Americans are three times as

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likely to be unemployed in the Twin Cities metropolitan area compared to the national average of 2 to 1.

The racial jobs gap isn’t a problem that goes without notice. Countless training programs, education efforts, and career centers work every day in our country to help People of Color find jobs. While these programs help some people, they assume the problem of unemployment is the people who can’t get jobs rather than the system of employment in the United States that has produced a 2 to 1 racial jobs gap for as long as we have tracked unemployment by race. This problem simply cannot be the result of individual qualification.

There are also programs that aim to solve the problem by reducing employer bias. Racial prejudice is certainly a factor, but once again, the starkand ongoing racial disparities of unemployment in the United States have not changed, even as racial bias has changed from a social norm to a socially unacceptable exception in our country. ‘Fixing” the people without fixing institutions will never solve the problem. In Racial Discrimination in the Labor Market: Theory and Empirics, Kevin Lang and Jee-Yeon K. Lehmann find that individual prejudice alone cannot account for the racial jobs gap. Programs focused on the behavior of individuals alone do not change persistent institutional racial disparities. They are helpful to many people, and no doubt operate with the best of intentions, but the racial jobs gap is a structural problem.

To understand the problem of on-going unemployment in Communities of Color, we have to look deeper than the readiness of job seekers and the prejudice of the people doing the hiring. Racial disparities come from the systems that govern employment and their interaction with other systems that produce their own persistent racial disparities. Perhaps nowhere in modern America can one see more clearly the desperate nature of structural racism than the criminal justice system and our growing culture of mass incarceration. “I have helped hundreds of people who have a criminal record find work. But it’s tough. Even for those who do everything right, it’s a long road,” says Twin Cities employment specialist, James Cannon.

The United States incarcerates 2.4 million people, more than any nation on earth. Almost 12 million people pass through local jails every year. These statistics alone are more than disturbing, but when one considers the impact of over-policing, prosecuting, and incarceration of People of Color, the criminal justice system can be understood as anything but just. In fact, author Derrick Jensen suggests, “given the rates at which blacks, Latinos, and American Indians, are imprisoned (and on death row), it could be argued that a good part of the judicial and penal syste ms in the United States constitute a giant racist, terrorist organization…that have achieved the segregation of black males-into prisons-on a scale of which the KKK and their puny brethren could only dream”. Many would find Jensen’s understanding extreme, however a 2013 report by The Sentencing Project states that the Bureau of Justice Statistics has found that one in three black men will go to prison in their lifetimes and according to sociologist Becky Pettit, in her book “Invisible Men”, African American men without a high school diploma are more likely to be incarcerated than employed.





Where the persistent racial jobs gap meets the reality of mass incarceration we begin to see the scope of structural barriers to economic opportunity faced by People of Color, and the American economy as a whole. James Cannon, whose criminal record has forced him to encounter the same barriers he helps his clients overcome, is frustrated with the larger system. “The criminal justice system is creating a new caste system that permanently locks people out of the getting a job.” One particularly insidious problem is the relatively new cottage industry of private data firms that mine criminal history records on behalf of employers, and thus profit by perpetuating this

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structural barrier to employment, impacting millions of people, and widening the racial jobs gap.

Data Mining Corporations and Barriers to Employment We live in the era of the internet; previously unimaginable access to information of every kind is now our daily reality. Born into this new era is the data mining corporation. Data mining is a relatively new phenomena that has allowed large corporations to create a market for the collection and sale of public information for profit. Many state and federal agencies have made public records readily available online for a fee in the spirit of expanding access. Data mining companies are simply aggregating this information and selling it at a significant markup to those willing to pay. [1] On the surface, it can be hard to see the problem. These companies are merely compiling information that would be available to any of us and offering this service as a convenience to employers who would otherwise be forced to dedicate their own staff to the task of gathering that same information. The problem is that this new and largely unregulated industry created a market where none existed, and profit from the sale of information collected by public agencies, while bearing no responsibility for its accuracy or use.

The practice of using background checks to screen applicants has been on the rise in recent years despite research that tells us criminal backgrounds do not have any impact on worker productivity and are often used as a proxy for overt racial discrimination. [2] Because these data mining companies exist where there were none in the past, employers rely on these companies to screen applicants and provide employee background checks, despite their operating with negligible oversight and nominal regulation. Employers purchase data about their employees and potential employees’ credit history, immigration status, and criminal background. Emp loyers have come to rely on this data to make hiring decisions, yet they are under no obligation to disclose the contents of the reports or any means for the applicant to correct errors or provide context for the information. Not surprisingly, unregulated access to public information has a disproportionate and negative effect on Applicants of Color.

Operating with negligible oversight, data mining companies only build the barriers to economic opportunity for all workers, and People of Color in particular. They compound the problem by providing information that is outdated, expunged, and/or inaccurate. At least 40 states grant individuals the right to effectively erase criminal records by sealing or expunging some prior convictions. These companies’ “massive private electronic databases of criminal records, which are not always up to date, make some of those supposedly secret records widely available.” [7] Name-based searches in particular are often inaccurate. Intelius alone has collected over 20 billion records[8] that it stores and arranges for sale through name-based searches, providing disclaimers about the accuracy of the information to avoid scrutiny. While inaccurate data provided by companies LexisNexis or Intelius regularly cost people jobs, the onus of ensuring accurate information is not on the company providing it, nor the employer. The onus of providing accurate information falls to the applicant, who likely has no idea what data the corporation has collected or how to access or correct it.

Central to the problem is the relationship between employment disparities and the criminalization of People of Color. We must understand this industry in context. Mass incarceration all but ensures that running background checks on applicants will feed the racial jobs gap. Princeton sociologist Devah Pager’s 2003 study found that Black applicants with criminal records are “less than half as likely” to get a job than White applicants with records.

Moreover, Black applicants with no criminal record “fall behind” White applicants with felony records. Pager found that criminality was often assumed in Applicants of Color. She concluded

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that criminal background checks serve as a “negative credential” that legitimizes racial bias in the eyes of the employer and that “mere contact with the criminal justice system,” regardless of the outcome, severely limits employment. 4 Employers relying on these companies are on legally shaky ground. Roberto Concepción has found that “although employers have offered seemingly rational arguments for the use of criminal background checks, research has shown that... former criminal convictions are not a valid predictor of counterproductive work behavior.” 5 Combined with the solid evidence that People of Color are incarcerated at vastly disproportionate rates, these background checks have a racially disparate impact which violates Title VII of the Civil Rights Act of 1964. This position has been upheld most recently by the federal Equal Employment Opportunity Commission (EEOC) in their 2013 lawsuits targeting Family Dollar and BMW. While litigation is pending, the EEOC holds that “background checks themselves are not racist, they way they were applied — without individual consideration for each case — is.”6 Grassroots Organizers and Corporate Employers Can Find Common Ground Kissy Mason’s story didn’t end with the loss of her job. Mason joined TakeAction Minnesota’s campaign to persuade Target Corporation to change its employment practices. Mason, together with hundreds of TakeAction members including James Cannon, used a series of escalating tactics, from calls and emails to Target HR executives to organizing 200 community members to protest their corporate headquarters. TakeAction organized 150 people of color with criminal records to apply for work at Target at the height of the holiday shopping season; not a one was offered a job.

Because of growing public attention and threatened with legal action pending under EEOC guidelines, Target came to the table with Mason and the other leaders. At the same time, legislation to ban the criminal history box from private sector job applications was stalled in the Minnesota state legislature. After a conversation with TakeAction Minnesota, Target executives leaned on the Minnesota Chamber of Commerce to drop its opposition to the bill, paving the way for its passage with bipartisan support. Months later, in the predominantly African American north side of Minneapolis, Target announced it would ban the box on all its job applications nationwide, paving the way for more equitable access to its workforce of more than 350,000.

The campaign to reform Target’s hiring practices exposed its dependence on the data mining industry and opened up the opportunity to work in partnership to regulate the data mining industry. Justin Terrell, the architect of TakeAction Minnesota’s campaign points out, “Many employers are held hostage by data mining companies that provide a sub -par product. That’s bad for them and its bad for our communities.” Target, and companies like it, which rely upon a growing African American and Latino consumer base, have a real interest in being part of the solution that curbs the power of data harvesters.

Limit the Use of Public Information for Private Profit Regulation of data mining currently falls under the Fair Credit Reporting Act (FCRA) of 1970, enforced by the Federal Trade Commission. We have an opportunity to win policy changes that dramatically reduce racial employment disparities by regulating the for profit use of public information. Limiting the use of public information for private profit would significantly curb the potential for abuse and push employers toward obtaining a fuller picture of a potential employee

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before making a hiring decision.



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