Employment, Wages and Public Safety
October 1, 2007
The Justice Policy Institute
is a Washington, D.C.based think tank dedicated
to ending society’s
reliance on incarceration
and promoting effective
and just solutions to social
problems.
Board of Directors
Tara Andrews
At-Large

Introduction
The United States currently leads the world in the number of people
incarcerated in federal and state correctional facilities. There are currently more
than 2 million people in American prisons or jails.1 Overall, individuals
incarcerated in U.S. prisons and jails are more likely to report extended periods
of unemployment and earning lower wages than people in the general
population.

David C. Fathi
Board Chair

•

Katharine Huffman
At-Large
Peter Leone, Ph.D.
Board Treasurer

•

Mark I. Soler
Board Secretary
Research Staff
Amanda Petteruti
Research & Publications
Associate
Nastassia Walsh
Research Assistant
Jason Ziedenberg
Executive Director
Communications Staff
Laura Jones
Communications Director
LaWanda Johnson
Deputy Communications
Director
1003 K Street, NW
Suite 500
Washington, DC 20001
Phone: 202-558-7974
Fax: 202-558-7978
www.justicepolicy.org

In the most recent statistics provided by the U.S. Department of Justice
(DOJ), one-third of people in jail reported they were unemployed prior to
arrest in 2002.2 In comparison, 4.6 percent of the general population
reported unemployment in July 2007.3
Eighty-three percent of people in jail reported income in the month prior
to arrest of less than $2,000 in 2002, 4 one-third lower than the average
monthly wage of the general public. In 2003, the average monthly wage
of the general U.S. population was slightly more than $3,000 per month.5

Research has shown a relationship between employment, wages and crime
rates and a relationship between the economic health of a community and
incarceration rates. The impact of policies related to employment and wages is
concentrated among people of color, who are more likely to experience
unemployment, hold lower-paying jobs and be incarcerated.
The importance of this issue is apparent as the stability of the U.S. economy has
recently come into question. Between July and August 2007 the country lost
4,000 jobs, ending a four-year growth. Despite a steady unemployment rate,
empirical research has identified a net decrease in the percentage of employed
adults, which suggests that the number of people who are neither working nor
looking for work—considered neither employed nor unemployed by the

1

Sabol, William J., Todd D. Minton and Paige M. Harrison. 2007. Prison and jail inmates at
midyear 2006. Washington, D.C.: Bureau of Justice Statistics.
2
James, Doris J. 2004. Profile of jail inmates, 2002. Washington, D.C.: Bureau of Justice
Statistics.
3
Bureau of Labor Statistics. 2007. Employment situation summary: July 2007.
www.bls.gov/news.release/empsit.nr0.htm, accessed August 27, 2007.
4
James, Doris J. 2004.
5
Calculated using the mean annual wage of $36,210. Obtained at: Bureau of Labor Statistics.
September 18, 2007. Online at http://www.bls.gov/oes/2003/may/oes_00Al.htm.

1

Employment, Wages and Public Safety

government—in August 2007.6 This job loss comes at a time when national statistics show a
small uptick in the number of violent crimes.7
This research brief will summarize recent findings on what is known about unemployment and
wages as both relate to crime trends and public safety. The Justice Policy Institute (JPI)
compared state-level employment rates with crime rates and found that, on average, those states
with the highest levels of unemployment8 had higher violent crime rates than states with lower
unemployment levels. While there is no single solution that will guarantee that a person will not
be involved in criminal activity, and the literature is not conclusive on what single factor will
solve every community’s various challenges, the research suggests that increased investments in
employment opportunities can have a positive public safety benefit. Significant findings from
this brief include:
•

Increased employment is associated with positive public safety outcomes.
Researchers have found that from 1992 to 1997, a time when the unemployment rate
dropped 33 percent, “slightly more than 40 percent of the decline [in overall property
crime rate] can be attributed to the decline in unemployment.”

•

Increased wages are also associated with public safety benefits. Researchers have
found that a 10 percent increase in wages would reduce the amount of hours young men
spent participating in criminal activity by 1.4 percent.

•

States that had higher levels of employment also had crime rates lower than the
national average. Eight of the 10 states that had the lowest unemployment rates in the
United States also had violent crime rates that were lower than the national average. In
comparison, half of the 10 states with the highest unemployment rates had higher violent
crime rates than the national average in 2005.

•

The risks of incarceration, higher violent crime rates, high unemployment rates and
low wages are concentrated among communities of color. Communities of color and
African Americans, specifically, experience more unemployment and lower average
wages than their white counterparts. At the same time, communities of color are more
likely to experience higher rates of violence than are white communities, and African
Americans are more likely to be incarcerated than are whites.

6

Leonhardt, David and Jeremy W. Peters. 2007. Recession fear heightened as 4-year growth in jobs ends. The New
York Times, September 7. Online at www.nytimes.com/2007/09/07/business/07cnd-econ.html?_r=1&oref=slogin.
7
FBI Uniform Crime Report, 2007. Crime in the United States. Online at www.fbi.gov/ucr/ucr.htm.
8
The unemployment rate includes those people who are collecting unemployment insurance per 100,000 in the
population. To collect unemployment insurance, a person must meet three criteria: the person must be able and
available to work, must not have worked in previous week and must have made an effort to find work. Wages are
hourly earnings compiled by the Bureau of Labor Statistics.
2

Employment, Wages and Public Safety

1) Increases in employment and increases in wages are associated with lower crime
rates.
.

Researchers have conducted a variety of studies examining the relationship of unemployment
and wages to crime. Some of the findings indicate that increased employment and wages can
contribute to lower crime rates. Nationally, unemployment rates have shown a positive
relationship with crime rates. Particularly since 1989, violent crime rates followed a similar
pattern to unemployment rates.

700

10

600
8

500

6

400
300

4

200

Unemployment Rate

12

800

2

100
0

0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005

Violent Crime Rate (per 100,000)

Violent crime rates and unemployment rates.

Violent Crime Rate Per 100,000 Population

National Unemployment Rate

Sources: FBI Uniform Crime Report, Crime in the United States, 1980-2005;
Bureau of Labor Statistics, 1980-2005

Although other factors may be acting to decrease crime rates, several researchers have found that
increases in employment and wages contribute to specific decreases in certain types of crime,
with property crimes and burglary decreasing the most.
A one percent decrease in the unemployment rate
relates to the following decreases in crime rate.
Type of Crime
Percentage Decrease in Crime Rate
Property Crime
-1.6-2.4%
Violent Crime
-0.5%
Burglary
-2%
Larceny
-1.5%
Auto Theft
-1%
Source: Raphael, Steven and Rudolph Winter-Ebmer. 2001. Identifying the effects
of unemployment and crime. Journal of Law and Economics Vol. XLIV.

3

Employment, Wages and Public Safety

•

The Heritage Foundation found additional public safety benefits in increasing the civilian
labor force. According to the report, a one percent increase in civilian labor force
participation could be expected to decrease violent crime by 8.8 incidents per 100,000
people.9

•

A study published in the Journal of Law and Economics found that, the crime drop of the
1990s was associated with falling unemployment rates.10 From 1992 to 1997, during a
time when the unemployment rate dropped 33 percent, the country also witnessed a 30
percent drop in the robbery rate, a 15 percent drop in auto theft and burglary rates and a 4
percent drop in larceny rates. The researchers found that “slightly more than 40 percent of
the decline [in overall property crime rate] can be attributed to the decline in
unemployment.” The authors found the impact on violent crime was weaker, but that it
varied for different crimes (such as homicide, and robberies).

•

A study published in the Journal of Labor Economics indicates that for young men, a 10
percent increase in wages would reduce the amount of hours spent participating in
criminal activity by 1.4 percent.11 Furthermore, this same study directly links the decline
of property crime rates in the 1990s with the decline in the unemployment rate.

•

A study published in the Journal of Quantitative Criminology found that youth
involvement in crime seems to be especially affected by employment. This study has
indicated that employed youth are less likely to be engaged in property crimes.12

•

A second study published in the Journal of Quantitative Criminology using Bureau of
Labor Statistics data indicated that an increase in the number of people unemployed for
15 weeks or more, which is considered long-term unemployment, correlates with
increased property crime.13

•

One 2002 study published in The Review of Economics and Statistics found that wage
trends account for more than 50 percent of the change in both property and violent crime
indices over the time period examined in the study.14

9

Muhlhausen, David B. May 2001. Do Community Oriented Policing Services grants affect violent crime rates?
Washington, DC: The Heritage Foundation. Online at www.heritage.org.
10
Raphael, Steven and Rudolph Winter-Ebmer. 2001. Identifying the effects of unemployment and crime. Journal
of Law and Economics Vol. XLIV.
11
Grogger, Jeff. 1998. Market wages and youth crime. Journal of Labor and Economics 16(4): 756-791.
12
Britt, Chester L. 1997. Reconsidering the unemployment and crime relationship: Variation by age group and
historical period. Journal of Quantitative Criminology 13(4): 405-428.
13
Chamlin, Mitchell B. and John K. Cochran. 2000. Unemployment, economic theory, and property crime: A note
on measurement. Journal of Quantitative Criminology 16(4): 443-455.
14
Gould, Eric D., Bruce A. Weinberg and David B. Mustard. 2002. Crime rates and local labor market opportunities
in the United States: 1979-1997. The Review of Economics and Statistics 84(1):45-61.
4

Employment, Wages and Public Safety

2) States that had higher levels of employment also had crime rates lower than the
national average.
JPI examined the 10 states with the highest and lowest unemployment rates alongside the
corresponding violent crime rates of those 10 states. Overall, states with unemployment rates that
are higher than the national average also have higher violent crime rates than states with lower
unemployment rates.
Of the 10 states with the lowest unemployment rates, eight had violent crime rates below the
national average in 2005. Of the 10 states with the highest unemployment rates, half had violent
crime rates above the national average.
On average, the states with the highest levels of unemployment also had the highest levels
of violent crime.
Ten states with the lowest unemployment rates and the
corresponding violent crime rates.
State

Unemployment
Rate

Ten states with the highest unemployment rates and the
corresponding violent crime rates.

Violent Crime
Rate
(per 100,000)

United States
Montana

5.1

469

3.9

Nebraska

State

Unemployment
Rate

Violent Crime
Rate
(per 100,000)

287

United States
Mississippi

5.1
7.8

469
525

3.9

607

Alaska

6.9

632

Florida

3.8

449

Michigan

6.8

297

South Dakota

3.7

753

Louisiana

6.7

112

Wyoming

3.7

230

South Carolina

6.7

176

6.2

425

6

594
509

New Hampshire

3.6

355

Oregon

Virginia

3.5

346

Kentucky

North Dakota

3.4

351

Ohio

5.9

Vermont

3.4

283

Illinois

5.7

324

5.6

530

Hawaii

2.7
257
Tennessee
3.56
391
6.43
412
Average
Average
Sources: Bureau of Labor Statistics 2005; FBI Uniform Crime Report, Crime in the United States, 2005

5

Employment, Wages and Public Safety

3) Why might investments in employment opportunities have a public safety benefit?
According to the available research and the analyses in this brief, jurisdictions with increased
employment had positive public safety outcomes when compared with jurisdictions with more
unemployment. Why may employment opportunities have a relationship with public safety?
Transforming communities
Researchers have found a relationship between unemployment, crime and incarceration.
Improving employment opportunities encourage reinvestments in oneself, as well as in the
community, ostensibly creating an environment for improved public safety. A study by the
National Bureau of Economic Research found that places that rely most heavily on incarceration
reduce the employment opportunities in their communities compared with places that rely on
alternatives to incarceration.15 Areas with the most rapidly rising rates of incarceration were the
areas in which youth, particularly African American youth, have had the worst earnings and
employment experience. Other research indicates that neighborhoods with the highest levels of
incarceration in one year had higher-than-expected crime rates the following year (compared
with other neighborhoods, and controlling factors such as poverty, racial composition, and
voluntary mobility).16
Creating positive life outcomes for individuals and communities
Unemployment, low wages, and incarceration have a cumulative effect that creates a cycle that
prevents communities and individuals from improving their life outcomes and acquiring social
capital. Individuals may have difficulty procuring work after incarceration, something that
contributes to growing unemployment rates, thus increasing the unemployment rate in a
community, which may further increase the crime rate and the incarceration rate.
•

Incarceration impedes job growth, further precluding employment, and continues the
cycle. Researchers at Princeton University have found that a formerly incarcerated youth
experienced three weeks less work in a year (five weeks less for a formerly incarcerated
African American youth) than a youth who had no history of incarceration.17

•

Many people who have been incarcerated face specific obstacles when attempting to find
a job, regardless of job type. One researcher found that jail time reduced the probability
of employment by between 15 and 30 percentage points.18 The impact of incarceration on

15

Freeman, Richard B. and Joel Rogers. 1999. What workers want. Cornell University Press.
Clear, Todd R. 2007. Imprisoning communities: How mass incarceration makes disadvantaged neighborhoods
worse. New York: Oxford University Press.
17
Western, Bruce and Katherine Beckett. 1999. How unregulated is the U.S. labor market?: The penal system as a
labor market institution. The American Journal of Sociology 104: 1030-1060.
18
Freeman, Richard B. 1991. Employment and earnings of disadvantaged young men in a labor shortage economy.
In The urban underclass, ed. Christopher Jencks and Paul E. Peterson. Washington, DC: Brookings Institution
Press.
16

6

Employment, Wages and Public Safety

employment was greater than for conviction or probation alone, which reduced
employment probabilities by six to 10 percentage points.
•

A 1996 study found that 65 percent of all employers in five major U.S. cities would not
knowingly hire a person with a criminal record, regardless of the offense.19

•

Youth, in particular, may miss out on opportunities to learn important social and human
skills that are necessary for the legal job market, thus making finding and keeping a job
more difficult.20

•

Even if serving time in prison does not necessarily hinder employment prospects, it will
diminish an individual’s earnings.21

•

The negative impacts of incarceration appear to be greater for older individuals, including
those with white-collar occupations. In a review of existing literature, researchers have
found that even if employment prospects are not harmed by incarceration, a person with a
history of incarceration could expect a 10 to 30 percent earnings penalty.22

19

Holzer, Harry J. 1996. What employers want: Job prospects for less-educated workers. New York: Russell Sage
Foundation.
20
Bushway, Shawn D. 1998. The impact of an arrest on the job stability of young white American men. Journal of
Research in Crime and Delinquency 35:4:454-479.
21
Western, Bruce, Jeffrey R. Kling and David F. Weiman. 2001. The labor market consequences of incarceration.
Crime and Delinquency 47:410-427.
22
Western, Bruce, Jeffrey R. Kling, and David F. Weiman. 2001.
7

Employment, Wages and Public Safety

4) The risks of incarceration, higher violent crime rates, high unemployment rates
and low wages are concentrated among communities of color.
Since the 1990s, employment rates have generally improved in the United States; however,
people involved in the criminal justice system are far more likely to report unemployment than
someone in the general public. Though 71 percent of people in jail in 2002 were employed in the
month prior to arrest, more than one-quarter of the people held in jails were not employed.23 An
additional quarter of those held in jail were employed part-time or occasionally. People
unemployed or under-employed make up a significant portion of the jailed population. In
comparison, the percentage of the U.S. population experiencing unemployment in 2005 was
approximately 5 percent.24

80%

In 2002, almost one third of all jail inmates were
unemployed at their time of arrest.
71.0%

70%

57.4%

60%
50%
40%

29.0%

30%

18.4%

20%

10.9%

10%
0%
Employed

Employed
Full Time

Employed
Part Time

Employed Not Employed
Occasional

Source: James, Doris J. 2004. Profile of jail inmates, 2002. Washington, D.C:
Bureau of Justice Statistics.

Over the past 30 years, employment rates, wages and income have increased for people of color,
particularly African Americans.25 However, people of color are far more likely to experience
unemployment than their white counterparts. At the same time, people of color are overrepresented in U.S. prisons. Though unemployment is not a definite predictor of criminality or
incarceration, research has shown that communities that experience more unemployment also
experience higher crime rates and, as a result, are likely to also experience higher incarceration
rates.

23

James, Doris J. 2004.
Bureau of Labor Statistics. 2007. Employment situation summary: July 2007.
www.bls.gov/news.release/empsit.nr0.htm, accessed August 27, 2007.
25
Joint Center for Political and Economic Studies Data Bank, August 27, 2007.
www.jointcenter.org/DB/detail/employmt.htm
24

8

Employment, Wages and Public Safety

In 2005, the unemployment rate of African
Americans was more than twice that of whites.
12.0
10.4 %
Unemployment Rate

10.0
8.0
5.7%

6.0
4.3 %
4.0
2.0
White

African American

Hispanic/Latino

Incarceration Rate (per 100,000)

Source: Bureau of Labor Statistics, 2005.

In 2005, African Americans were incarcerated more
than five times as often as whites.
2,500

2,290

2,000
1,500
1,000

742

738
412

500
All Races

White

African American Hispanic/Latino

Source: Harrison, Paige M. and Allen J. Beck. 2006. Prison and jail inmates at midyear,
2005. Washington, DC: Bureau of Justice Statistics.

People of color are also more likely to be paid less than their white counterparts. Though earning
less money is not necessarily an indicator of criminal activity or incarceration, communities with
lower wages are more likely to experience higher crime rates. Similarly, research has shown that
wage inequalities do have a relationship with crime, particularly violent crime.26

26

Fowles, Richard and Mary Merva. 1996. Wage inequality and criminal activity: An extreme bounds analysis for
the United States, 1975-1990. Criminology 34(2): 163-182
9

Average Weekly Wage ($)

Employment, Wages
ges and Public Safety

$800

In 2005, whites made more money than African Americans
and Latinos.
$651

$672

$600

$520

$471

African American

Hispanic/Latino

$400
$200
$0
All Race

White

Source: Bureau of Labor Statistics, 2005
.

10

Employment, Wages and Public Safety

Recommendations
Investments in employment opportunities can provide important public safety benefits to
communities. From 1997 to 2004, Washington, D.C. experienced evidence of the importance of
employment opportunities for youth. As the unemployment rate for D.C. youth increased, the
referral rate of youth to juvenile court also increased. Rather than focus on corrections, law
enforcement and the judiciary when allocating funding, jurisdictions could turn their attention to
employment resources, employability training and the availability of well-paying jobs.

40

12,000
10,000

35
30

8,000

25

6,000

20
15

4,000

10

Juvenile Referral Rate
(Per 100,000 Youth)

Youth Unemployment Rate (%)

45

In Washington, D.C. the youth unemployment rate is
correlated with the juvenile court referral rate for
violent and property offenses.

2,000

5
0

0
1997

1998

1999

2000

2001

Unemployment Rate (Age 16-19)

2002

2003

2004

Referral Rate (Age 13+)

Sources: Superior Court of the District of Columbia: Family Court. Annual Report to
Congress, Family Court, 2005. www.dccourts.gov; Bureau of Labor Statistics, March 28,
2006. Table: Employment status of the civilian noninstitutional population in states by sex,
race, Hispanic or Latino ethnicity, martial status, and detailed age. www.bls.gov/lau/

Compared with people who face barriers to employment, people with enhanced employment
opportunities and earning potential would be better able to make other investments in their
communities, their families and themselves, including health care, housing, education and other
factors that would further benefit public safety.

11

Employment, Wages and Public Safety

Research limitations
Comparing unemployment and its relationship to crime presents some particular challenges.
Because unemployment rates only capture those people collecting unemployment insurance from
the government, many unemployed people may not be counted. Unemployment rates are also
affected by the seasons.
Although investments in employment, education and other social factors have been shown to
promote public safety and healthy communities, there is no single solution that will reduce the
chance that a person will be involved in criminal activity. The research is not conclusive on what
one factor will solve every community’s public safety challenges, as different communities have
differing needs and what works for one may not work for another. All of these social factors
should be considered in the context of individual communities in order to establish policies that
effectively ensure public safety.

Acknowledgements
This policy brief was researched and authored by Aliya Maseelall, Amanda Petteruti, Nastassia
Walsh, and Jason Ziedenberg. JPI staff includes Debra Glapion, LaWanda Johnson and Laura
Jones. This report would not have been possible without generous support from the Open Society
Institute-New York, the Public Welfare Foundation and individual donors to JPI.

12