North Carolina small business owners support criminal justice reforms to address persistent workforce challenges

Small Business Majority
Wednesday, February 1, 2023

Small businesses in North Carolina are still struggling to hire and retain a ready workforce, persistent challenges in the wake of the pandemic. A parallel problem for the labor market cannot be ignored: more than 70 million Americans have a criminal record, including more than 1.6 million North Carolinians, which reduces their opportunities to contribute to society, earn a living wage or start a new business. Even a minor criminal record can create a wall of lifelong barriers that prevent gainful employment. 

What’s more, criminal records also further widen the racial wealth gap: While only 13.6% of the population is Black, 28% of all arrests and 36% of all felony convictions are imposed on Black people. Yet employers who hire justice-impacted workers report that their quality of work and contributions are on par with or better than other employees, and turnover rates are notably lower. Small businesses employ nearly half (44.4%) of the private workforce in North Carolina, opening a powerful role for small employers to play in addressing the labor shortage and reducing the harms of mass incarceration. 

Small Business Majority’s new poll of North Carolina small business owners reveals strong support for criminal justice reforms at the state and federal level that would remove barriers to employment or entrepreneurship opportunities for formerly incarcerated individuals. 

Key findings

  • Small business owners agree that Clean Slate policies will help boost labor recruitment. A robust 83% of respondents agree that Clean Slate policies will open a pool of job applicants that deserve a second chance, which will benefit small businesses in their efforts to hire and recruit employees. Only 17% of respondents report that they are not open to hiring individuals with a criminal record, regardless of Clean Slate policies. Nearly 6 in 10 (58%) poll respondents are familiar with Clean Slate policies.
  • Small business owners agree that families, communities, and the economy are impacted by the criminal justice system. 
    • 83% of respondents agree that one way to expand the productivity and diversity of our nation’s workforce is by making it easier for employers to recruit from underused candidate pools.
    • 82% of respondents agree that removing barriers to employment for people with criminal records will save tax dollars by reducing recidivism and the need for long term government assistance.
    • 70% of respondents agree the U.S. criminal justice system disproportionately impacts people of color, leading to employment barriers and economic mobility. 
  • Small businesses support policies that remove barriers to obtaining professional and driver’s licenses. A vast majority (82%) support reforms that would allow people with old convictions fairer access to occupational licenses. Additionally, more than 8 in 10 (82%) respondents support ending debt-based driver license suspensions for unpaid fines and fees. 
  • North Carolina small business owners are planning to hire in the next six months. More than 8 in 10 small business owners (85%) are optimistic about their business prospects, and 72% of respondents say they are likely to hire in the next six months. Nearly 7 in 10 (69%) respondents say it’s hard to find quality candidates and 47% say that jobseekers are expecting higher wages. 
  • Small businesses are attracting workers by increasing pay and benefits. A majority (46%) of small business owners are increasing employee wages, while 34% are offering additional benefits. Small employers are also being more flexible in their hiring and recruitment practices, with the poll revealing that 39% of respondents are creating more part-time positions, and more than a quarter (29%) are hiring younger candidates and from within their local community (26%). 
  • North Carolina small business owners are supportive of state and federal policies that improve hiring chances for justice-impacted individuals. Small business owners are supportive of several federal and state criminal justice reform policies:
    • A robust 78% support state legislation that would allow individuals to petition federal courts to seal or expunge certain records. 
    • More than half (57%) of business owners support federal legislation that would prohibit private-sector employers from asking jobseekers about their criminal background.