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Washington, D.C.— Today, the House Small Business Committee, led by Chairwoman Nydia M. Velázquez (D-NY), convened a panel of formerly incarcerated individuals and a representative from a key Small Business Administration (SBA) resource partner for a hearing examining how entrepreneurship can be utilized to provide a second chance for those that have been released from prison.  

“Returning citizens face steep challenges when faced with the often daunting task of re-integrating into society,” said Chairwoman Velázquez. “Many struggle to find stable and affordable housing. And put simply, many employers don’t want to hire them because of the stigma associated with serving time in prison. In the end, this serves no one. In fact, it leads to dim employment prospects, reduced earnings potential—and yes, it increases the rate of recidivism.”

In 2018, more than 37,000 incarcerated individuals were released from federal prison and returned to communities across the country. Studies show that once they came home, they faced a lack of opportunity and a high potential for recidivism. Upon attempting to reenter the workforce, returning citizens are faced with employers that are wary of hiring former prisoners due to the stigma attached to the formerly incarcerated or legal restrictions for specific industries. Studies have shown that an estimated 60 percent of the formerly incarcerated remain unemployed a year after release. A 2016 report from the United States Sentencing Commission found that approximately 77 percent of state and 46 percent of federal offenders were rearrested within five years.

As Congress looks to reform the criminal justice system, entrepreneurship has emerged as a tool to help returning citizens rejoin and contribute to society. Increasing entrepreneurship opportunities for the formerly incarcerated can help returning citizens to build wealth, increase economic mobility, and immerse themselves in the communities they operate in. Any entrepreneurial development initiative for returning citizens is likely to involve the SBA, due to the agency’s existing training infrastructure. The SBA could play a significant role in any entrepreneurial development initiative for returning citizens due to its existing training infrastructure. The SBA offers training to help entrepreneurs start and grow businesses through affiliated resources partners and programs like Women’s Business Centers, Small Business Development Centers, and SCORE.

The hearing gave formerly incarcerated entrepreneurs the chance to testify on their experience returning from prison and ways that entrepreneurship can empower returning citizens.

“For many formerly incarcerated people locked out of the job market upon their return to their community, the best road to gainful employment is entrepreneurship, and particularly small business ownership,” said Shon Hopwood, Associate Professor of Law at Georgetown University Law Center. “Starting a small business doesn’t require an employer to give them an opportunity; there is no felony box to check on an employment application for those starting a small business. And many people coming out of prison have the internal drive and hustle necessary to start and sustain a small business.”

“I returned from prison over 30 years ago,” said Gary Wozniak, Founder and CEO of RecoveryPark in Detroit, Michigan. “Despite owning seven businesses, launching an eighth, sitting on five non-profit boards and mentoring hundreds of returning citizens and people in recovery, I still cannot obtain a job mopping floors in a nursing home because of 3 occupational licensing laws and regulations. Proprietorship was, and still is, my only avenue for success.”

The panel also featured a representative from one of the SBA’s primary resource partners who testified on the importance of equipping returning citizens with the tools to successfully reenter society.

“Entrepreneurship has the power to equip those returning from incarceration with tools to overcome barriers to employment which they often face upon their release,” said Corinne Hodges, CEO of the Association of Women’s Business Centers. “Recidivism rates in America remain alarmingly high, yet entrepreneurship can be a pathway to success and an antidote to recidivism for the formerly incarcerated.”

“Increasing entrepreneurship opportunities is a crucial step to ensuring that returning citizens aren’t locked out of the economy and society after they have paid their debt to society,” said Chairwoman Velázquez. “I look forward to working to advance legislation that will provide the incarcerated and formerly incarcerated with the entrepreneurship training services needed to launch and grow a small business.”

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