U.S. sues employers using criminal background checks in discriminatory manner

On June 11, 2013, the U.S. Equal Employment Opportunity Commission sued BMW and Dollar General for firing a disproportionate number of minority employees for having criminal records, the Washington Post reports. A front page story on June 12, by Ylan Q. Mui, the Post's labor reporter, reports on the broader problem of criminal convictions driving unemployment.

In the EEOC case versus BMW, a woman who had worked for BMW for 14 years was fired because a recent background check found a misdemeanor conviction more than 20 years old that was punished by a $137 fine! In the Dollar General case, a job offer was rescinded to a black woman after a criminal background check, even though the record was found to be inaccurate! A second allegation in the Dollar General case involved a drug conviction of a black woman that was six-years old.

The Post probed the implications of these convictions more deeply, however.

The Post said a 2012 survey by the Society for Human Resource Management (SHRM) that of those companies that conduct background checks, one quarter said nonviolent misdemeanors, such as drug convictions could influence their hiring decisions. However the slide actually said that a nonviolent misdemeanor would be "very influential" in the decision to not extend a job offer.

According to a PowerPoint presentation of a SHRM 2010 survey of the same type, slide 5, says that 73 percent of companies surveyed find a nonviolent misdemeanor conviction would be "very or somewhat influential" in not making a job offer!    


Criminal convictions are a mighty contribution to the crisis of unemployment and the consequent lack of demand in the U.S. domestic economy.

On Friday, June 14, the Task Force on Over-Criminalization in the U.S. House of Representatives is going to begin to examine the issue.

Factory taken over by Mexican cartel, investors charge

According to the Courthouse News Service, an investment group has charged in a fraud complaint filed in U.S. District Court for the Central District of California on May 10 that a furniture plant in Reynosa, Mexico that they bought from Thermo Fisher Scientific was controlled by the Gulf Cartel and that Thermo Fisher concealed that fact from them.
The plaintiffs are OpenGate Capital Group (which claims to do "cross border acquisitions" on its home page) and three Delaware businesses with RoundRock in their name. The plaintiffs allege that Thermo Fisher was desperate to unload the plant.

The complaint alleges that the Gulf Cartel stored a truck trailer of unknown cargo on the property and fled to the property as a refuge during gun battles.

True or not, the claim is sadly believable.

Economy just above a stall, says EPI

The Economic Policy Institute reports that the U.S. economy is growing "just above stall speed."

This accentuates the cost to the economy of millions of Americans in prison and with criminal convictions who can't get jobs and can't help grow the economy. We have the world's highest rate of imprisonment. We sentence at least a million persons a year to a drug conviction of some kind, and they bleed out of the workforce. They are forced out of schools.  This has been a cumulative problem for a decade.

Conservative commentator Brandon Brice notes the economic cost of the war on drugs

Conservative commentator Brandon Brice, writing in the Common Sense Conservative community pages of The Washington Times, notes the economic cost of the war on drugs:

The Bureau of Labor Statistics recently stated that the nation’s unemployment fluctuated between 7.8 and 7.9 percent in the last quarter, but rather than releasing resources and liberating the economy, Washington fights a war at home against Americans, leaving a swath of devastation through an already fragile economy. The question for most Americans becomes, where are our priorities? The million black men in prison don’t count as unemployed. Is the drug war a clever way of keeping black unemployment down?

It does not make sense to think the drug policy is being carried forward to enable the government to publish more favorable unemployment numbers. (The political benefit of reducing black unemployment numbers doesn't seem to be worth the dollar cost in local, state and corrections expenditures that politicians have to account for.) After all, the millions with drug convictions who are not in prison may still be trying to find work, and when they can't, they are counted among the unemployed. Prisoners serving sentences for drug offenses (or incarcerated for having violated probation or parole by relapsing and using drugs), number about 400- to 500,000 on any given day. They don't contribute that much to the unemployment rate. 

But the underlying point is critical: people with drug convictions are unable to fully participate in the economy of the nation. If you have a pension fund, a 401(k), a mutual fund, or any other kind of investment, the investment is worth less than it could be because of our drug policy's effect on automobile sales, housing sales, retail sales, and reduction of property values in "drug-infested" neighborhoods.

Ending drug prohibition is a wonderful issue in a political sense -- it is neither conservative nor liberal nor libertarian -- it is common sense.

Crime scholar writes drug trafficking is a business and violence is a strategy, in Washington Post

"Because trafficking is a business and fighting is a business strategy, drug cartels chose to fight whenever war brings more benefits than costs," writes Viridiana Rios in a Washington Post op-ed, Sunday, April 14, 2013. "Traffickers pick their wars. Battling is a strategic choice for cartels -- and they frequently choose peace." But right now "war pays in Mexico." The strategy is take out the illegal profits, she argues. Can one be devised short of legalization?

The U.S. and Mexico "may have been fighting the wrong war because we do not know who the enemy is," she writes. Target not the organizations but the violence. "A war against drug organizations is an endless war." Right now, fighting in Mexico "makes business sense." In Mexico, "only 6 percent of all homicides produce a trial and judgment."Our effort "must be a war to make sure those who kill face consequences."

She concludes, "A war against impunity can be won. A war against drugs cannot."

Celebrated finance professor and financial writer a co-organizer of #endthewarondrugs

Dr. Boyce Watkins, Professor of Finance at Syracuse University, was a primary organizer of a letter sent to President Obama using the address #endthewarondrugs.

Dr. Watkins is the author of Black American Money (2010), and Financial Lovemaking 101: Merging Assets With Your Partner in Ways That Feel Good (2007).

USATODAY tells the new marijuana business story

USATODAY (April 8, 2013) tells the story of young investors from Silicon Valley and elsewhere looking into the potential profits from legal marijuana. Essentially retells the FORTUNE story blogged about earlier.

Marijuana businesses highlighted on cover of FORTUNE

The cover story of FORTUNE (April 8, 2013) is "Marijuana, Inc., Meet the Entrepreneurs and Investors Firing Up a New Industry" by Roger Parloff (pp.66-73), posted on-line as "Yes we cannabis." (The full story is only available to subscribers.)

Marijuana prohibition is a house of cards and the first two cards just got pulled out [legalization votes in Colorado and Washington in November 2012]. When the public, investors, politicians, and business community saw that, the entire conversation changed,

said Troy Dayton, CEO of ArcView Angel Network, which is the focus of the article. Dayton's partner is Steve DeAngelo, the proprietor of the highly regarded medical marijuana dispensary, Harborside Health Center in Oakland, CA. Dayton and DeAngelo's network brings together investors and entrepreneurs looking for funding at quarterly meetings that might be considered a cannabis business version of the ABC-TV reality program, "Shark Tank."

Dayton adds,

Business is the most powerful platform for political change that's ever existed. When there is money for government, money for investors, money for entrepreneurs, and benefits to communities, that's a powerful incentive for change.

Participants include investment firm MC Advisors, created by John Sperling, the founder of the for-profit University of Phoenix, who has been a major financial backer of marijuana law reform initiatives. A firm invested in by MC Advisors is a medical cannabis consulting firm, 4Front Advisors, run by Kris Krane, who participates in the Network.

CNNMoney.com has a short video of one of the profiled businesses, "Uptoke," a portable vaporizer.

Economists worried that people are dropping out of the work force -- Can't understand why!!

At the top of page A3 in the Sunday Washington Post (prime journalistic real estate), the report, "Vanishing workforce weighs on growth: Trend puts nation's economy at risk, experts say" gets half the story.

"Millions of Americans have gone missing from the workforce. Every month that those would be worker are gone raises the odds that they might never come back, dimming the prospects for future economic growth."

"...some aspects of the vanishing trend remain a mystery. Economists are struggling to explain why a large number of prime-aged African American men aren't working...declining participation to be 'disproportionately concentrated among the less educated and younger groups within the male and female populations..."

Black males are consistently arrested, punished and imprisoned for drug offenses at rates that range from three times to eleven times the white rates.

There are more than 1.5 million drug arrests each year.

Public says marijuana enforcement not worth the cost -- Latest Pew Poll

The Pew Research Center for the People and the Press has released the result of a poll it has conducted finding that a majority of the public supports the legalization of marijuana.

52 percent of the public supports legalizing marijuana, 45 percent oppose.
An important finding is that a majority agrees that government enforcement of marijuana laws are not worth the cost!

“Crucifying” the “Other”

On April 1^st, Business Council Director Eric E. Sterling was published in the Huffington Post. Sterling draws parallels between the attitudes of policymakers that targeted the societal outcasts of a generation ago (e.g. gays and lesbians) and contemporary targets – marijuana users. Thirty years ago gays and lesbians were consigned to punishment, disease and exclusion.

In testimony before the Maryland House of Delegates last week, Sterling was debating Delegates who opposed reducing criminal penalties for possession of small amounts of marijuana to a civil offense. One delegate wanted to punish marijuana users with loss of jobs and college eligibility because he had concluded marijuana users no longer feared being jailed. These criminal convictions have no positive effect on reducing the rate of drug use, but they devastate the lives of millions of Americans who can’t get good paying jobs, becoming a drag on the entire economy.

The economic consequences of copious criminal convictions for drug offenses include decimating family earnings, obstructing economic mobility, and reducing corporate profits and expansion. With one conviction, one marijuana user is hurt with a lifetime of economic challenge. With almost a million marijuana convictions every year, our entire economy faces depressed earnings, lost consumption and lost profits in the hundreds of billions, and almost every investor and retiree suffers.

Read the entire article here.

Welcome to Profits Unchained!

Welcome to Profits Unchained!

In 1971, President Richard M. Nixon, on behalf of all of America, declared war on “drugs.” Like most declarations of war, the war on drugs was a response to an immediate threat. There was the perception that the health and moral character of our citizenry were under assault. Large numbers of soldiers in Vietnam were becoming addicted to heroin. Young people had been smoking marijuana at Woodstock, and now they were getting stoned in their backyards and on college quads.  However, as the war continues into its 42^nd year, there has been expensive collateral damage (unemployment, disease, stigmatization, etc.) from the policies. This is in addition to the enormous direct cost to the American taxpayer of paying for police, prosecutors, prisons, the interdiction efforts along the borders and coasts, and the international efforts, such as a war in Panama to take out its drug dealing dictator Manuel Noriega.

Real wars – winnable wars – come to an end. After World War II, Nazi Germany and the Empire of Japan lay in ruin, lacking the will and capacity to further harm the global community. Domestically, the United States economy flourished as consumer demand skyrocketed and government investments improved productivity and economic vitality. This was a time of growth and entrepreneurship.

The war on drugs has not ended. There is no enemy in ruin. Drugs are more potent and new drugs proliferate through our communities at increasing rates (Ecstasy, GHB, Oxycontin, “Spice,” Salvia, “bath salts,” etc.). Hundreds of billions of tax dollars have been spent incarcerating members of our American workforce and eliminating business receipts. During the 1970’s, the United States housed 250,000 persons in jail or prison. Today, America incarcerates 2.2 million – roughly nine times the number of forty years past.

The failed policy of mass incarceration and mass criminal conviction has had a crippling effect on many levels of our economy. Increasing federal, state and local criminal justice expenditures have diverted funds away from investments that maintain a productive workforce and incentivize commercial risk and free enterprise. American businesses suffer unrealized profits and increased operating costs as consumer demand is stunted and insurance costs rise from drug crime.

Profits Unchained will tell the story of the economic price paid by ordinary citizens, retirees, investors, workers and business owners as a result of our poorly conceived war on drugs.

Please share our posts with your friends and colleagues, tweet them to your followers, post them on Facebook, and help us shine a light on a self-inflicted wound that needs to be understood so that it can be healed.