WASHINGTON – U.S. Senator Ben Cardin (D-Md.), Chair of the Senate Committee on Small Business and Entrepreneurship, yesterday reintroduced the Necessary Entrepreneurship Workshops via the SBA to Transform and Assist Re-entry Training Act (NEW START) Act — legislation to create a reentry program within the U.S. Small Business Administration (SBA) to award grants for business counseling and entrepreneurial development training to justice impacted individuals. Entrepreneurship has become a necessity for returning citizens, as more often than not, these individuals face labor discrimination in traditional employment opportunities.
Chair Cardin continues to fight for a fair and equitable reentry system that helps break the cycle of recidivism. In 2018, he cosponsored the bipartisan FIRST STEP Act, which reduced sentences for certain low-level, nonviolent offenders and leverages evidence-based programs to help returning citizens rejoin their communities. Last Congress, Chair Cardin led a hearing in the Small Business Committee to explore how the SBA can improve access to entrepreneurial resources for justice impacted individuals.
“Entrepreneurship can be a critical lifeline for justice impacted individuals, and it can provide inherent benefits for their families and their communities. These entrepreneurs are less likely to recidivate and more likely to employ other justice impacted individuals, creating a positive multiplier effect,” said Chair Cardin. “The NEW START Act will help organizations that are on the ground administering entrepreneurial development programs and training to this community. The time has come to identify additional areas where we can come to a bipartisan consensus on how to produce meaningful change for the more than 70 million Americans with a criminal history.”
“Second chances are part of the American dream. Providing returning citizens the tools to turn their lives around through entrepreneurship is both a win for our national economy and our local economies. As the Progressive Policy Institute’s Metro Federalism Caucus report outlines, entrepreneurship is key in breaking the cycle of recidivism for returning citizens, and — with supports from federal and local policymakers — can be a method in overcoming major barriers to economic security. PPI applauds Chairman Cardin for leading this important legislation and thanks the Senator for his tireless work in supporting small business owners in Maryland and across the country,” said Will Marshall, President of the Progressive Policy Institute.
“We’re pleased Senator Cardin has reintroduced the New Start Act to make it easier for justice-impacted people to launch their own businesses and pursue the American dream,” said Small Business Majority Founder & CEO John Arensmeyer. “Supporting entrepreneurial development programs for formerly incarcerated individuals will help more people, especially those who are often shut out of the labor market, create their own jobs by starting small businesses, which will benefit our economy overall.”
“Entrepreneurship—from micro-enterprises to high-growth businesses—supports financial well-being and economic mobility, which are fundamental to reducing the lasting harm caused by incarceration,” said Laurin Leonard, Executive Director of Baltimore-based Mission: Launch. “The NEW START Act is an exciting opportunity to continue to invest in entrepreneurs who have demonstrated their commitment to positively contributing to their families and communities as well as their local economies.”
“JustLeadershipUSA is honored to reassert its strong support for the NEW START Act. As the only national criminal justice reform nonprofit that is both founded by and led by formerly incarcerated people, we know firsthand the many challenges that directly impacted people face upon reentry from prison. This would provide business counseling and entrepreneurial development training and resources that are both life-giving and humanity-affirming for those returning home after incarceration. It would also create opportunities for their families and their communities. As we continue to work to dismantle racist and oppressive systems that block people from the most basic of human needs such as housing, employment, and education, we know that small-business ownership is a critical pathway for thousands of people with criminal records, who have the brilliance and boldness to start new businesses. The NEW START Act would increase the overall number of people who are able to access these entrepreneurial opportunities,” said DeAnna Hoskins, President and CEO of JustLeadershipUSA.
“The U.S. Black Chambers, Inc. welcomes the introduction of the NEW START Act of 2023. According to the Sentencing Project, Black Americans are incarcerated at a rate that is roughly five times the rate of other Americans. Gaining access to economic opportunity after release is fraught with inequity, however, we know that providing opportunities for economic upskilling and entrepreneurial training increases economic opportunity and upward mobility upon release. The NEW START Act would establish a formal program for formerly incarcerated individuals by providing increased support to local organizations that prepare returning citizens for life after release. We believe that the NEW START Act is a critical step in the fight to eliminate racial inequities in the justice system, and we look forward to working with the Committee to ensure that this program can begin its work in our communities,” said Ron Busby Sr, President and CEO of the U.S. Black Chambers, Inc.
“NSBA is pleased to support the NEW START Act of 2023 as it would provide pathways to second chances for those who have served their debts to society by increasing opportunities through business ownership. We must ensure that all entrepreneurs are supported in their endeavors toward business ownership, and the NEW START ACT of 2023 affirms our collective commitment to the entrepreneurial ecosystem,” said Todd McCracken, President and CEO of NSBA.
“The NEW START Act of 2023 would bring much-needed technical training, trusted guidance, and entrepreneurial development programming to newly returning citizens and underserved communities. The NEW START Act would empower organizations that are skilled in transforming returning citizens into thriving entrepreneurs and underscore a public commitment towards investing in second chances. By empowering the creative potential of American citizens, entrepreneurship is known to reduce recidivism among returning citizens and it is critical that service providers gain the support of the federal government to continue their work and expand it in the years to come. AEO has remained a champion for re-entry policies centered around entrepreneurial development and urges Congress to act on establishing this pilot program into law,” said Connie E. Evans, President and CEO of the Association for Enterprise Opportunity.
“Entrepreneurship is a way for those with barriers to employment to create their own jobs. To be successful, business owners can tap into the wealth of mission-driven training and lending resources that are in their communities and supported by the Small Business Administration. For returning citizen entrepreneurs, these programs offer a support system that can guide them toward that success,” said Carolina Martinez, Chief Executive Officer of CAMEO.
“Many [returning citizens] struggle to find gainful employment upon release but are passionate about starting up their own enterprise. It often takes a loan of less than $20,000 to get a small business up and running, but access to this capital is a tremendous struggle for someone with a criminal history. With guidance, support, and resources, formerly incarcerated individuals can create new businesses that give back to the community and ultimately provide opportunities for others who have gone through similar circumstances. Support from legislation such as S. 1077 will create more avenues for entrepreneurial success, which ultimately strengthens public safety,” said Andrew Glazier, President and CEO of Defy Ventures.
“It is no secret that the U.S. criminal justice system continues to disproportionately impact communities of color. Due to structural racism within the system, BIPOC individuals are incarcerated at far higher rates than White individuals. Business ownership and entrepreneurship, which Prosperity Now recognizes as a means to narrow the racial wealth divide, can provide economic opportunity for returning citizens. The NEW START Act would do just that, equipping individuals with the know-how, skills, and networks to succeed in life post-release. Every individual should be able to pursue the American Dream, especially those who may be limited by a criminal record, as they are unable to seek traditional employment due to stigma. We look forward to working with the Senator and other supporters of the legislation to provide pathways to economic opportunity for returning citizens,” said Alejandra Montoya-Boyer, Director of Policy for Prosperity Now.
“The National Urban League believes that when returning citizens come home after paying their debt to society, it is our job to equip them with the tools they need to rebuild their lives,” said Marc H. Morial, President and CEO of the National Urban League. “We call on Congress to pass the New Start Act and provide returning citizens with another tool to successfully return to their local communities.”
The Brennan Center also endorsed the NEW START Act.
Every year, more than 600,000 people enter prison gates, and an estimated 10.6 million go to jail each year. Of the 600,000 individuals released each year, two thirds are rearrested and roughly half are reincarcerated within 3 years of release. An estimated 64.6 million Americans—25 percent of the adult-age population—have a criminal record of some kind.
One of the primary drivers of high recidivism rates is the inability to find a quality job: the unemployment rate among previously incarcerated individuals hovers around 27%, nine times the national average A review of prison entrepreneurship programs revealed that entrepreneurship drastically lowers the likelihood of recidivism. Additionally, a recent study found that entrepreneurship yields both higher income and also lower recidivism rates for returning citizens than traditional employment. While entrepreneurship can serve as a stable, high quality means of employment for returning citizens, they still face several barriers to starting and growing their own business.
To break down these barriers, Chair Cardin’s NEW START Act would build on the successes of programs across the country that have effectively deployed entrepreneurial development to reduce recidivism. In Texas, the Prison Entrepreneurship Program—which has graduated more than 2,300 justice impacted individuals—has helped 100 percent of its participants secure employment within 90 days and has helped its participants start more than 360 businesses. In Oregon, the State Department of Corrections found that participants in the Lifelong Information for Entrepreneurship Program were 41 percent less likely to recidivate. Defy Ventures, which operates in New York, California, Connecticut, Colorado, Washington, and Illinois, reports an 82 percent employment rate and a less than 5 percent recidivism rate for its released graduates.
Under the NEW START Act, organizations seeking grants from SBA must demonstrate ties to the business and justice impacted communities. Additionally, the organizations must partner with lenders in the existing SBA Microloan Program and Community Advantage program to provide loans to help qualifying program participants start and build their businesses. Click here to download a one-pager on the bill or here to read the full text.