The $372 Billion Problem: What Criminal Records Cost America Every Year

$372 billion.

That is how much Americans with criminal records lose in earnings every year, according to the Brennan Center for Justice. Not over a lifetime. Not in a decade. Every single year.

That number is larger than the GDP of Hong Kong. It is enough to close New York City's poverty gap 60 times over. And it is the collective cost borne by roughly 70 to 78 million Americans who have some form of criminal record — about one in three adults.

This article breaks down that number: what a criminal record costs one person, what it costs the country, who bears the heaviest burden, and what the research says about the one intervention that actually works.

The cost of a criminal record for one person

The headline number is staggering, but the individual math is where it hits. A person who has been incarcerated earns, on average, 52% less over their lifetime than a comparable person who was never incarcerated, according to a Brennan Center analysis using National Longitudinal Survey of Youth data.

In dollar terms, that translates to between $267,000 and $511,500 in lost lifetime earnings per person, depending on race. White individuals lose an average of $267,000. Black individuals lose $358,900. Latino individuals lose $511,500. The criminal legal system does not impose its costs equally.

Even before a person starts looking for work after serving time, the system has already extracted a price. The federal government spends $44,090 per year to incarcerate a single federal inmate. At the state level, the Vera Institute puts the median at $60,989 per prisoner per year. That money comes from taxpayers. It does not come back.

Once someone is released and begins looking for work, the record follows them into every application. A landmark audit study by Devah Pager at Princeton found that job applicants who disclosed a criminal record received 50% fewer callbacks than identical applicants without one. A follow-up correspondence study by Agan and Starr put the gap even higher: 63% more callbacks for applicants without a record.

And it is not just employment. 90% of landlords use automated background checks on rental applications, according to the Thurgood Marshall Institute. A single old arrest — even one that never led to a conviction — can block someone from housing for years.

The national cost of criminal records

When you add up 70 to 78 million people with reduced earning power, the national numbers become almost incomprehensible.

The Center for Economic and Policy Research estimates $87 billion in lost GDP every year due to employment barriers facing people with felony convictions alone. That figure does not count people with misdemeanor records, arrest-only records, or non-conviction records — all of which show up on background checks and reduce hiring.

Meanwhile, a $5.1 billion background check industry profits from the system that keeps these records accessible. Nearly 2,000 background screening companies operate in the United States. Less than 1% of them have undergone voluntary accuracy audits, according to the National Consumer Law Center.

The cost comparison is striking. Taxpayers spend roughly $61,000 per year to keep one person in a state prison. An expungement petition typically costs under $500. The return on investment for clearing records is not marginal — it is orders of magnitude.

The racial dimension

These costs do not fall evenly. They land hardest on Black and Latino communities, compounding generations of inequality.

Black Americans are incarcerated at five times the rate of white Americans, according to The Sentencing Project. One in three African American men has a felony conviction on their record, per a University of Georgia study cited by The Sentencing Project. That felony record creates compounding barriers to employment, housing, and voting that persist for decades.

The disparity starts at sentencing. Black men receive federal sentences 13.4% longer than white men convicted of similar offenses, according to the United States Sentencing Commission. Longer sentences mean longer records, more lost working years, and deeper economic damage.

And the damage continues after release. Pager's audit study found that a Black job applicant with a clean record receives about the same number of callbacks as a white applicant with a felony conviction. When a Black applicant also has a record, the compounding effect is devastating.

In Oregon, the disparity is stark: 60% of Black Oregonians have a criminal conviction, compared to 17% of white Oregonians, according to the ACLU of Oregon. Expungement access is not just a legal question. It is a civil rights issue.

These are not abstract numbers. Each one represents a real person — a parent who cannot get stable housing for their children, a worker who cannot access a living wage, a community that loses talent and economic energy because the system will not let people move forward.

The fix that actually works: expungement outcomes

Here is the part of the story that does not get enough attention. When people clear their records, the outcomes are remarkably good.

The most cited research on expungement outcomes comes from Professors J.J. Prescott and Sonja Starr at the University of Michigan, published in the Harvard Law Review. They tracked thousands of Michigan residents who received expungements and compared their outcomes to eligible individuals who did not file.

That last number deserves emphasis. A Stanford cost-benefit analysis found that every single expungement generates an estimated $34,308 in government revenue over three years — through increased income tax payments, reduced use of social services, and lower criminal justice costs. Expungement is not charity. It is an investment that pays for itself many times over.

And the safety argument? The data demolishes it. People who receive expungement are re-convicted at a rate of just 4.2% within five years — for any crime. The rate for violent crime is 0.6%. These are among the lowest-risk individuals in society. Clearing their records does not endanger anyone. Keeping their records active costs everyone.

Why so few people file

If the outcomes are this good, why isn't everyone filing? Because the system was not designed to make it easy.

Only 6.5% of people legally eligible for expungement actually complete the process within five years of becoming eligible, according to Prescott and Starr. Researchers call this the "second chance gap" — the distance between what the law allows and what people actually receive.

In New York, before the Clean Slate Act, only 0.2% of eligible New Yorkers had successfully sealed their criminal records. In Illinois, 90% of eligible people have never even started the process.

In Oregon specifically, only 5.5% of eligible Oregonians obtained expungement relief before SB 397 was passed. At the pre-SB 397 pace, it would have taken 77 years to clear Oregon's backlog of eligible cases.

Thirteen states and Washington, D.C. have now passed Clean Slate automatic expungement laws. That is progress. But 37 states still require people to navigate the process themselves — and in those states, the second chance gap remains enormous.

What you can do

If you have a criminal record, or know someone who does, here are the concrete steps that matter.

Check your state's laws. Every state has different eligibility rules, waiting periods, and processes. We maintain free guides for all 50 states. Start by exploring your options — it takes about five minutes, costs nothing, and tells you what your state allows.

Understand the process. Expungement is paperwork, not magic. It involves filling out forms, paying a filing fee (often waivable), and attending a brief hearing. We have a detailed walkthrough of what doing it yourself actually involves.

Know the real costs. Filing fees vary by state — from $0 in Oregon to a few hundred dollars elsewhere. Many states offer fee waivers for people who cannot afford the fee. We break it all down in our cost guide.

Consider a DIY kit if your state is supported. Our Oregon DIY Kit ($149) includes pre-filled court forms, a step-by-step checklist, and process reminders at every milestone. It is not a substitute for a lawyer when you need one. It is a tool for the majority of straightforward cases where an attorney is not required.

Clear the private databases too. Expungement clears the court record, but private background check companies do not always update automatically. Our Record Sweep sends FCRA dispute letters to 164+ background check companies to make sure the expungement sticks everywhere it matters.

Frequently asked questions

How much does a criminal record actually cost per year?

Research varies by methodology, but the Brennan Center's analysis of National Longitudinal Survey data found a 52% lifetime earnings reduction for formerly incarcerated people. Other studies estimate annual wage penalties between $5,000 and $12,000 depending on offense type and geography. The collective annual cost across all Americans with records is $372.3 billion in lost earnings.

Does expungement actually increase wages?

Yes. The largest study (Prescott & Starr, 2020) found a 22% average wage increase within one year of expungement. A Stanford analysis found an average $6,190 annual income increase per person. Both findings are from observed data, not projections.

Is expungement safe? Will people re-offend?

The data says no. Within five years, only 4.2% of expungement recipients are re-convicted of any crime, and only 0.6% for a violent crime. 96% stay crime-free. These rates are lower than the general population's offense rate.

Why do so few eligible people file for expungement?

Researchers have identified four primary barriers: not knowing they are eligible, thinking it is too expensive, believing they need a lawyer, and doubting it would make a difference. Only 6.5% of eligible people complete the process within five years of becoming eligible.

How do I find out if my record can be cleared?

Start with your state's specific rules. Every state is different. You can explore your options here for free, or consult with a legal aid organization in your state. We also maintain state-by-state guides that explain eligibility rules, waiting periods, and processes.