Wall Street's Solution for Repeat Offenders?
Goldman Sachs is banking on a program to reduce recidivism among New York's incarcerated.
(The Root) -- One could argue that the barons of Wall Street don't usually wake up in the morning wondering whether the decisions they make before sundown will advance or hinder America's prison population. However, an experimental effort involving investment firm Goldman Sachs that will launch later this year may change all that.
Earlier this month, New York City Mayor Michael Bloomberg announced that the company will loan the city $9.6 million to finance a program designed to reduce recidivism -- the rate at which newly freed inmates return to jail -- among young men imprisoned at Rikers Island.
As part of Bloomberg's nascent Young Men's Initiative, the four-year program known as the Adolescent Behavioral Learning Experience will provide education and counseling that encourage responsible behavior for an estimated 3,400 Rikers inmates per year. The aim of the specialized training is to reduce the likelihood that they will return to prison, which New York officials say happens to 50 percent of young men within 12 months of their release from Rikers.
If the program reduces recidivism by 10 percent, Goldman will get its money back, according to reports. If there's a drop of more than 10 percent, the firm could earn as much as $2.1 million. But if the rate of reincarceration falls by less than 10 percent, it could lose up to $2.4 million.
Depending on the success of the ABLE model, New York and other cities may be encouraged to utilize more "social impact bonds" -- the investment vehicle through which Goldman is financing the program. Other areas that could benefit include novel educational efforts for inner-city children, programs that succeed in reducing teen pregnancy or solutions to the obesity epidemic.
It's quite intriguing to witness Goldman Sachs, a shining emblem of all that's good and all that's bad about Wall Street, getting involved with the criminal-justice system in a way that could be helpful to young incarcerated men.