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Because it puts the business owner ahead of their competitors and neighbors (they are gaining from the favor of the state).

You make a fair point of incentives to hire prisoners rather than others though.

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There are going to be costs, but maybe this is actually a relatively low-cost option for helping to get prisoners back out into the world (and not back into prison). It is certainly cheaper than keeping them in prison. It says on that page that 10-20 percent of prisoners stay with their employer after being released. That seems low to me, but I haven't studied other solutions to this problem for comparison.

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