A blanket law that forces all companies to hire employees without considering information they think is important is really inefficient. Just recently, governments and people were complaining that rideshare companies weren't being exclusive enough! If you think new laws will find the optimal policy for all companies, you are incorrect!
It's also overreaching. Freedom of association is important. The owner of a Jewish deli shouldn't be compelled to hire a formerly convicted neo-Nazi.
Who cares if they were convicted? That detail is shoehorned in here to make it sound like a good example when it isn't. Neo-nazis are not a protected class, and so the deli owner would be entirely within their rights to not hire someone on that basis, with or without a conviction on their criminal record.
And honestly how often do they get convicted of say, a hate crime, that might show up on a background check compared to the number of neo-nazis in the country with clean records, or who get acquitted, etc.?