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If a business is located in an area with a large minority population and refuses to sell to minorities, it will cut into its own profits. If some businesses run by bigoted employers refuse to pay women and/or minorities a wage based on their productivity, then other profit-seeking employers can hire these workers. In a competitive market , if the owners of a business care more about the color of money than about the color of skin, they will have an incentive to make buying, selling, hiring, and promotion decisions strictly based on economic factors.

The power of markets to offer at least a degree of freedom to oppressed groups should not be underestimated. In many countries, cohesive minority groups like Jews and emigrant Chinese have managed to carve out a space for themselves through their economic activities, despite legal and social discrimination against them. Many immigrants, including those who come to the United States, have taken advantage of economic freedom to make new lives for themselves. However, history teaches that market forces alone are unlikely to eliminate discrimination. After all, discrimination against African Americans persisted in the market-oriented U.S. economy during the century between President Abraham Lincoln’s Emancipation Proclamation, which freed the slaves in 1863, and the passage of the Civil Rights Act of 1964—and has continued since then, too.

So why does discrimination persist in competitive markets? Gary Becker sought to explain this persistence. Discriminatory impulses can emerge at a number of levels: among managers, among workers, and among customers. Consider the situation of a manager who is not personally prejudiced, but who has many workers or customers who are prejudiced. If that manager treats minority groups or women fairly, the manager may find it hurts the morale of prejudiced co-workers or drives away prejudiced customers. In such a situation, a policy of nondiscrimination could reduce the firm’s profits. After all, a business firm is part of society, and a firm that does not follow the societal norms is likely to suffer. Market forces alone are unlikely to overwhelm strong social attitudes about discrimination.

Visit this website to read more about wage discrimination.

Public policies to reduce discrimination

A first public policy step against discrimination in the labor market is to make it illegal. For example, the Equal Pay Act of 1963 said that men and women who do equal work at a company must be paid the same. The Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin. The Age Discrimination in Employment Act of 1967 prohibited discrimination on the basis of age against individuals who are 40 years of age or older. The Civil Rights Act of 1991 provides monetary damages in cases of intentional employment discrimination. The Pregnancy Discrimination Act of 1978 was aimed at prohibiting discrimination against women in the workplace who are planning to get pregnant, are pregnant, or are returning after pregnancy. Passing a law, however, is only part of the answer, since discrimination by prejudiced employers may be less important than broader social patterns.

Questions & Answers

what's economic
John Reply
what is the meaning of imperfect market structure
Hoyindamolah Reply
what is market economy
Jusu Reply
Market Economy:Is a system where the laws of supply and those demand direct the production of goods and services.
Iyabo
what's demand in economics?
Abi Reply
Demand in economic is the good a consumer is willing or able to purchase at a particular time
Hoyindamolah
explanation of graph,bar chart,pie chart with examples
Abdulmojeed
4. Assume, after completing your economics class, you explain your friend that about 65% of GDP is spending on consumption. Your friend tells you that people are greedy and it is better for GDP if they spend on services or experiences. What would be your answer to your friend?
Javohir Reply
What is power
Ahmad Reply
how can I choose a model for analyzing primary data?
Dipsikha Reply
economics is science because it used sciencetific ways in solving it problem
Mhizz
Is economics a science, more expanciate
Saliman Reply
yh because it adopts scientific methods in research and analysis of economic issues
maame
Analyse Eskom in terms of the characteristics of a monopoly
Brilliant Reply
microeconomics deals with individuals and firms while macroeconomics deal with the activities of the society in large
C-Stixxs Reply
Morning guys I need questions under any topic in economics
C-Stixxs
what is your question
Shalom
what definition did Adams Smith gave about economic
maame
why Economics is science
Fixed Reply
Ok
Olamilekan
what is economic
Arome Reply
is a science which studies human behavior as a relationship with ends n scarce which have alternative uses
C-Stixxs
Explain four reason why scale of preference is necessery
Afusat Reply
What's a perfectly elastic demand
jessica Reply
what is the perfect elasticity of demand
Beltus
what is a balance budget
Azayi Reply
balance budget is when the expenses ND tax re equal
Joseph
it is when expenditure and revenue are equal
C-Stixxs
what is a bar chart
Godwin Reply

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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