Proctor
10-30-2013, 09:44 PM
The Case Against Anti-discrimination Laws.
Self-appointed spokesmen for "oppressed" groups love to blame the free market for all the "inequities" of modern society. Were it not for benevolent government intervention, these people claim, blacks would still use separate water fountains and women could serve only as nurses and teachers. Yet as with other anti capitalist myths, we will see that the true situation is precisely the opposite: the market contains powerful incentives for employers to make objective decisions based on merit, while government agencies face no such constraints.
The free market's "racist fee"
We need to be clear what we mean by discrimination when we say it is bad. In the most literal sense, discrimination is inevitable and good. An employer ought to be "discriminating" in that he should aim to hire people who are hardworking, talented, knowledgeable, trustworthy, and so on.
But even discrimination based on sex, race, or other "superficial" characteristics is often fine by any normal standards. Consider the awardwinning film The Hours, in which one of the characters is the author Virginia Woolf. Now suppose Dustin Hoffman came in to audition for that part (a job that ultimately went to Nicole Kidman). Even if Hoffman touted his portrayal of a woman in Tootsie as his credentials for the role of Virginia Woolf, a casting director would no doubt rule Hoffman out simply because, whatever his acting talent, his sex was a more important factor.
Guess what?
The free market penalizes discrimination.
The male/female "wage gap" is largely a myth.
Real discrimination occurs at the hands of government and unions.
Consider a different case: in the United States, black people constitute about 12.5 percent of the overall population, yet about 77 percent of NBA players are black. Is this prima facie evidence of gross racial bias in the hiring process for professional basketball? Again, obviously not.
What then do we mean when discussing discrimination in the labor market?
You might think we mean "prejudice"-or, more accurately, bigotrybut that's not necessarily true either. For example, it's possible that the late Marge Schott, controversial owner of the Cincinnati Reds, was, despite her protestations to the contrary, a genuine racist and supporter of Adolf Hitler, as some of her comments seemed to indicate. However, notwithstanding her pejorative description of employees Eric Davis and Dave Parker, Schott presumably didn't let her racial attitudes affect her hiring and salary decisions-after all, black players were among the stars on the team, and the Reds won the World Series five years after Schott was named president and CEO. Her hiring and salary policies seemed more concerned with success on the field and on the ledger sheet.
We care about workplace discrimination if an employer hires, rejects, promotes, or fires someone not because of his or her performance or potential, but because of his or her race, sex, or other irrelevant characteristic.
That's exactly where the free market provides the best solution. If employers make hiring and salary decisions based on criteria that are irrelevant to the success of the company, guess what? The free market punishes them. An employer who refused to hire, sell to, or deal with blacks, Hispanics, Jews, women, Catholics, or any other group would be harming himself, limiting his market, and shrinking his own pool of available talent and hence of productive managers and workers.
Discrimination is bad for business
Let's get specific. If an employer has an opening that pays $50,000 in salary, and the Christian applicant will bring in $51,000 in extra revenue to the firm while the Muslim applicant will bring in $55,000, then to discriminate against the creed of the latter will cost the employer $4,000 in potential profits. (The employer will make $1,000 by hiring the Christian but $5,000 by hiring the Muslim.) No government inspector or watchdog agency is required: by definition, discrimination is automatically "fined" in the free market.
In addition, not only does the market catch discrimination whenever it occurs, but the amount of the "fine" is also exactly proportional to the severity of the discrimination. If a businessman hires his nephew to paint his store, even though a stranger's kid would do the same job for $50 less, then the nepotism has cost him $50. But if the businessman hires his nephew to design the company's website and create a marketing campaign-rather than outsourcing these jobs to true professionals-the decision to "keep it in the family" will be far more expensive.
In short, employers are free to discriminate in the free market, but this discrimination certainly isn't free.
The "discriminating" customer
Employers pay a price when they hire people on the basis of some other criterion than productivity. But couldn't businessmen make profits by catering to prejudices held by customers? For example, if a restaurateur knows that many of his customers would object to being served by a black waitress, and that they would act on this prejudice by taking their business elsewhere, then it would be more profitable (assuming he had no fear of lawsuits or government fines) for him to hire a less-qualified white woman for the job.
But in cases like this the free market (even absent government fines) still punishes discrimination-only this time the customer pays the "racist fee": the customer pays extra (in the form of inferior service) to be served by a white waitress who is worse at her job than a better-qualified black candidate.
There is really nothing mysterious or inherently objectionable about this process per se. People pay for what they want all the time. People pay more to see a Broadway show than they do to see a community theater knockoff production, and they pay more to be served prime rib by extremely polite, well-dressed staff than to be tossed a burger by a rude teenager in a grease-soaked apron. In these contexts, to have "discriminating taste" is laudable.
A promoter will offer George Carlin far more money than, say, the watermelon-smashing Leo Gallagher, and the obvious explanation is that the public will pay more to see the comedy of the former. There is nothing "objective" about this preference, and indeed many Gallagher fans might consider it unfair. By the same token, it is undeniable that part of the financial success of Angelina Jolie, Jennifer Lopez, and Nicole Kidman is due to their beauty-these women make far more money than they would if they were horribly disfigured. Does this constitute discrimination against ugly singers or actresses?
Most people would probably answer by saying, "Yes, in a sense, but that's not what we mean when we say we're against discrimination." What people really mean by "discrimination" in the pejorative sense is acting on a preference that the critic doesn't possess himself. In short, most people don't want to watch movies with ugly stars, and so they don't much object to the obvious "bias" in Hollywood in favor of pretty people. But on the other hand, most people don't think it matters (or at least want to be people who think it doesn't matter) to be served by a Christian versus a Muslim, and so have no problem voting for politicians pledging to ban this type of preference.
A Book You're Not Supposed to Read
The State against Blacks by Walter Williams; New York: McGraw-Hill, 1984.
Private property and the freedom of association
Government edicts attempting to curb "discrimination" underscore a contradiction in the American political landscape. On the one hand, people are supposedly free to form whatever associations they wish, free from government intimidation. Thus, if a racist has only white friends, and invites only white people to his dinner parties, the vast majority of Americans would conclude that while he is a reprehensible person, he shouldn't actually be fined (let alone imprisoned) for his actions, and shouldn't under court order have to invite blacks to his parties. "After all," some might say, "the guy owns his house and he can choose his own friends and have whoever he wants to parties so long as they don't disturb the peace. Sure, he's a jerk, but it's not a crime to be a jerk."
There's nothing "affirmative" about affirmative action
One of the proposed remedies for racial and sexual discrimination is "affirmative action," whereby employers must strive to ensure that qualified minorities and women are considered for hiring or promotions. Proponents of affirmative action are quick to distinguish it from quotas-the law doesn't require that a firm choose a less-qualified black applicant for a job, only that the firm make every effort to make sure there isn't an equally qualified black applicant before hiring the white guy. Despite the official wording of the statutes, however, experience has shown that the easiest way for a company to demonstrate its commitment to affirmative action (and hence defend itself from lawsuits) is to hire in proportion to the racial mix of the surrounding community. Thus the zealous effort to
The Myth of the Male/Female "Wage Gap"
There is no male/female "salary gap" in the free market. Such gaps in wages that exist between men and women result from other relevant data, like job experience, educational background, different pay scales in different fields, and so on. The more one corrects for these crucial factors, the more the gap disappears. Indeed, according to Thomas Sowell, merely adjusting for marital status can eliminate the gap altogether in certain fields. Sowell finds that "never married" academic women are paid more than "never married" academic men. While it might be true that traditional marriage roles (with the husband as the provider and the wife as the mother and homemaker) favor a husband's career over a mother's, that isn't the fault of capitalism; and it's only a "fault" at all if you think a job in the marketplace is more important than the job of raising a family and caring for a home.'
alleviate past injustices has led to the institutionalization of genuine racial and sexual discrimination.
Ironically, affirmative action hurts the very groups it is supposed to help. For one thing, every time a black or other protected minority is hired or promoted, the surly white males who were passed over can blame it on affirmative action, even if the decision was based purely on merit. Perhaps more serious, by "breaking down barriers," affirmative action sets up the historically "disadvantaged" groups for failure. As Thomas Sowell explains:
It makes a very real difference that 90 percent of the white MIT students score higher in math than the average black MIT student. A substantially higher percentage of the black students fail to finish MIT, and those who do graduate have substantially lower grade-point averages.
The tragedy is that this waste-one-fourth of the black students don't graduate at MIT-is completely unnecessary. The average black student at MIT is well above the national average on math tests. He is just not in the stratospheric level of other MIT students.
At most colleges, universities, or technical institutes, these same black students would be on the dean's list.
In short, black students with every prospect of success are artificially turned into failures by being mismatched with their college. This is not peculiar to MIT. It is a nationwide phenomenon among elite schools, who are more interested in having a goodlooking body count from every group than they are in the price that has to be paid.
Affirmative Action ... on the Farm
"All animals are equal, but some animals are more equal than others."
George Orwell, Animal Farm
Everyone pays a very high price for this academic fad. Disadvantaged minority students pay the highest price of all. Asians maybe lucky that they are not considered "minority."'
The problem, suffice it to say, is not with color-blind test scores that assess a student's chances for success in a subject, but with colorconscious admissions criteria that mismatch students and schools.
So everything's hunky-dory?
Naturally, a reader who is quite convinced of the prevalence of unjust racial and sexual discrimination would find this chapter's analysis absurd, for it seems to (attempt to) logically refute something that is quite evident to anyone with eyes. But the problem isn't with the arguments above. Unfortunately, neither the United States nor any other country has an entirely free labor market, and so we can't count on market forces to eradicate the unjust discrimination that offends most people.
It remains a mystery why leftists trust government to reform an unjust society. After all, any prejudices harbored by the people at large will be reflected in the government officials they elect. The only difference is that bureaucrats don't face the same free market penalties that employers (or customers) do for following their prejudices. (By the same token, kickbacks and other forms of corruption are far more dangerous in government than in the private sector, because shareholders have far more incentives than do congressmen to detect waste, fraud, and abuse.)
Indeed, the most horrible and "unfair" employment decisions in history-such as the persecution of academics during China's Cultural Revolution or the Nuremberg Laws of Nazi Germany-have occurred at the hands of governments. Chairman Mao and Adolf Hitler made such decisions because the perverse incentives of state control shielded them from the monumental damage they wreaked. In contrast, no matter how prejudiced he might be, Bill Gates would never decide to fire all his top software developers if they had different political views, or if they were of Semitic origin; such a decision would simply cost too much. And if he did indulge such prejudices, he'd have to pay a steep economic price as talented Jewish and conservative software developers flooded to his competitors. Clearly discriminatory systems, such as apartheid in South Africa or Jim Crow laws in the Reconstruction-era American South, were set up by governments.
Another consideration is the role of labor unions. When the government gives a nod and a wink to union violence, we no longer have a free labor market, and thus we can't trust in market forces to penalize discrimination. For example, in a purely free market a building contractor would have no financial reason to prefer white construction workers to black. Even if the white crew in question (for whatever reason) were more talented, the black construction crew could offer to work for lower salaries, making them more attractive to employers, at least for less-skilled positions. Blacks would be on an equal footing with whites for job opportunities because they could compete on price. But if unions (made up, say, of predominantly white workers) were allowed to form picket lines and beat any "scabs" to a bloody pulp, then the building contractor has no choice but to hire unionized (and in this case, predominantly white) workers. Non-union blacks could be driven out of the market.
These are not abstract speculations. The Davis-Bacon Act of 1931 requires that all federally funded construction contracts pay "locally prevailing wages." The act was ostensibly pro-labor, but many cynics viewed it as a way to keep tax dollars from being funneled into the hands of black construction workers. In effect, the act made it illegal for black workers to submit a low bid for federal construction contracts, and thus awarding the contracts to the (more experienced but more expensive) white unions wouldn't appear discriminatory.
A Book You're Not Supposed to Read
Reflections of an Affirmative Action Baby by Stephen L. Carter; New York: Basic Books, 1991.
Women are also disproportionately hurt by "pro-labor" legislation. One of Bill Clinton's major coups, the Family and Medical Leave Act (FMLA) of 1993, guarantees employees up to twelve weeks of unpaid time off per year to care for a newborn, sick spouse, ailing parent, etc. The employer has to hold the worker's job, or provide a comparable one upon the employee's return. In addition, although the leave is unpaid, the employee is still entitled to benefits (such as health insurance) from the employer.
Supporters of the Davis-Bacon Act of 1931
Congressman John Cochran of Missouri said he had "received numerous complaints in recent months about Southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South."
Alabama congressman Clayton Allgood complained: "Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country."
Georgia congressman William Upshaw complained of the "superabundance or large aggregation of negro labor," which is a real problem "you are confronted with in any community."
New York congressman Robert Bacon replied, "I just mentioned the fact because that was the fact in this particular case, but the same would be true if you should bring in a lot of Mexican laborers or if you brought in any non-union laborers from any other state."
Other congressmen railed against "transient labor," or "cheap labor," or "cheap imported labor." American Federation of Labor president William Green translated what these words meant when he said, "(C)olored labor is being sought to demoralize wage rates."3
Now what impact does the FMLA have on the labor market? The most obvious and immediate effect will be a reduction in salaries. Regardless of whether it is "the right thing to do," surely no one can deny that it is costly for the employer to grant such flexibility to employees. Now, since a firm won't hire a worker if it expects to lose money on the arrangement, that extra cost (due to the FMLA) must be offset by a lower salary.
Beyond this general effect, however, is a subtler one. Although the language of the statute does not differentiate between men and womenunder the FMLA, new fathers are just as eligible as mothers to take twelve weeks off to care for the baby-employers know that a young, married female applicant for a job opening is statistically more likely to exercise her legal rights a few years down the road, as compared to a middle-aged bachelor or a married man (as married men are less likely to take time off to care for children than married women are). Thus the FMLA lowers the relative salaries of women compared to men, and especially lowers the salaries of young married women, since the law turns them into ticking financial liabilities.
There's a name for this-it's the law of unintended consequences, unless we think that the secret agenda of the FMLA was to discourage women from getting married and having children.
Self-appointed spokesmen for "oppressed" groups love to blame the free market for all the "inequities" of modern society. Were it not for benevolent government intervention, these people claim, blacks would still use separate water fountains and women could serve only as nurses and teachers. Yet as with other anti capitalist myths, we will see that the true situation is precisely the opposite: the market contains powerful incentives for employers to make objective decisions based on merit, while government agencies face no such constraints.
The free market's "racist fee"
We need to be clear what we mean by discrimination when we say it is bad. In the most literal sense, discrimination is inevitable and good. An employer ought to be "discriminating" in that he should aim to hire people who are hardworking, talented, knowledgeable, trustworthy, and so on.
But even discrimination based on sex, race, or other "superficial" characteristics is often fine by any normal standards. Consider the awardwinning film The Hours, in which one of the characters is the author Virginia Woolf. Now suppose Dustin Hoffman came in to audition for that part (a job that ultimately went to Nicole Kidman). Even if Hoffman touted his portrayal of a woman in Tootsie as his credentials for the role of Virginia Woolf, a casting director would no doubt rule Hoffman out simply because, whatever his acting talent, his sex was a more important factor.
Guess what?
The free market penalizes discrimination.
The male/female "wage gap" is largely a myth.
Real discrimination occurs at the hands of government and unions.
Consider a different case: in the United States, black people constitute about 12.5 percent of the overall population, yet about 77 percent of NBA players are black. Is this prima facie evidence of gross racial bias in the hiring process for professional basketball? Again, obviously not.
What then do we mean when discussing discrimination in the labor market?
You might think we mean "prejudice"-or, more accurately, bigotrybut that's not necessarily true either. For example, it's possible that the late Marge Schott, controversial owner of the Cincinnati Reds, was, despite her protestations to the contrary, a genuine racist and supporter of Adolf Hitler, as some of her comments seemed to indicate. However, notwithstanding her pejorative description of employees Eric Davis and Dave Parker, Schott presumably didn't let her racial attitudes affect her hiring and salary decisions-after all, black players were among the stars on the team, and the Reds won the World Series five years after Schott was named president and CEO. Her hiring and salary policies seemed more concerned with success on the field and on the ledger sheet.
We care about workplace discrimination if an employer hires, rejects, promotes, or fires someone not because of his or her performance or potential, but because of his or her race, sex, or other irrelevant characteristic.
That's exactly where the free market provides the best solution. If employers make hiring and salary decisions based on criteria that are irrelevant to the success of the company, guess what? The free market punishes them. An employer who refused to hire, sell to, or deal with blacks, Hispanics, Jews, women, Catholics, or any other group would be harming himself, limiting his market, and shrinking his own pool of available talent and hence of productive managers and workers.
Discrimination is bad for business
Let's get specific. If an employer has an opening that pays $50,000 in salary, and the Christian applicant will bring in $51,000 in extra revenue to the firm while the Muslim applicant will bring in $55,000, then to discriminate against the creed of the latter will cost the employer $4,000 in potential profits. (The employer will make $1,000 by hiring the Christian but $5,000 by hiring the Muslim.) No government inspector or watchdog agency is required: by definition, discrimination is automatically "fined" in the free market.
In addition, not only does the market catch discrimination whenever it occurs, but the amount of the "fine" is also exactly proportional to the severity of the discrimination. If a businessman hires his nephew to paint his store, even though a stranger's kid would do the same job for $50 less, then the nepotism has cost him $50. But if the businessman hires his nephew to design the company's website and create a marketing campaign-rather than outsourcing these jobs to true professionals-the decision to "keep it in the family" will be far more expensive.
In short, employers are free to discriminate in the free market, but this discrimination certainly isn't free.
The "discriminating" customer
Employers pay a price when they hire people on the basis of some other criterion than productivity. But couldn't businessmen make profits by catering to prejudices held by customers? For example, if a restaurateur knows that many of his customers would object to being served by a black waitress, and that they would act on this prejudice by taking their business elsewhere, then it would be more profitable (assuming he had no fear of lawsuits or government fines) for him to hire a less-qualified white woman for the job.
But in cases like this the free market (even absent government fines) still punishes discrimination-only this time the customer pays the "racist fee": the customer pays extra (in the form of inferior service) to be served by a white waitress who is worse at her job than a better-qualified black candidate.
There is really nothing mysterious or inherently objectionable about this process per se. People pay for what they want all the time. People pay more to see a Broadway show than they do to see a community theater knockoff production, and they pay more to be served prime rib by extremely polite, well-dressed staff than to be tossed a burger by a rude teenager in a grease-soaked apron. In these contexts, to have "discriminating taste" is laudable.
A promoter will offer George Carlin far more money than, say, the watermelon-smashing Leo Gallagher, and the obvious explanation is that the public will pay more to see the comedy of the former. There is nothing "objective" about this preference, and indeed many Gallagher fans might consider it unfair. By the same token, it is undeniable that part of the financial success of Angelina Jolie, Jennifer Lopez, and Nicole Kidman is due to their beauty-these women make far more money than they would if they were horribly disfigured. Does this constitute discrimination against ugly singers or actresses?
Most people would probably answer by saying, "Yes, in a sense, but that's not what we mean when we say we're against discrimination." What people really mean by "discrimination" in the pejorative sense is acting on a preference that the critic doesn't possess himself. In short, most people don't want to watch movies with ugly stars, and so they don't much object to the obvious "bias" in Hollywood in favor of pretty people. But on the other hand, most people don't think it matters (or at least want to be people who think it doesn't matter) to be served by a Christian versus a Muslim, and so have no problem voting for politicians pledging to ban this type of preference.
A Book You're Not Supposed to Read
The State against Blacks by Walter Williams; New York: McGraw-Hill, 1984.
Private property and the freedom of association
Government edicts attempting to curb "discrimination" underscore a contradiction in the American political landscape. On the one hand, people are supposedly free to form whatever associations they wish, free from government intimidation. Thus, if a racist has only white friends, and invites only white people to his dinner parties, the vast majority of Americans would conclude that while he is a reprehensible person, he shouldn't actually be fined (let alone imprisoned) for his actions, and shouldn't under court order have to invite blacks to his parties. "After all," some might say, "the guy owns his house and he can choose his own friends and have whoever he wants to parties so long as they don't disturb the peace. Sure, he's a jerk, but it's not a crime to be a jerk."
There's nothing "affirmative" about affirmative action
One of the proposed remedies for racial and sexual discrimination is "affirmative action," whereby employers must strive to ensure that qualified minorities and women are considered for hiring or promotions. Proponents of affirmative action are quick to distinguish it from quotas-the law doesn't require that a firm choose a less-qualified black applicant for a job, only that the firm make every effort to make sure there isn't an equally qualified black applicant before hiring the white guy. Despite the official wording of the statutes, however, experience has shown that the easiest way for a company to demonstrate its commitment to affirmative action (and hence defend itself from lawsuits) is to hire in proportion to the racial mix of the surrounding community. Thus the zealous effort to
The Myth of the Male/Female "Wage Gap"
There is no male/female "salary gap" in the free market. Such gaps in wages that exist between men and women result from other relevant data, like job experience, educational background, different pay scales in different fields, and so on. The more one corrects for these crucial factors, the more the gap disappears. Indeed, according to Thomas Sowell, merely adjusting for marital status can eliminate the gap altogether in certain fields. Sowell finds that "never married" academic women are paid more than "never married" academic men. While it might be true that traditional marriage roles (with the husband as the provider and the wife as the mother and homemaker) favor a husband's career over a mother's, that isn't the fault of capitalism; and it's only a "fault" at all if you think a job in the marketplace is more important than the job of raising a family and caring for a home.'
alleviate past injustices has led to the institutionalization of genuine racial and sexual discrimination.
Ironically, affirmative action hurts the very groups it is supposed to help. For one thing, every time a black or other protected minority is hired or promoted, the surly white males who were passed over can blame it on affirmative action, even if the decision was based purely on merit. Perhaps more serious, by "breaking down barriers," affirmative action sets up the historically "disadvantaged" groups for failure. As Thomas Sowell explains:
It makes a very real difference that 90 percent of the white MIT students score higher in math than the average black MIT student. A substantially higher percentage of the black students fail to finish MIT, and those who do graduate have substantially lower grade-point averages.
The tragedy is that this waste-one-fourth of the black students don't graduate at MIT-is completely unnecessary. The average black student at MIT is well above the national average on math tests. He is just not in the stratospheric level of other MIT students.
At most colleges, universities, or technical institutes, these same black students would be on the dean's list.
In short, black students with every prospect of success are artificially turned into failures by being mismatched with their college. This is not peculiar to MIT. It is a nationwide phenomenon among elite schools, who are more interested in having a goodlooking body count from every group than they are in the price that has to be paid.
Affirmative Action ... on the Farm
"All animals are equal, but some animals are more equal than others."
George Orwell, Animal Farm
Everyone pays a very high price for this academic fad. Disadvantaged minority students pay the highest price of all. Asians maybe lucky that they are not considered "minority."'
The problem, suffice it to say, is not with color-blind test scores that assess a student's chances for success in a subject, but with colorconscious admissions criteria that mismatch students and schools.
So everything's hunky-dory?
Naturally, a reader who is quite convinced of the prevalence of unjust racial and sexual discrimination would find this chapter's analysis absurd, for it seems to (attempt to) logically refute something that is quite evident to anyone with eyes. But the problem isn't with the arguments above. Unfortunately, neither the United States nor any other country has an entirely free labor market, and so we can't count on market forces to eradicate the unjust discrimination that offends most people.
It remains a mystery why leftists trust government to reform an unjust society. After all, any prejudices harbored by the people at large will be reflected in the government officials they elect. The only difference is that bureaucrats don't face the same free market penalties that employers (or customers) do for following their prejudices. (By the same token, kickbacks and other forms of corruption are far more dangerous in government than in the private sector, because shareholders have far more incentives than do congressmen to detect waste, fraud, and abuse.)
Indeed, the most horrible and "unfair" employment decisions in history-such as the persecution of academics during China's Cultural Revolution or the Nuremberg Laws of Nazi Germany-have occurred at the hands of governments. Chairman Mao and Adolf Hitler made such decisions because the perverse incentives of state control shielded them from the monumental damage they wreaked. In contrast, no matter how prejudiced he might be, Bill Gates would never decide to fire all his top software developers if they had different political views, or if they were of Semitic origin; such a decision would simply cost too much. And if he did indulge such prejudices, he'd have to pay a steep economic price as talented Jewish and conservative software developers flooded to his competitors. Clearly discriminatory systems, such as apartheid in South Africa or Jim Crow laws in the Reconstruction-era American South, were set up by governments.
Another consideration is the role of labor unions. When the government gives a nod and a wink to union violence, we no longer have a free labor market, and thus we can't trust in market forces to penalize discrimination. For example, in a purely free market a building contractor would have no financial reason to prefer white construction workers to black. Even if the white crew in question (for whatever reason) were more talented, the black construction crew could offer to work for lower salaries, making them more attractive to employers, at least for less-skilled positions. Blacks would be on an equal footing with whites for job opportunities because they could compete on price. But if unions (made up, say, of predominantly white workers) were allowed to form picket lines and beat any "scabs" to a bloody pulp, then the building contractor has no choice but to hire unionized (and in this case, predominantly white) workers. Non-union blacks could be driven out of the market.
These are not abstract speculations. The Davis-Bacon Act of 1931 requires that all federally funded construction contracts pay "locally prevailing wages." The act was ostensibly pro-labor, but many cynics viewed it as a way to keep tax dollars from being funneled into the hands of black construction workers. In effect, the act made it illegal for black workers to submit a low bid for federal construction contracts, and thus awarding the contracts to the (more experienced but more expensive) white unions wouldn't appear discriminatory.
A Book You're Not Supposed to Read
Reflections of an Affirmative Action Baby by Stephen L. Carter; New York: Basic Books, 1991.
Women are also disproportionately hurt by "pro-labor" legislation. One of Bill Clinton's major coups, the Family and Medical Leave Act (FMLA) of 1993, guarantees employees up to twelve weeks of unpaid time off per year to care for a newborn, sick spouse, ailing parent, etc. The employer has to hold the worker's job, or provide a comparable one upon the employee's return. In addition, although the leave is unpaid, the employee is still entitled to benefits (such as health insurance) from the employer.
Supporters of the Davis-Bacon Act of 1931
Congressman John Cochran of Missouri said he had "received numerous complaints in recent months about Southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South."
Alabama congressman Clayton Allgood complained: "Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country."
Georgia congressman William Upshaw complained of the "superabundance or large aggregation of negro labor," which is a real problem "you are confronted with in any community."
New York congressman Robert Bacon replied, "I just mentioned the fact because that was the fact in this particular case, but the same would be true if you should bring in a lot of Mexican laborers or if you brought in any non-union laborers from any other state."
Other congressmen railed against "transient labor," or "cheap labor," or "cheap imported labor." American Federation of Labor president William Green translated what these words meant when he said, "(C)olored labor is being sought to demoralize wage rates."3
Now what impact does the FMLA have on the labor market? The most obvious and immediate effect will be a reduction in salaries. Regardless of whether it is "the right thing to do," surely no one can deny that it is costly for the employer to grant such flexibility to employees. Now, since a firm won't hire a worker if it expects to lose money on the arrangement, that extra cost (due to the FMLA) must be offset by a lower salary.
Beyond this general effect, however, is a subtler one. Although the language of the statute does not differentiate between men and womenunder the FMLA, new fathers are just as eligible as mothers to take twelve weeks off to care for the baby-employers know that a young, married female applicant for a job opening is statistically more likely to exercise her legal rights a few years down the road, as compared to a middle-aged bachelor or a married man (as married men are less likely to take time off to care for children than married women are). Thus the FMLA lowers the relative salaries of women compared to men, and especially lowers the salaries of young married women, since the law turns them into ticking financial liabilities.
There's a name for this-it's the law of unintended consequences, unless we think that the secret agenda of the FMLA was to discourage women from getting married and having children.