Bài giảng Economics - Chapter 29 Race and Affirmative Action

Chapter 29Race and Affirmative ActionChapter OutlineMEASURES OF INEQUALITY, AND DEFINITIONS AND DETECTION OF DISCRIMINATIONDISCRIMINATION IN LABOR, CONSUMPTION AND LENDINGAFFIRMATIVE ACTIONMeasures of Social and Economic ConditionsAfrican-American family income is rising.The relative position of African-American family income to white family income has risen slowly.Rates of poverty and unemployment are much higher for African-Americans than whites.More African-American men are in prison than in college.What is DiscriminationDisparate Treatment Discrimination treating two otherwise equal people differently on the basis of raceAdverse Impact Discrimination doing something that is not necessarily discriminatory on its face but that impacts some groups more negatively than othersRational or Statistical Discrimination discrimination that is based on sound statistical evidence and is consistent with profit maximizationMeasuring and Detecting DiscriminationRegression techniquesStatistical methods which seek to determine if the differences in treatment for whites and blacks could have happened by random chance.Auditing techniquesSending paid actors into a situation to determine if people with identical economic characteristics are treated differently based on race.Labor Market Discrimination in the PastModeling Labor Market DiscriminationLabor market for jobsonly whites are allowed do.WageSNDDwNDLabor market for jobs that blacks who work must do.WageSNDDSDSDwwhitewblackWhy Competition Would Eliminate Discriminatory PayBusinesses that hired only whites at the higher wage would have higher costs than businesses that did not discriminate.Businesses that did not discriminate could lower their prices and take the market share of those firms that did discriminate.As this happened firms would see that discrimination was not consistent with maximizing profits and would stop discriminating.Why Competition Would Not Necessarily Eliminate DiscriminationIn industries where there is economic profit, firm owners may continue to discriminate and consider it a price they are willing to pay so as to not employ blacks.In industries in which the customer chooses which business to patronize based on race, firms may be willing to discriminate because their profit maximizing interest and discrimination are consistent. Consumption Market DiscriminationBlacks pay more for cars.Blacks are shown fewer homes and those homes are in already integrated neighborhoods.Blacks are more likely to be turned down for a mortgage loan.Affirmative ActionAffirmative Action : any policy that is taken to speed up the process of achieving equalityHistory of Affirmative Action But freedom is not enough. You do not wipe away the scars of centuries by saying: Now you are free to go where you want, do as you desire, and choose the leaders you please.You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, “You are free to compete with all the others,” and still justly believe that you have been completely fair.Thus it is not enough to just open the gates of opportunity. All our citizens must have the ability to walk through those gates.Lyndon Johnson, 1965 at Howard UniversityMore HistoryNixon’s Executive order 11246 mandated affirmative action in contracts with the federal government.Set-asides were created so that 10% of all federal highway contracts were “set aside” for minority owned contractors.Various Supreme Court rulings have limited the scope with which affirmative action can be employed. It must now meet a high standard of “strict scrutiny.” The Civil Rights Act of 1964 vs. the California Civil Rights InitiativeCivil Rights Act 1964The state shall not discriminate against any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.California Civil Rights InitiativeThe state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting. Gradations of Affirmative ActionAn equal opportunity to applyRequires employers to advertise in minority-seen outlets .Race as a tie-breakerRace may break a tie between equally situated candidates.Acceptance of all qualified minoritiesUsed most often in university admissions to selective schools. A standard is set and qualified minorities are admitted and the remaining spots are filled with the best of the non-minority pool.Guidelines Targets are set for minority hiring and promotion and, if they are not met, a justification must be given.QuotasStrict percentages of minorities must be hired. This is generally unconstitutional unless ordered by a court to remedy past discrimination.