Good interview here with Thomas Sowell on Discrimination - he looks at it from an economic point of view.
thefederalist.com/2019/06/13/an-interview-with-thomas-sowell-on-discrimination-race-and-social-justice/Hogberg: Now, regarding the practice of discrimination, in your book you note that even if, say, employers are racist and they want to discriminate in their hiring practices, there are often powerful forces that may prevent them from doing so. Can you explain?
Sowell: It depends on the context. If, for example, it is an industry operating in a labor market in which there is a chronic surplus of qualified job applicants, then it costs the employer nothing to turn away qualified applicants from groups he doesn’t like and instead hire people from groups he does like that are still qualified.
But you seldom have that in a free market because wages adjust over time. You may have temporary surpluses or shortages, but those things tend to self-correct. It is when you have something like the minimum wage law, where you raise the wage rate above where it would be in a free market. Therefore, you increase the amount of workers available to the industry but you reduce the quantity of workers that employers demand because labor is now more expensive. And so you create a chronic surplus of labor.
I go into detail about the minimum wage in the book. And what is fascinating to me is to look back to 1948, when, for all practical purposes, the minimum wage law didn’t apply because inflation had made all wages above what was specified in the law. At that time not only was unemployment as a whole a fraction of what it is today, there was no difference between the unemployment rate of black teenagers and white teenagers. Today that seems almost impossible to believe.
It’s only later on, when politicians started increasing the minimum wage to keep up with inflation and so on, that’s when the total unemployment of teenagers in general became some multiple of what it was in 1948. And that’s when a gap opened up between the unemployment rate of black teenagers and white teenagers.
So, the increase in unemployment among black teenagers was not due to racism, which was at least as great in 1948 as it is today. Rather, the cost of discrimination to the discriminator had changed. You lowered the cost of discrimination. As you would expect, you lower the cost and more is demanded.
Hogberg: There were even costs to discrimination in South Africa, correct?
Sowell: Even in South Africa. That was the classic case. And I use that example in the book instead of getting bogged down in these questions about how much racism exists and so forth. I deliberately picked the country where there is no question at all about the racism of the people in control of the country. Which is to say that the whites had openly proclaimed white supremacy. And yet in South Africa, there were occupations where the black workers outnumbered the white workers even though it was illegal to hire any black workers in that occupation. And this was not due to the white employers having different social views. Rather, the cost to them of not hiring blacks was just too high.
If I may, just the other day I came across an article about how employers setting up new factories in the United States have been deliberately locating those factories away from concentrations of black populations because they find it costlier to hire blacks than to hire whites with the same qualifications. The reason is that the way civil rights laws are interpreted, it is so easy to start a discrimination lawsuit which can go on for years and cost millions of dollars regardless of the outcome.
It makes no sense from a business standpoint to hire a black worker if a white worker can be hired with the same qualifications who can’t start a lawsuit. So what this suggests is that when you give some people special rights, those special rights have special costs, not only to other people but to the people with special rights.
Hogberg: Related to discrimination, you have a section where you note that Harlem, which was predominately white in the early 20th century, was less hostile toward blacks when it came to providing housing that blacks could afford than San Francisco is today. Please explain.
Sowell: The landlords of Harlem weren’t less hostile toward blacks, they were more hostile. The realtors and building owners were assuring the white tenants that they were not going to let any blacks move into Harlem and, thus, there was no reason for their tenants to leave. Well, as it turned out that was a bad prediction. And my point is the reason it failed was the cost to the discriminators.
Now, if every single realtor in Harlem had stood firm on not letting blacks into Harlem, then Harlem might not be black today. But even racists, who prefer one race to another by definition, tend to prefer themselves most of all. So if a landlord has a building where he is having trouble finding tenants at the prices he wants to charge, but he can find blacks willing to pay those prices, then he is not going to pass up that money. Most people would not. And once that process starts, it becomes costlier and costlier for the holdouts among landlords and realtors to continue holding out.
Now, in San Francisco, they have restricted the supply of housing by restricting the building of housing. And there is no cost—people who already own houses or apartment buildings can easily vote to restrict the building of more housing. That causes the price of existing housing to go up. So, by 2005, the number of blacks living in San Francisco was less than half of what it had been in 1970 even though the total population of the city had increased. And that’s because more and more blacks were priced out of the housing market and forced economically to leave San Francisco.
So I doubt there was anywhere near the amount of hostility toward blacks in San Francisco in the late 20th century as there was toward blacks in Harlem one hundred years earlier. But where the cost of discrimination was low, people discriminated and where it was high they had to give it up.