Prejudice is inefficient and often hurts the people with the prejudices — sometimes as much or more than their targets.

Inequality due to discrimination is inefficient and can even hurt the people at the top. For example, the slave states were economically backward and although the white elites were rich, they weren’t growing the size of their economy as much as the elites in the northern states who got even richer because the northern states had more efficient economies because they weren’t basing their society on slavery. The reduction of discrimination is definitely more efficient and that can benefit everyone. Jim Tankersley:

In 1960, cutting-edge research from economists at the University of Chicago and Stanford University has documented, more than half of Black men in America worked as janitors, freight handlers or something similar. Only 2 percent of women and Black men worked in what economists call “high-skill” jobs that pay high wages, like engineering or law. Ninety-four percent of doctors in the United States were white men.

That disparity was by design. It protected white male elites. Everyone else was barred entry to top professions by overt discrimination, inequality of schooling, social convention and, often, the law itself…

The Chicago and Stanford economists calculated that the simple, radical act of reducing discrimination against those groups was responsible for more than 40 percent of the country’s per-worker economic growth after 1960. It’s the reason the country could sustain rapid growth with low unemployment, yielding rising wages for everyone, including white men without college degrees…

A recent and devastating study is co-authored by a University of Tennessee economic historian, Marianne Wanamaker, who served a year in the White House on President Trump’s Council of Economic Advisers. She and a co-worker went back to Reconstruction and measured how much easier it was for the sons of poor white men to climb the economic ladder than the sons of poor Black men.

In terms of economic mobility, they found, the penalty for being born Black is the same today as it was in the 1870s…

If America can once again tear down barriers to advancement, it can tap a geyser of entrepreneurship, productivity and talent, which could by itself produce the strong growth and low unemployment that historically drive up wages for the working class, including working-class white men…

All Americans have a stake in the protests for equality they see every night on the news…

Jim Tankersley… is the author of “The Riches of This Land: The Untold, True Story of America’s Middle Class,” from which this essay is adapted.

For another example, most economists think that higher immigration would help the group most opposed to it: white working class Americans. Immigrants reduce the prices that Americans have to pay for most stuff (although not rents) and even low-skilled immigrants increase demand for native born workers to perform higher-paid jobs as supervisors and salespeople.

The group that has the most to lose economically from additional immigration are the immigrants that are already present because new immigrants have job skills that are close to perfect substitutes for the previous immigrants and it is much more likely that their wages will suffer than anyone in the native-born population who are more likely to gain economically.

Posted in Discrimination, Inequality

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