David R. Henderson  

My Review of Barbara Bergmann, Part 2

The Mellow Heuristic... My Review of Barbara Bergmann,...

Yesterday, I posted the first part of my 1987 review of the late Barbara Bergmann's book The Economic Emergence of Women. Here's the next part:

To combat discrimination against women, Bergmann would have the government step up its enforcement of the affirmative action regulations. A hard-liner on this issue, Bergmann proposes: "Each branch of each large firm should have an EEOC [Equal Employment Opportunity Commission] audit officer attached to its case, just as it has an IRS agent looking at its tax compliance."

Bergmann never considers the possibility that government intervention may itself be hampering women. Yet many of the case histories she cites point to laws and regulations that have such effects. Three examples: (1) The Bell System, heavily regulated at the time, had job classifications that segregated women; (2) the state of New Hampshire repeatedly turned down a woman applying for a certain job because she couldn't wield sledgehammers, even though they weren't used in the job; (3) women trying to get into union apprenticeship programs have had endless difficulties. For me, the most telling thing about these examples is that they involve union power, regulated industries and public-sector jobs--all of which have been shaped by government interventions.

Gary Becker explained over 30 years ago in his Economics of Discrimination why unions would be expected to discriminate. Our labor laws help them to monopolize the supply of labor in many situations, and they naturally use their monopoly power to restrict entry. If the union is largely male to begin with, women will inevitably have a tough time getting in.

Similarly, it is not surprising that an organization like the old Bell System, whose profits were regulated by the govermnent, discriminated against women. Another company could cut its costs by hiring lower-wage women into traditionally male jobs, but in Bell's case the cost savings wouldn't necessarily translate into added profits (because the regulators would typically require the saving to be passed along to consumers). In short, a regulated company has less incentive than an unregulated one to hire women.

The same is true of government agencies. Taxpayers, rather than the people running the agency, benefit when it hires equally qualified but cheaper women. So there is no cost to bureaucrats when they discriminate. A major weakness of Economic Emergence is that Bergmann, who advocates plenty of government regulation to end discrimination, seems to have no interest in policies that might remove the government props under monopoly power, or might speed up deregulation, or might work to privatize government

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CATEGORIES: Labor Market , Regulation

COMMENTS (2 to date)
Mark V Anderson writes:

To me it's pretty clear that anti-discrimination employment laws in only some cases result in in more hiring of the protected classes in the short term, and will always result in more discrimination in the long term.

1) I have hired about a dozen people in my career. I find that it would be easy to discriminate in any manner I chose, as long as I was careful. Hiring people is a rather subjective process, so one can easily come up with an excuse for not hiring a particular person, so I could easily avoid hiring a certain race or gender that way. HR pushed me hard to use subjective measures to hire employees, since any objective measure can be used by a clever lawyer to "prove" discrimination, especially in an era where disparate impact constitutes law. I found that giving tests to applicants a highly successful way to filter out the poor candidates, but HR told me I couldn't do that.

2) The fact that any supervisor can discriminate easily can be defeated if the firm is forced to have a particular number of the protected classes, whether this is an explicit quota, or constitutes indirect evidence of discrimination. But in that case, the firm will purposefully hire these minority candidates that would not otherwise be hired, which sets them up as special cases in the company. Such hirees will be herded into unimportant areas of the firm where they can't do too much damage. Seeing these worthless employees will likely increase prejudice even amongst those that didn't previously harbor any such prejudice.

In practice, most firms do little of the above explicit quota hiring, but everyone knows of the pressure to hire minorities and women, as well as pressure to move a certain number of them into positions labeled management. Also in practice, there are always a number of highly competent minorities and women in any large firm, but they will always labor under the suspicion that they advanced due to the quota system.

Hazel Meade writes:

Another point worth noting:
Minimum wage laws may enable discrimination by preventing workers in socially disfavored groups from undercutting wages of white workers.

For instance, if an employer has to pay the black worker and the white worker the same wage, even a slightly prejudiced employer is likely to opt for the white worker, all else being equal.

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