Monday, September 06, 2004

Irrational Discrimination

A libertarian theory as to anti-discrimination laws is that they are unnecessary, because the market should in theory bid wages up to equality. (I.e., if an employer could get by with hiring blacks or women for 75 cents on the dollar, some would try to do so; then others would bid up the wages to 80 cents on the dollar, and so forth.)

The following passage tells us something about whether this theoretical argument is empirically accurate:
James D. Anderson, The Education of Blacks in the South, 1860-1935 (University of North Carolina Press, 1988), pp. 233-34:

In Atlanta, Georgia, as in many other places throughout the urban South, the economically rational principle of hiring the best-qualified workers at the cheapest wage was stood on its head. Atlanta's Sanitary Department discharged all of its black truck drivers and replaced them with white drivers. The experienced black drivers had been paid $60 per month; the new white drivers were hired at a minimum wage of $100 per month. Moreover, some of the displaced black workers were then rehired as helpers to the white drivers and paid $50 per month. Such patterns were consistent with the Chamber of Commerce's campaign to boost Atlanta as a haven for "satisfied, intelligent, contented Anglo-Saxon labor." The Jacob Drug Company, a chain of 120 stores in Atlanta, had for thirty years employed black youth as messengers. On 15 July 1929, however, the 230 black messengers were discharged and the white youth hired to take their places were given an increase in pay of $3 per week, plus a regulation uniform. Similarly, between 1919 and 1929, black truck drivers for the Hormel Company, Swift Company, Cudahy Packing Company, Wilson and Company, and White Provision Company were replaced by white drivers. The Georgia Baptist Hospital, one of the South's largest private hospitals, discharges its entire black work force and gave an increase in pay to the new white workers. The white patients, however, complained about the inexperience and inefficiency of the white workers and, after two months of trial and error, the black workers were called back. The black workers were given the same salary as before they were discharged even though the whites who replaced them were paid more during their short tenure.


Anonymous Anonymous said...

This is, of course, certainly connected to why the South was so, so much poorer than the rest of the country. It is possible to discriminate in such a way, if you're willing to do it and live with the consequences of making everybody worse off in the long run. Compliant government, unions, and chamber of commerces making sure that nobody "cheats" help too.

Even so, it quickly becomes unsustainable when a sufficient portion of the populace rebels, caring more about money than color of the skin.

7:29 PM  
Blogger Balfegor said...

Part of it may be the consumer market involved as well. In the same way that, even though animal testing is probably the cheapest way to test for intrinsic safeness of a chemical product, consumers sometimes concertedly reject that product because it is connected to animal testing, it may be that consumers in the South drove those hiring patterns, because extrinsic social values like not having Blacks involved in producing your goods were valued sufficiently to overcome pricing and intrinsic quality disadvantages from not using the best available labour. I think there were odd hygiene taboos or something like that with segregationist Whites in the South, weren't there--blacks as "unclean"? Leastways, it sounds plausible enough to me. And a perception of dirtiness or defilement might be enough to shape consumer preferences in the above-described direction. Of course, it would work both ways, too. The suppliers of goods would probably have the same or similar sensibilities, so the two pressures on hiring decisions would be mutually reinforcing.

10:29 PM  
Blogger Tim McNabb said...

These still seem to be a collection of anecdote, although in the South of that era, I'd not be suprised if these sorts of actions were statistically representative.

Any notion just how widespread this racial socialism was?

Tim McNabb

2:52 PM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home