Labor market discrimination Gender and Racial based - Essay Example

?Introduction As human rights and gender equality improve, women and minorities are more likely to play an important role in the development process and labor market now, compared to fifty years ago. After the 2nd World War, large numbers of women and minorities entered the labor market and struggled for their rights. Struggle against labor market discrimination based on race, sex, language, religion and age has become the heart of the civil rights movement. However, female and minority workers still face discrimination in the labor market as they are still treated differently in terms of wages and employment opportunities. Discrimination refers to distinction, restriction, differential treatment or exclusion which makes a person or a group in position of disadvantage when compared to others who are in similar circumstances or situations. Discrimination is part and parcel of social life and it is impossible to find any aspect of social life without discrimination. There are several types of discrimination and these include race, religion, age, ethnicity, gender, sex, language and disability (United Nations Economic and Social Council, 2009).. Basically, discrimination manifests itself through prejudices advanced against or in favor of another person, depending on the reasons stated above. The occurrence of prejudice normally refers to rejection of a person because the person belongs to discriminated group. Discrimination is also a matter of attitude among those who either practice it or become a victim to it. Since discrimination is something that is highly dependent on one’s attitude, it ought to be considered in terms of both the one who is discriminated against and the one who is doing the discrimination. Though different types of discrimination exist all over the world with differences in intensity and magnitude, racial and gender discriminations are more widely and universally present. Racial discrimination refers to the difference shown to individuals on the basis of real and perceived racial difference while gender discrimination is due to difference in the sex. This difference is because of the assigned gender roles, prejudices and social construction. Despite intense efforts have been taken to eliminate these discriminations, racial and gender intolerance appears to be every bit of the societies and hence, it is interesting to review the causes and effects of these discriminations on labor market based on the earlier studies. Review of literature on prevalence, causes and effects of gender and racial discrimination in the labor market are discussed in the following sections. Prevalence of Racial and Gender based Discrimination in the Labor Market Large number of studies reveals that there is intensive racial discrimination in the US labor market. This kind of discrimination is essentially occurs through allocation of disadvanges and privileges depending on the color of one’s skin, or in other words, it is called as ‘colorism’(Hersch 2008). Racial discrimination is found across the job market, both in the industries; field as well as in the domestic chores. According to Ingram (2008), racial discrimination also manifests itself in the labor market through house hold chores. He argues that the time spent for attending the household chores should be considered as labor hours. He also presents evidence to the effect that US Blacks as well as non-white couples (heterosexual) tend to be discriminated against by being given extra workload in the house. The study is the evidence of pre-labor market discrimination as the labor for household chores is more discussed in it. As with racial discrimination in the market, there are a quite a number of empirical studies which shows the existence and effects of gender based discrimination in the labor market. Gender based discrimination is predominant in the domestic labor market with women normally working overtime and extra hours (Banton, 1998). Studies have also attempted to identify forms in which discrimination occurs. Along to Banton (1998), gender or racial discrimination may be direct or indirect. He explains that direct discrimination occurs in a situation in which two people or groups of people with similar job qualifications or identical skills are treated differently in terms of wages or workload. On the other hand, indirect discrimination is the advantage/ disadvantage earned in some fields such as difference in the job time and job opportunities. Banton’s classification tends to treat some labor market incentives as discrimination. For example, employees get high salary, after working for a long period. This offers a basic tool to study the causes and effect of labor market discrimination. Discrimination even occurs in the pre-labor period which means that discrimination in the labor market occurs before one gets employed into the labor market rather than after one has entered the labor market. The pre-labor market becomes essential as it serves as a barrier to one’s access to the labor market. For example, a person barred from market entry for reasons of color may never have the opportunity to get labor benefits. Pre-labor market may also cause the lack of chance of some labor to enter the labor market. To be general, labor market discrimination can be divided into two categories: wage discrimination and occupational discrimination or segregation. Wage discrimination often occurs when two employees with identical skills receive different wages from the employer. Occupational segregation refers to the discrimination based on the demographic characteristics like sex or age, of the labor in the market. For example, men hold dominant position in some occupations such as sailor and fire fighter. Discrimination occurs not only in terms of wages but also the opportunity to expand skills and also rewards that a worker gains due the specific skills. For example, employers tend to prefer giving higher positions to men rather than women. This has led to lack of opportunities for women to carry higher position in career and also get higher pay. Most of the time, women are neither rewarded nor given the opportunity to expand their skills. The causes of Labor Market Discrimination Based on Gender and Race Various theories and empirical studies have attempted to find out the causes of discrimination including racial and gender based discrimination in the labor market. According Tajfel (1971), discrimination in the labor market can be explained using social identity theory. According to this theory, individuals may have favor to those who are included in the same group. For example, if the recruitment team is composed of women, they will tend to discriminate against men to the advantage of women. Similarly, when the panel is predominantly of a particular color, then they have a tendency to favor those of their color in the job market and to discriminate against those who are not of their color. This can be true in those countries with a diversity of ethnic groups. Another theoretical account of the cause of discrimination in the labor market has been offered by Becker (1957), in terms of taste. In this view, Becker explains that discrimination could be a taste of employers, employees or customers in the market. For example, an employer may have distaste for a certain category of employees and thus make an attempt to avoid that particular group. If an employer who has distaste for women, even a women has higher abilities and skills for that particular job compared to men, still the employer is likely to reject her capabilities and she is under paid. This underpay is not because of the profit maximization motive of the employer, but because of the distaste for women. Likewise, an employer who has a distaste for a particular color will avoid employing people of that color. Generally, discrimination may be said to be discriminative, and thus to this extend, Becker could have been right. Phelps (1972) has also come out with statistical discrimination theory. According to this view, employers do proceed in their decisions by group generalization, rather than considering individual applicants. He explained that potential employers have no clue on individual ability and they can not make judgment in isolation; in any case, the process of carrying out an inquiry will be costly to the employer. Another cause of this discrimination is labor market segregation, where women and men are grouped differently in occupations according to the different economic strata they are comprised of. The groupings are being stereotyped based on the assumption that men, women or different ethnic group have particular strengths and capabilities. The unequal wage distribution among the gender and ethnic groups is justified by this assumption. Stereo tying is therefore another cause for gender and race inequality in the labor market. Stereotype tendencies indicate that some jobs are only suitable for a particular gender and those applying for those occupations are subject to judgment because of their gender. For example, the construction industry always employs men rather than women. This is not because of the distaste factor, but just because of the preference of this particular industry. This theory can also apply to those racially based industries such as transportation and retail trade during the year 1993-1997. Historical and cultural issues are the other factors that caused discrimination in the labor market. For example, in the United States, non-white groups and women have a lower average education level than whites and men. This difference in educational level has widened the gap between the earnings of men and women and between whites and non-whites. Besides, cultural issues also play an important role in labor market discrimination as traditional values, especially those in Asian countries, always insist that women hold higher household responsibility and hence, single women are preferred to the married women in the labor market. When women leave their occupations to bring up children, their absence from the field decreases their abilities and human capital, their careers are halted or discontinued. This further leads to an increased gap in earning between the genders. The Effects on the Labor Market due to Gender and Race Hombres and Arcand (2003) try to point out the existence of pervasive racial discrimination in Brazil, which is the ‘dark handicap’ to the social advancement of the country. The study attempts to quantify the impact of racial and ethnic discrimination in Brazilian labor market by using advanced quantification methodologies like Oaxaca decomposition methodology. The discrimination results in wage and employment gaps and occupational segregation in Brazil. The existence of intra-racial differences in the labor market is found to be heterogeneous. Based on the taste preference theories, occupational exclusion and theories of Statistical discrimination, Altonji and Blank (1999) provides direct evidence of labor market discriminations based on gender and race, which is beyond “unexplained gaps” especially in wage and employment gaps. The study reveals that the pre market human capital differences (like educational differences and gaps in family background) are strengthened by the racial and gender differences. These pre- market discriminations will lead to its subsequent differences in the labor market also. The role of occupational characteristics in the gender wage differentials and differences in the fringe benefits by gender are analyzed in the study. The impact of these pre-market and labor market discriminations on the labor productivity has been analyzed. Wage gap is the most important direct result of racial and gender gaps in labor market and racial impact on the diverging tendency of the wage gap is seen among females and among Hispanic/ Whites. the widening wage gap is crucial in the sense that some urgent policy interventions including Anti-discrimination Act are relevant. Discrimination against women has resulted to limited opportunities, reduced salaries and a blurred future which lead to look for work across borders, leading to a decrease in women labor (Smith and Finis, 1989). It is easy to show discrimination due to the demand-supply disequilibrium in the labor market. As a result of this discrimination, women are forced to move across borders to get employment. As in this case, the supply of women labor in the domestic labor market and bid the price of female labor up and caused an increase in the firm’s cost. This is a result of discrimination and it caused the economic inefficiency due to the misallocation of resources. Discrimination against women and minorities has also caused serious social issues. When prospects of career and economic growth diminish due to racial or gender discrimination in the labor market, there is always an increase in criminal activities leading to further economic instability due to insecurity. Discrimination in the work place, whether it is gender based or racial, has led to psychologically imbalanced states. This inequality has led people to adjust their aspirations in order to get back their psychological balance. This attained psychological balance can be seen as one distances himself or herself from work. Racial discrimination also leads to psychological problems such as depression and low self-esteem and this again leads to decline of their productivity. When people feel that they are being discriminated against racially, they tend to exhibit violent behaviors. Hence, it is related to the increase in violent attributes especially among African American youth. Gender and race based discrimination has led to men earning more than women in business and led to the income gap between groups. This means that there is great gap in wealth distribution among the gender and groups, and thus, women and minorities are to be satisfied themselves with having low economic power. Besides, the ability to make strong financial decisions or investments to women seems to be low because of this low economic power. This impact could be worse if there is a lack of government intervention, appropriate laws or policies, to fight against gender and racial discrimination. Hersh (2008) makes an attempt to assess racial discrimination. He argues that when one race is seen to have more comparable worth than the other, the discriminated race ends up with a low pay. For example, in the United States, immigrants have been widely affected by this as they end up doing low paying occupations. The impact is that aggression and tension are built up among those who perceive that they are being discriminated against. This has again led to general low market wages for immigrant workers, most of whom are black. A further effect of this is to create gaps between the races in terms of wealth distribution, with the discriminated against race remaining poor while the favored get wealthier from the rewards of the labor market and this situation leads to the conflicts and disharmony between races. The Indonesian Chinese massacre during 1998 is one of the examples of the consequences of this type of racial discrimination and unequal wealth discrimination among two races. Mykerezi and et al (1982) point out that the perceived racial discrimination in the labor market has subsequent criminal activity among the young African Americans. The racial discrimination in the labor market led to the increase in the intensity and incidence of property crimes among this particular group. The decreasing opportunities due to the labor market discrimination affect many aspects of behavior and habits of the youth, including participation in the antisocial activities. The perceived labor market discriminations would reduce the returns to legal employment which make the crime become attractive to the Youth. The discrimination seems to have no impact on the violent crimes for men or on crime in general for women. That is, the gender aspects of the perceived discrimination appear to be more or less irrelevant. As there hardly exists any effect on the violent crimes, the perceived discriminations breed the increasing number of violence by altering the market incentives and the property crimes have become more attractive, compared to the expensive market. Conclusion Racial and gender discrimination manifests itself through prejudices advanced against or in favor of another person, based on gender or race. A number of empirical studies support the fact that there exist gender and racial based discriminations in the labor market. This may be before the market entry or thereafter, at the group level or individually. Discrimination may be because of different reasons such as historical issues, culture, attitude, employer or employees taste. The effects of racial and gender discrimination may be varied including reduced production, labor segregation, lower earnings, and low labor productivity and so on. It is shocking that in many parts of the world, the resulted gaps are diverging when men and women of different races are considered. Market stakeholders need to make efforts to counter this unfortunate situation that could impact the market negatively. Government intervention can help in labor market discrimination by implementing policies against discrimination in the labor market in order to control or narrow the gap between different groups of people. Reference Altonji, Joseph, G and Blank, Rebecca, M. (1999). Race and Gender in the Labor Market. In Ashenfelter and Card, D (eds). Handbook of Labor Economics. Volume 3c. Elsevier Science B.V, 3144-3259 Hombres, D Beatrice and Jean Louis Arcand (2004). Racial Discrimination in the Brazilian Labor Market: Wage, Employment and Segregation Effects. Journal of International Development, John Wiley & Sons, Ltd, Vol 16(8), 1053-1066. Mykerezi, Elton, Monika Marko and Stephen Aultman (1982). The Impact of Perceived Race Discrimination in the Labor Market on the Criminal Activity of African Youth. www.stcloudstate.edu/economics/documents/Perceived_Discrimination_crime_mykerezi.pdf United Nations Economic and Social Council (2009). www2.ohchr.org/English/bodies/cescr/docs/gc/E.C.12.GC.20.doc Read More