Labor Discrimination - Assignment Example

1. How can market competition help reduce discriminatory practices by employers in the labor market? [10 pts.] Employers with a “taste for discrimination” will more likely forego profit-making goal of their business in favor of employing a particular type of worker. For instance, employers with a taste of discrimination against women will employ less than the profit-maximizing number of women. As an alternative, they will recruit a higher number of men whose wage bill/salary stand far above that of women despite having a similar skill level.

Consequently, in a perfectly competitive market, non-discriminating employers will certainly gain a cost advantage and eventually drive out discriminating employers from the market. In other words, as competition increases in the market, the cost of labor becomes of essence. Considering that the discriminatory employers would go for particular employees who necessarily do not guarantee the least cost of labor, the result is that their business is likely to have higher labor costs as compared to businesses of non-discriminatory employers.

Eventually, labor discrimination will decline as business which discriminate find it hard to operate in a competitive market where cost of labor plays a critical role.2. Give and explain two situations in which employer discrimination may continue to exist in the labor market despite efforts to break down berries and introduce competition. [10 pts.] Employer discrimination may still persist despite efforts to break down barriers and introduce competition for two main reasons. First, it is almost impractical to create perfectly competitive markets.

This is based evidenced by the decade long continuity of labor market discrimination in high-income countries. As regards to developing counties, monopolistic power is quite of the essence, which permits indulgence in market discrimination. Secondly, even though competition lives on in virtually all markets, it is not by itself a sufficient reason for the elimination of discrimination. Therefore, market discrimination in a competitive market will still exist as long as all the employers have a taste for discrimination.