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Who Benefits from Racism? The Distribution among Whites of Gains and Losses from Racial Inequality

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  • Michael Reich

Abstract

Most neoclassical investigations argue that racial discrimination hurts employers and benefits white workers; however, these distributional hypotheses have not been tested empirically. This article argues that, no matter how racial inequality is produced, and whether or not capitalists individually or collectively practice discrimination, racial inequality benefits capitalists and hurts white workers, by weakening workers' solidarity and bargaining strength. The article presents several tests of this bargaining-power hypothesis. The empirical results support this hypothesis and are inconsistent with prominent neoclassical discrimination models.

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  • Michael Reich, 1978. "Who Benefits from Racism? The Distribution among Whites of Gains and Losses from Racial Inequality," Journal of Human Resources, University of Wisconsin Press, vol. 13(4), pages 524-544.
  • Handle: RePEc:uwp:jhriss:v:13:y:1978:i:4:p:524-544
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    Cited by:

    1. B. T. Hirsch & D. A. Macpherson, "undated". "Wages, racial composition, and quality sorting in labor markets," Institute for Research on Poverty Discussion Papers 1038-94, University of Wisconsin Institute for Research on Poverty.
    2. Wursten, Jesse & Reich, Michael, 2021. "Racial Inequality and Minimum Wages in Frictional Labor Markets," Institute for Research on Labor and Employment, Working Paper Series qt01n6g4dz, Institute of Industrial Relations, UC Berkeley.

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