Discrimination and Disparities

by Thomas Sowell

“Disparate Impact” in Employment

a case charging the Sears department store chain with sex discrimination cost the company $20 million in legal fees95 and took 15 years to resolve through the federal courts—without the government having to produce even one woman, from any of Sears’ hundreds of department stores around the country, claiming to have been discriminated against.

Most employers, including large corporations, find it expedient to settle such cases out of court, even when they have not violated anti-discrimination laws—and the number of such settlements is then used by critics to claim that employment discrimination is widespread.

the outcome of “disparate impact” cases does not necessarily depend on either the quantity or the quality of the evidence.

Employers therefore have incentives to locate their businesses away from concentrations of minority populations, so that they will not be as legally vulnerable to costly charges of discrimination

Some Japanese firms seeking to find locations for their first businesses in the United States have specified that they do not want to locate near concentrations of blacks in the local population.

even when the numbers are correct, the words that describe what the numbers are measuring may be incorrect or misleading.

While the rejection rate for white applicants was 22.3 percent, the rejection rate for Asian Americans and Native Hawaiians was 12.4 percent.

In short, the three groups’ respective rankings in terms of the kinds of mortgage loans they could get was similar to their respective rankings in average credit ratings.

But in fact black-owned banks turned down black applicants for home mortgage loans at a higher rate than did white-owned banks.

Household income data, for example, are often used to indicate the magnitude of economic disparities in a society. But to say that the top 20 percent of households have X times as much income as the bottom 20 percent of households exaggerates the disparity between flesh-and-blood human beings, which can be quite different from disparities between income brackets. That is because, despite equal numbers of households in each 20 percent, there are far more people in the top 20 percent of households.

Most households in the bottom quintile have no one working.

A University of Michigan study that followed a given set of working Americans from 1975 to 1991 found that 95 percent of the people initially in the bottom 20 percent were no longer there at the end of that period. Moreover, 29 percent of those initially in the bottom quintile rose all the way to the top quintile, while only 5 percent still remained in the bottom 20 percent.11 Since 5 percent of 20 percent is one percent, only one percent of the total population sampled constituted “the poor” throughout the years studied. Statements about how the income of “the poor” fared during those years would apply only to that one percent of the people.

Calling people in particular income brackets “the poor” or “the rich” implicitly assumes that they are enduring residents in those brackets, when in fact most Americans do not stay in the same income quintile from one decade to the next.

National Basketball Association (NBA) referees were racially biased, because the proportion of fouls that referees call against black players in the NBA greatly exceeds

As a professor of criminology explained: “Good statisticians were throwing up their hands and saying, ‘This is one battle you’ll never win. I don’t want to be called a racist.’”23

Treating the incomes earned by some individuals over various numbers of years as being the same as incomes earned by other individuals in just one year is like failing to distinguish apples from oranges.

low annual incomes are far more likely to be salaries or wages, and very high annual incomes are far more likely to be capital gains.

Internal Revenue Service data show that half the people who earned over a million dollars a year, at some time during the years from 1999 through 2007, did so just once in those nine years.

It is a similar story as regards the 400 richest people in the world, who had net losses of $19 billion in 2015.

Despite Professor Wilson’s reliance on opinion surveys to refute claims that ghetto residents have different cultural values from those of the American population as a whole, there is no necessary correlation between what people say and what they do.

what people do reveals what their values are, better than what they say.

black students in affluent Shaker Heights spent less time on their school work than their white high school classmates did, and spent more time watching television,38 that was their revealed preference.

In Australia, for example, Chinese students spent more than twice as much time on their homework as white students did.

Statistics compiled from what people express verbally may be worse than useless, if they lead to a belief that such numbers convey a reality that can be relied on for serious decision-making about social policies.

most of what are called “the poor” are not permanent residents in low-income brackets, any more than other people are permanent residents in other income

About half of all Americans earning at or near the minimum wage rate are from 16 to 24 years of age,49 and of course they do not remain young permanently.

you can only survey survivors. And what may be true of survivors need not be true of others in the same circumstances who did not survive in those particular circumstances.

A study published by the National Bureau of Economic Research measured employment by hours of work, as well as by the number of workers employed, and concluded that “the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.”60

Such misconceptions are not peculiar to Professor Piketty. Nor are these the only problems with his statistics. But that such simple and obvious misstatements can pass muster in intellectual circles is a problem and a danger

despite the high poverty rate among black Americans in general, the poverty rate among black married couples has been less than 10 percent every year since 1994.2

The crucial question is not whether evils exist but whether the evils of the past or present are automatically the cause of major economic, educational and other social disparities today.

Despite a high rate of poverty in ghetto neighborhoods throughout the first half of the twentieth century, rates of inner-city joblessness, teenage pregnancy, out-of-wedlock births, female-headed families, welfare dependency, and serious crime were significantly lower than in later years and did not reach catastrophic proportions until the mid-1970s.

“Balkanization” was replaced by the much nicer-sounding word “diversity,” from which all sorts of wonderful benefits have been assumed and incessantly proclaimed, without any empirical test of those claims.

The actual track record of promoting separate group identities, whether called “Balkanization” or “diversity,” has been appalling, in countries around the world.

Not only the society in general, but lagging groups in particular, can benefit from knowing what is true, as distinguished from what is currently in vogue. Not only does the truth offer a clearer path to advancement, the breakdown of law and order brought on by constantly stirred bitter resentments almost invariably leads to more suffering among the less fortunate.

It has become increasingly common to refer to achievement as “privilege” throughout the American educational system, where crusades against “white privilege” abound, along with demands for statistical parity based on demographic representation rather than individual productivity.

Worse yet, children who are currently being raised with the kinds of values, discipline and work habits that are likely to make them valuable contributors to society, and a source of pride to themselves and to those who raised them, are called “privileged,”

Mobility is an ex ante concept, independent of whether movement is actually taking place ex post.

How much movement takes place does not tell us how much mobility there is.

Instead, it often leads to simply redefining violence.

large and such consequential changes in the lives of millions of Americans as the 1920s.

Calvin Coolidge, who was President of the United States for just over half of the decade of the 1920s, was widely excoriated and/or ridiculed in later histories.

An economic study of the Great Depression in a leading scholarly journal in 2004 concluded that the effects of government policies had prolonged the Great Depression by several years.

Among the impediments to clearly seeing that world of reality are not only the redefining of words, but also twisting other people’s words and meanings—extending in some cases to attributing to people things the direct opposite of what they actually said.

The first and most important thing to understand about the “trickle-down” theory is that there is no such theory.

Fictitious Villains

Mellon reassured the country, would ultimately trickle down to the middle- and lower-income groups in the form of salaries and wages.”79 There was neither a quotation nor a citation of any statement in which Secretary Mellon actually made this argument, even

What happened to Mellon and Moynihan, among others in the past, continues to happen to those who deviate from the prevailing vision in the present. Among the prime targets today is Charles Murray, whose many books on social issues have led to attempts to prevent his speaking on college campuses to students who invited him.

The word “bootstraps,” like the word “trickle-down,” is almost invariably attributed to somebody else,