Economic Theory Of Statistical Discrimination As It Relates To The Workplace Essay Samples

Business

Brief on Statistical Discrimination
Unlike discrimination based on race, color or sexual orientation, the concept of statistical discrimination is more complex. Statistical discrimination occurs when employers make rational decisions for maximizing output based on ‘empirically informed assessments of productivity and risk’. At times, such assessments may be based on common knowledge or rules of thumb. For instance, insurers might charge higher premiums from young males because of studies by actuarial scientists that determine that more claims are received from young males. While the information may have been empirically arrived at, the net result is that young males become forced to pay more for insurance because a certain percentage of their group would be proffering insurance claims. Similarly, employers may reject job applicants from inner cities based on ‘common knowledge’ that graduates from inner cities lack in grammar skills. However, such routine rejection by employers might actually harm the chances of otherwise bright and grammatically articulate young people from inner city colleges. Such discrimination, based on empirical assessments and common knowledge, is called statistical discrimination (Baumle & Fossett, 2005, p. 1252).

Comparison of Statistical Discrimination vis a vis Theory of Unconscious Bias

Human beings have a natural psychological process of categorizing like objects together. These psychological tendencies to club things together in turn lead to cognitive biases, which result in reliance on stereotypes. Reliance on stereotypes created due to inherent cognitive biases may then operate without the conscious volition of the human being. As a result, people might inherently possess biases against groups of people. For instance, employers may have an unconscious bias against women or people of colored origin due to stereotyping (Lee, 2005).
The difference between statistical discrimination and unconscious bias lies in the manner in which discrimination occurs. While statistical discrimination occurs due to empirical assessments that tend to put some people at a disadvantage, unconscious bias occurs due to cognitive processes that remain hidden from the consciousness of the person who performs the discrimination. While statistical discrimination may be pointed out to a person and reasoned against, unconscious bias would be more difficult for the perpetrator to accept, as the bias is not acted upon in a rational and conscious frame of mind. Seen in this light, unconscious bias is more insidious than statistical discrimination.

Need for Anti-Discrimination Laws Against Statistical Discrimination and Unconscious Bias

There are a large number of laws at the federal and state level laying down rules against discrimination of all forms. All employers would, at some level, attempt to minimize risk and increase productivity. Statistics are a handy tool to minimize risk. However, when employing statistics, employers would perforce skew the chances against some deserving people. As such, statistical discrimination would be hard to put a law against, as it would impinge upon the freedom of employers to maximize their productivity. In the same vein, unconscious bias is born out of ingrained habit and heredity. It is best tackled by heightening awareness, instead of legal penalizing. Thus, it would be prudent not to lay down laws against statistical discrimination and unconscious bias.

Current Workplace Laws No Longer Required

There are a host of federal laws laid down against discrimination in all forms. Title VII of the Civil Rights Act prohibits employers to discriminate on the basis of race, color, religion, sex and national origin. The Age Discrimination in Employment Act prohibits discrimination on the basis of age. The Americans with Disabilities Act prohibits discrimination against people with disabilities. The Equal Pay Act requires employers to give men and women equal pay for equal work. The Immigration Reform and Control Act prohibits employers to discriminate on the basis of citizenship and national origin. The Genetic Information Nondiscrimination Act prevents employers from using the employees’ genetic information against them (NOLO, n.d.). All anti-discrimination laws have a specific mandate, and are mutually exclusive. Therefore, there is no need to repeal any existing anti discrimination law.

Requirement of Additional Legislation or Enforcement in the Area of Anti Discrimination in the Workplace

As seen from the section above, the number of anti discrimination laws is large and all-inclusive. There is no need to expand on the list of anti-discrimination laws. Instead, there is a requirement for a more robust dialogue across all sections of civil society so that inherent biases and prejudices can be removed. This would serve to remove discrimination in a more permanent and less obstructive manner.

References

Baumle, A.K., & Fossett, M. (2005). Statistical discrimination in employment: Its practice, conceptualization, and implications for public policy. American Behavioral Scientist 48: 1250-1274. doi: 10.1177/0002764205274818. Retrieved 03 Feb 2015, from http://www.sagepub.com/healeystudy5/articles/Ch5/Statisticaldiscriminationinemployment.pdf
Lee, A. (2005). Unconscious bias theory in employment discrimination litigation. Harvard Civil Rights-Civil Liberties Law Review 40/2: 481-503. Retrieved 03 Feb 2015, from EBSCOHost database. (AN 17774907).
NOLO. (n.d.). Federal antidiscrimination laws. Retrieved 03 Feb 2015, from http://www.nolo.com/legal-encyclopedia/federal-antidiscrimination-laws-29451.html