02.28.2010 0

Do Discrimination Laws Actually Help?

  • On: 03/17/2010 09:54:55
  • In: Property Rights
  • By Josiah Schmidt

    “A great bachelor pad for any single man looking to hook up,” is how Stonebridge Apartments, a complex in my hometown of Dayton, Ohio, advertised its studio apartments on CraigsList. For that, they face a lawsuit from the Ohio Civil Rights Commission and the Miami Valley Fair Housing Center. For discrimination.

    Still confused? The Dayton Daily News explained in its most recent issue: the Fair Housing Center took offense to the ad because, by advertising specifically to “bachelors,” Stonebridge’s ads were “suggesting families were not welcome.” Now, Stonebridge is being sued for $25,000 and a mandate that the apartment firm’s employees receive mandatory “fair housing law training.”

    First off, there are a couple glaring logical fallacies at work here. The first being that just because someone speaks favorably of one thing, doesn’t necessarily mean they’re speaking unfavorably of another thing. To say that encouraging bachelors to live in your apartment complex means discouraging couples from living in your apartment complex, is like saying that to love the color red means to hate the color blue.

    Furthermore, if we are to broaden the legal definition of “discrimination” to include everything, then everyone is guilty of all kinds of discrimination. You are guilty of discrimination when you consciously choose to only date other bachelors or bachelorettes–after all, you are discriminating against people who are already in relationships! Apartment complexes that forbid pets are discriminating against pet-owners. Apartment complexes that advertise their apartments as being $500/month are discriminating against people who cannot afford to pay $500/month. The list could go on and on.

    This particular case is, of course, one of the more absurd and twisted examples of political correctness run amuck in this country. But the issue raised goes much deeper, and has important implications for the notion of private property rights. The real question is: are government laws against “discrimination” really even necessary?

    Let’s examine what happens in a free and unhindered market when discrimination on the basis of some superficial characteristic (race, for instance) occurs. Let us say that Restaurant Owner Joe hates black people and will not serve them. If 10% of the population of his town is black, Joe has effectively alienated 10% of his potential customer base, right off the bat. The presence of a large population of blacks who want to visit a restaurant presents a profit opportunity for any of Joe’s competitors who are savvy enough to take advantage of it. As Joe’s racism continuously results in lost profit opportunities for himself, and increased profits for his non-racist competitors, Joe continuously has less and less market power, while Joe’s competitors gain more and more market power. The free market ceaselessly punishes those entrepreneurs who are too stupid or bigoted to take advantage of profit opportunities, and rewards those entrepreneurs who serve as many consumers as possible.

    In fact, just the other day, I found a flier underneath my windshield wiper advertising an “Alternative Lifestyle” (i.e. gay and lesbian) Night at a local bar. The bar owner, who I speak with often, has nothing good to say about gays, and commonly refers to them with a two word pejorative (each word beginning with the letter “f”). However, there is a sizable gay and lesbian community in this area, and–without any government prodding whatsoever–he saw the profitability of not just holding his nose and serving homosexuals, but going out of his way to cater specifically to them.

    But what about if an employer discriminates against hiring a particular employee, based on some superficial characteristic? Let’s say that Restaurant Owner Joe gets two applicants for a job–Greg, who has light skin, and Chris, who has dark skin. Greg, if hired, would bring in $7 of revenue per hour for Joe (i.e. Greg’s marginal revenue product is $7/hour). Chris, if hired, would bring in $8 of revenue per hour for Joe (i.e. Chris’s marginal revenue product is $8/hour). Joe, who hates blacks, decides to hire light-skinned Greg, instead of dark-skinned Chris. However, Joe’s competitor, Sally, sees Chris’s potential, and hires him. Not only does Joe miss out on $1 in opportunity costs every hour, for not hiring dark-skinned Chris, but Sally (Joe’s competitor) outproduces Joe to the tune of $1 every hour. As Joe misses out on lost profit opportunities, while his competitors reap it in, Joe loses more and more market power, while his competitors gain.

    So, what good do government “discrimination” laws really do? Nada.

    Not only are these regulations superfluous (since they compel businesses to do what market forces would eventually compel them to do anyway), they waste businesses’ time and money that could be spent actually serving consumers; the fines and penalties imposed on businesses divert resources from productive market activities to unproductive bureaucratic activities; the salaries of the bureaucrats necessary to enforce these regulations also represent a diversion of resources from productive to unproductive activities; and perhaps worst of all, these legal precedents dilute the concept of private property rights, which has served as the bedrock of all the past several centuries’ phenomenal increases in prosperity and living standards, which all Americans have benefited from.

    The Miami Valley Fair Housing Center and the Ohio Civil Rights Commission may feel that they are helping the downtrodden, but they are doing nothing more than wasting time and resources.

    Josiah Schmidt is a Liberty Features Syndicate contributor for Americans for Limited Government.

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