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

Michael Reich

Journal of Human Resources, 1978, vol. 13, issue 4, 524-544

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.

Date: 1978
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