Pick a source of salary discrimination. For illustrative purposes, suppose that a left-handed person only makes $0.70 for every $1.00 a right-handed person makes doing the same job.
In a perfect world, this problem can get fixed by selfishness. I’ll premise this by saying that there are a lot of reasons this *wouldn’t* exactly work, but the basic idea might be worth exploring:
So FooCorp is paying lefties 70% of what they pay righties. You’re an amoral entrepreneur with no interest in justice or fairness – but you do want to break into the Foo business, and you’re planning to launch AppFoo, which takes all the things you love about Foo and makes it cloud social. You know that you’re going to need some experienced Foo professionals to get this off the ground, and you want to get it done as inexpensively as possible so you can spend your remaining gold on various other amoral pursuits (I dunno, superyachts? Robot sharks?). Then you remember: FooCorp is underpaying all those lefties! You invite all the lefties at FooCorp to come work for you at 80% of what the righties are making (gotta save that shark money) – still a big raise for them. Soon you’ve got all the lefties in the Foo industry at your command and AppFoo is a success, rapidly taking over the Foo market thanks in part to your lower labor costs.
Until iFoo comes along and offers all the lefties 90% of what the righties are making…FooFoo offers 95%…and soon handedness-discrimination is lost in the noise of an infinitesimal difference.
The point is, any time you see systematic discrimination, that’s a weakness on the part of the discriminators. Even if you don’t spend your evenings laughing maniacally as robotic sharks circle your superyacht, you can improve the world *and* damage discriminators just by being somewhat less discriminatory.
Disclaimer: An incomplete list of real-world things which would keep this from working perfectly, but not necessarily render it worthless: Labor costs are often a small fraction of business costs, and may not provide a significant advantage. Figuring out exactly how much people make is hard. People are often reluctant to change jobs for a lot of very good reasons, even if the new job offers better pay. Reality is not an Econ 101 textbook.
4 thoughts on “Zeno’s Discrimination”
Every advantage eventually comes a significant advantage as a business becomes more evolved.
Maybe I’m not seeing the mistake, but once someone has predominantly lefties, let’s say at 0.8 pay, then someone else couldn’t compete in labor cost by offering 0.9, right?
I realize this is an old post, but this seems to be Gary Becker’s theory of discrimination.