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By now I am sure you have heard that there are laws being floated which will make it illegal for firms to discriminate against the unemployed when it comes to hiring decisions. Forget for the moment any literal difficulties with identifying whether this is happening, or any other objections you might have to the difficulty of implementing it.

The law’s intention is to improve the labor market opportunities for people who are currently unemployed. Let’s grant that the current unemployed are not systematically different than those people who are already employed (a very tenuous assumption). It is still the case that when employers discriminate against them, employers are doing them a service. How can that be? After all, if Wintercow Inc refuses to hire people that are unemployed, doesn’t that make it harder for the unemployed to find work.

Not really.

It may be harder for them to work at Wintercow, Inc. But by hiring anyone at all, what Wintercow has done is make more jobs available elsewhere to the unemployed. In other words, it will be easier for workers to find work at Summercow, Inc. The only way that discriminating against the unemployed would make their opportunities worse is by assuming that every single employer responds by doing the same thing – a hard assumption to maintain.

As a final note, I find such anti-discrimination proposals problematic for two additional reasons.

  1. If you think about the world in terms of vulgar-Keynesian “Aggregate Demand” terms, then you shouldn’t care about the law at all. After all, demand is demand is demand is demand regardless of where it comes from, right? But I would be willing to wager that there is more support for this kind of a law among self-styled Keynesians than among their opponents. What, then, could explain that difference in behavior? You all know my answer to that.
  2. I do not hire anyone. So not only do I discriminate against the unemployed, I also discriminate against the employed. Yet no law is being proposed to deal with this obvious case of injustice. I truly am doing a disservice to the world by selfishly spending my extra time with my kids and my students than trying to open a business and hire people, right?

5 Responses to “Discriminating Against the Unemployed”

  1. ckr says:

    I suppose the same economic logic would apply to the following? Washington DC’s erstwhile mayor, Marion Berry, who is now DC Council member (yes, he’s still serving our city), is championing a new civil rights movement to end employment discrimination against criminals ‘ex-offenders’, a group we know he has personal familiarity with.

    http://www.washingtonpost.com/local/dc-politics/marion-barry-seeks-anti-bias-protection-for-those-with-past-arrests-and-convictions/2011/11/23/gIQAa8AHtN_print.html

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  2. ckr says:

    I suppose the same economic logic would apply to the following? Washington DC’s erstwhile mayor, Marion Berry, who is now DC Council member (yes, he’s still serving our city), is championing a new civil rights movement to end employment discrimination against criminals ‘ex-offenders’, a group we know he has personal familiarity with.

    http://www.washingtonpost.com/local/dc-politics/marion-barry-seeks-anti-bias-protection-for-those-with-past-arrests-and-convictions/2011/11/23/gIQAa8AHtN_print.html

    “If Barry’s legislation is adopted, an employer would be allowed to inquire about a criminal record only after a “conditional (job) offer” has been made. If an employer rescinds the offer based on a past arrest, he would have to submit documentation explaining why the applicant could not work in that job”

  3. Rod says:

    Marion Barry is an example of voters getting what they deserve if they are stupid enough to vote for him.

    When my brother-in-law was working to get all of the DC hospitals to use his bloodspot test, Marion Barry wrote back that Ed had to certify that his workplace was drug free and that all of his employees would be tested for drugs. Is there a black version of chutzpah?

  4. Rod says:

    As for Wintercow, Inc., I hear Elliot Spitzer is working on an investigation of all of those ghost employees that are not listed on the payroll. Whether or not you have employees, you still have to pay the minimum premium for workers’ comp.

  5. I am glad I read your whole post, because I was just going to write your second additional point. I think this is the best reasoning.

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