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Critical Writing for Economics of Discrimination

The article by Dorothy A. Brown (2021) describes the obstacles which Black people face in the scope of real estate. According to the article, Black Americans were reduced in their home values for a number of reasons. For example, districts inhabited by white Americans are always more expensive than districts where Black Americans live. In contrast to white neighbors, Black Americans cannot benefit from homeownership, as the majority of the prices are set by white people. Whites simply do not want to live next to Black American people. Therefore, the discrimination towards Black people plays a significant role here.

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The next reason could be the tax policy. The person who sold their house in the district inhabited by Black folks was at a loss. However, if they sold their house in the white territory, they would get up to $500,000 of gain tax-free. Taxes of Black people support the federal government, but people cannot do anything about it; Black people do not benefit from any subsidies for homeownership. In fact, less than a half of Black Americans own homes in comparison to the majority of white American homeowners. Another factor that could matter why white Americans do not want to live near Black Americans is the big number of frequent crimes commited by Black people. However, it is important to remember that there are criminals in each nation.

Preference-based discrimination is described by the Becker’s model. It implies that employers might not want to interact with people from other group, for example, other race, gender, or orientation, and to compensate the cost of their employment. Housing segregation is a chain of refusals to Black people in equal access to housing. The following reason for the segregation can possibly be caused by premarket factors and political-based regimes of discrimination. Black people are not able to enter neither labor market nor the housing market because of prejudices and labels concerning governing zoning, education, and housing put on them (Murphy 4).

Black people also have to suffer from redlining – house differentiation by people’s class and status, where Black inhabitants are marked as the lowest type. From the perspective of loan officers, redlining was supposed to solve the problem of borrowers’ inability to pay off the mortgage for banks to avoid interaction with debtors. If using stereotypical thinking and considering white districts as luxurious and decent, it would be appropriate to give priority to a mortgage to them. Black Americans are discriminated against by their neighbors mostly because of prejudices and assumptions. The presentation “The explanation of The Becker Model” tells that the prejudices of white people lead to the gap between Black-White wage, and according to the article, white families are eight times wealthy than Black ones. This proves how much is the gap between them. Moreover, often Black Americans are not able to raise their intergenerational mobility, which includes well-being and opportunities in society, because of their inability to move up the career path. In fact, in the U.S., this mobility is lower than in other countries (Alesina et al. 13).

It is eventual to propose an anti-discriminatory policy in some companies of Black American districts. For instance, if the employer defines the company and its philosophy as totally free of any kind of discrimination, there can be candidates who are absolutely normal with it. People aiming to discriminate will simply not attend the company because in a case of a minor offense, they would be fired. This is possible to conduct due to the raising of tolerance awareness and liberty from stereotypes in modern times. For the company, it will solve the problem of compensation to people who do not want to work with other groups. For Black people, it may solve the problem of premarket discrimination, as they will have a guaranteed place for work.

Works Cited

Alesina, Alberto, et al. “Intergenerational Mobility and Preferences for Redistribution.” American Economic Review, vol. 108, no. 2, 2018, pp. 521–54. Crossref, Web.

Murphy, M. Kevin. “How Gary Becker Saw the Scourge of Discrimination.” Chicago Booth Review, June 15, 2015, pp. 1-8.

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