Labor market discrimination can take many forms. Employment discrimination involves not hiring, promoting, or retaining workers because of their race, sex, or other demographic characteristics.

• Allowing men but not women in the same jobs access to overtime work or providing flexible schedules to young but not older workers in the same jobs are also examples of employment discrimination.

• Wage discrimination occurs when equally productive workers in the same job are paid different wages based on a characteristic unrelated to productivity.

An earnings ratio measures the earnings of one group as a percentage of the earnings of another group.

• In 2011, the median weekly earnings of white males were $909, and the median weekly earnings of white females were $735. The female/male earnings ratio was 0.81

Earnings ratios can be used to compute the pay gap between two groups. The pay gap is the percentage difference in earnings between groups.

The demand for labor comes from businesses, including restaurants, accounting firms, banks, school districts, hospitals, and all the other producers of goods and services in the economy.

The supply of labor comes from workers who sell their time to employers in exchange for wages.

The equilibrium quantity and price of labor are determined by the demand and supply of workers in that particular market.

• The demand and supply model implies that one source of wage differences between groups is their relative supply of labor in high-paying versus low-paying jobs.

• If different demographic groups tend to be overrepresented or underrepresented in high-paying or low-paying jobs, the average wages of the groups as a whole will be different.

Economists have estimated how much of the pay gap between groups can be explained by productivity-related characteristics, like education.

• About one-third of the pay gap between males and females can be explained by differences in the education, age, location, industry, and occupations of males and females.

• The remaining two-thirds of the gender pay gap stems from other factors.

• About half of the pay gap between black and white workers is explained by differences in the education, age, sex, location, occupation, and industry characteristics.

• The remaining half of the black/white pay gap cannot be explained by these characteristics.

Discrimination in the labor market occurs when workers who are equally productive are treated differently based on characteristics that are not related to productivity, or when workers who are not equally productive are treated the same because of some arbitrary characteristic.

ln taste-based models of discrimination, people are assumed to have preferences not to work with, hire, or buy from the discriminated group. These personal preferences impact how workers are treated in the labor market.

Employer discrimination occurs when employers base their employment decisions on prejudice against certain workers.

Customer discrimination occurs when customers base their purchasing decisions on the race, sex, or other demographic characteristics of the workers with whom they interact.

Statistical discrimination occurs when people use information about the average characteristics of a group when making decisions about an individual member of that group.

The 1964 Civil Rights Act was the first federal legislation to prohibit employment discrimination on basis of race, colour, religion. sex, or national origin. The Civil Rights Act forms the cornerstone of federal antidiscrimination policy in the U.S. The Equal Employment Opportunity Commission is the agency that monitors compliance and enforces the Civil Rights Act.

Affirmative action is a set of policies that mandate taking action to ensure the equal treatment of people regardless of their race, creed, colour. or national origin. Affirmative action requires some organizations to take action to increase the representation of women and minorities.

The cornerstone of antidiscrimination policy in the U.S. is the 1964 Civil Rights Act, which prohibits employment discrimination on the basis of race, colour, religion, sex, or national origin.

Economic reasoning predicts that antidiscrimination policies can have both positive and negative impacts on protected groups of workers, and much economic research has sought to isolate the impacts of the laws.