Racial discrimination in hiring sustains massive economic disparities.

Racial discrimination in hiring sustains massive economic disparities. New economic research reveals that discriminatory practices account for 57% of the racial unemployment gap, 48% of wage disparities, and 16% of median wealth gaps between black and white workers. Using labor market analysis, economists found that when prejudiced firms operate alongside non-prejudiced competitors, discrimination becomes an equilibrium outcome due to labor market frictions. The study shows black workers face increased unemployment and wage volatility across business cycles, amplifying their economic risk. Eliminating discriminatory hiring practices would reduce these disparities significantly and improve overall economic welfare for affected workers and society broadly.