Racial Discrimination and White Gain

The question of whether or not whites gain economically from economic discrimination against third world people is examined with evidence from the 1970 U.S. census. The impact of racial discrimination is measured by the percentage of the population of third world origin in each state and by the ratio of black to white male earnings for those who work full time. White gain is measured by the level of white male earnings in each state and the Gini coefficient of earnings inequality among white males. If whites gain economically from racism, we would expect to find that the greater the percentage of the population of a state that is third world and the lower the ratio of black/white earnings then the higher the level of white earnings and the less the inequality in white earnings. The basic relationships were examined controlling for percentage of the population that is urban, percentage of the economically active population in manufacturing, level of personal income, region and percentage of the population that is third world. It is found that whites do not gain from economic discrimination; on the contrary, white working people actually lose economically from such discrimination. It is argued that racism is a divisive force which undermines the economic and political strength of working people and acts to worsen the economic position of white workers in the most racist areas. In support of this interpretation, data on the strength of unions is examined.