Race, competition and differential wages

This paper develops a competitive model of racial wage and employment discrimination. Discrimination is a persistent outcome of the interaction of two phenomena. The first is the adverse effect of racial conflict on the organisational strength of workers which, in turn, affects the formation of wage differentials. This is a class struggle effect. The second is the negative correlation between the interracial employment ratio and the wage differential, within occupations arid across all capitals. This is a racial exclusion effect. The interaction of the class struggle and racial exclusion effects implies persistent discrimination.