Suppose that a prejudiced white employer is willing to hire white workers at a rate of $16/hour, and this employer has a discrimination coefficient of $4. This implies that the employer would

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The discrimination coefficient of $4 means that the prejudiced employer values a white worker $4 more than a nonwhite worker. Therefore, to hire a nonwhite worker, the wage rate must be $4 less than what the employer would pay a white worker, which is $16/hour. Thus, the employer would hire a nonwhite worker at a rate of $12/hour or less.

Suppose That a Prejudiced White Employer Is Willing to Hire