Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

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Quizplus · Accepted Answer

A prejudiced employer with a discrimination coefficient of $24/hour perceives the cost of hiring African-American workers as $18 + $24 = $42/hour, which is higher than the $21/hour for white workers. Therefore, they will not hire African Americans, even if they offer to work for free, as the perceived cost is still higher.

Suppose That White Workers Are Getting Paid $21/hour, While Similarly