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Political Editors / Mar. 11, 2021

In Brief: Fifty Years of Reparations

Hillsdale College’s Paul Moreno on the “hidden tax to benefit black and other minority workers.”

Reuters reported last month that “President Joe Biden supports a study on whether descendants of enslaved people in the United States should receive reparations.” But as Paul Moreno, the Dean of Social Sciences at Hillsdale College, observes in an enlightening column at RealClearPolicy, “The fact of the matter is that we’ve had reparations, in the form of ‘affirmative action,’ for the last half-century.” He explains:

Fifty years ago this week the Supreme Court gave its approval to the “disparate impact” theory of discrimination under the Civil Rights Act. A month later the Third Circuit Court of Appeals approved the Department of Labor’s “affirmative action” orders, which the Supreme Court let stand.

The Civil Rights Act was passed in 1964. Title VII of the legislation “prohibited racial (and sex) discrimination for all employers,” says Moreno, though it “applied only to intentional discrimination.” Importantly,

It protected merit and seniority systems and other qualification standards so long as they were not “the result of an intention to discriminate” or “designed, intended or used to discriminate.” It prohibited “preferential treatment to any individual or group” due to statistical “imbalance which may exist” between the group and the total population.

However, Moreno adds, “The agency that enforced Title VII, the Equal Employment Opportunity Commission, quickly got around these provisions.”

It developed the “present effects of past discrimination” principle to make the act retroactive. The “disparate impact” theory held that qualifications that resulted in few minority employees were per se discriminatory. Individual treatment and intent did not matter, only statistical results did. The Supreme Court upheld the disparate impact theory in the case of Griggs v. Duke Power Company, in April of 1971.

Racial discrimination is unacceptable, of course, but there’s a fine line between rectifying a problem and causing even more harm by overreaching. As Morano concludes:

Long before “woke capitalism,” corporate America learned to embrace race-based personnel policies. They figured that the cost of hiring a certain number of less-productive minority employees was less than the cost of defending purely merit-based employment systems. …

Corporations … do not pay for affirmative action. Like other regulatory costs, they pass them on to the consumer. Thus, we all pay for affirmative action (including, to some extent, its beneficiaries). It is a sort of hidden tax to benefit black and other minority workers. It is reparations in all but name.

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