Tuesday, June 01, 2004

The Cost of Affirmative Action

La Griffe du Lion, in "Affirmative Action: The Robin Hood Effect", assesses the redistributive effects of affirmative action:
[O]n average a black worker between the ages of 25 and 64 earns an extra $9,400 a year because of affirmative action. Hispanics also benefit to the tune of almost $4,000 a year. However, being a zero-sum game, white workers pay an average of about $1,900 annually to foot the bill.
Working from data for 1999, La Griffe estimates that affirmative action cost white workers a total of $192 billion. But there's more to it than that.

Because of affirmative action -- and legal actions brought and threatened under its rubric -- employers do not always fill every job with the person best qualified for the job. The result is that the economy produces less than it would in the absence of affirmative action.

GDP in 1999 was $9.3 trillion. Taking $192 billion as an approximation of the economic cost of affirmative action in that year, it's reasonable to say that affirmative action reduces GDP by about 2 percent. That's not a trivial amount. In fact, it's just about what the federal government spends on all civilian agencies and their activities -- including affirmative action, among many other things.

Favorite Posts: Affirmative Action and Race