Policy Issue
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Minority Preference Programs
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There are some 171 federal laws and programs that aid racial and ethnic
minorities and women. All but a dozen are outright preference programs,
also known as set-asides. Here are some examples:
- At least 10 percent of Agency for International Development contracts
for famine recovery and development aid must go to minority businesses.
- The Federal Deposit Insurance corporation has the authority to relax
standards for approving bank takeovers by minority holding companies.
- The Labor Department requires state agencies aiding migrant farm workers
to employ staffs reflecting the racial and ethnic composition of local work
forces.
- The Small Business Administration's Section 8(a) program steers federal
contracts to minority and women-owned firms.
In practice, such programs allow firms with political connections to avoid
competition. Moreover, the programs are open to fraud and have been abused
in the past.
- Despite the fact the Section 8(a) program is intended for SBA-defined
small businesses, two Maryland companies have received a combined $865 million
in contracts over the years.
- A woman heading one of the companies gave false and misleading information
concerning her firm's size and equity, as well as her own education and
citizenship credentials.
- The other firm had a white co-owner who enjoyed a higher salary than
his minority counterpart.
- An investigation of Texas firms participating in the SBA's 8(a) program
resulted in 12 indictments -- with nine people pleading guilty.
- One chief executive pleaded guilty to more than 180 counts, including
mail fraud, money laundering and embezzlement.
Critics charge that set-aside programs support "disadvantaged"
millionaires, get firms hooked on government dollars and lack even the justification
that they help minorities become self-sufficient.
Source: Carl Horowitz, "Time to Set Aside Set-Asides?" Investor's
Business Daily, November 30, 1995.
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Racial Quotas Versus civil Liberties
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Critics have long complained that quotas, protections and set-asides based
on race, ethnicity and sex have replaced individual conscience and persuasion
as avenues to social progress. By pursuing this course, they argue, we have
become a country in which people have different rights under the law based
on their race and sex. Among their criticisms:
- The federal government has 160 race and sex preference programs.
- Government contractors and spending programs are awash in set-asides
and quotas.
- Corporations -- which once promoted on merit -- now reserve fast career
tracks for "protected minorities."
- Managers risk pay cuts and low "diversity report card" ratings
for failing to promote by quota.
- Museums have been attacked for having too few exhibits by women and
minority artists.
Quotas are the work of Equal Employment Opportunity Commission interpretative
regulations -- themselves illegal under the Civil Rights Act -- as well
as federal judiciary decisions.
Polls show the American people are fed up with quotas.
- They reject employment quotas by 63 percent to 35 percent; college
admission quotas by 57 percent to 39 percent.
- Favoring a less qualified "protected minority" over a white
applicant is rejected by 84 percent.
- Even blacks disapprove of this policy by 68 percent to 22 percent.
Source: Paul Craig Roberts, "The Rise of the New Inequality,"
Wall Street Journal, December 6, 1995.
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Alternative Affirmative Action
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Affirmative action programs fail because they do nothing to bring unprepared
minorities up to the level of the students and workers who gain their positions
on merit alone. As a result of racial quotas:
- On average, black and Hispanic students entering the University of
California at Berkeley have much lower high school grade-point averages
and scores on the Scholastic Assessment Test than whites and Asians.
- Students admitted through special set-asides do much worse at the
college level, lowering the six-year graduation rate for blacks to 59 percent
and for Hispanics to 64 percent, compared with 84 percent for whites and
88 percent for Asians.
A different kind of affirmative action could address the the main cause
of unequal opportunities among adults - differences in childhood experienceces
- by human-capital investments that help children do well as adults.
Such affirmative action should include:
- Tuition vouchers for private elementary and secondary schools so poor
children can get a decent education, rather than attending inadequate local
public schools.
- Welfare reform to keep poor families intact.
- A continuing crackdown on crime until children are convinced it doesn't
pay.
- Programs to improve medical care and nutrition.
Source: Gary S. Becker, "End Affirmative Action As We Know It,"
Business Week, August 21, 1995.
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Multiculturalism Hurts Canada
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As Canada has found out, an emphasis on ethnic identity -- at
the expense of socially unifying factors -- can tear a nation
apart. And American observers are concerned that we, too, are
losing our national identity as the same process takes hold here.
- Canada's experience can be traced to a 25-year campaign by
the federal government to promote multiculturalism (i.e., the
preservation of ethnic cultures, language and group identities)
at all levels of the confederation.
- Initiated by the Liberal Party in 1971 and adopted by the
provincial governments, the policy provides "assistance to
cultural groups to retain and foster their identity."
- The policy has been implemented by the establishment of a
Ministry of Multiculturalism and a constitutional amendment, followed
by the world's first multiculturalism law.
Observers report that this preoccupation with protecting and encouraging
diversity has created a society with a multitude of state-supported
ethnic identities bearing no common thread. The policy is said
to be washing away all vestiges of Canada's already ill-defined
national character and endangering the union.
- The long dispute between the French and English has resulted
in two different national birthdays.
- As another example, many Canadians celebrate Thanksgiving,
while others do not -- believing it has certain religious and
historical overtones incompatible with their beliefs.
While these may seem minor irritants, many Canadians say they
are symptomatic of larger pressures which may lead to division
and collapse. As one politician has pointed out, "Every
dollar spent on multiculturalism is a dollar spent on the breakup
of the Confederation."
Source: Mark I. Schwartz, "What Multiculturalism Did to
Canada," Wall Street Journal, April 5, 1996.
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