1991 Civil Rights Act Hurt Minorities
October 7, 2003
The Civil Rights Act of 1991 was enacted to protect minority workers. It greatly expanded the rights of plaintiffs in discrimination complaints to the Equal Employment Opportunity Commission (EEOC) and in federal civil court.
Both proponents and opponents of the Act believed that it would lead to a greater proportion of minority employees in the labor market. A new study by the Cato Institute, however, finds that the opposite occurred.
According to the authors, the Civil Rights Act of 1991 appears to have had a significant effect on the litigiousness of employees:
- Analysis of lawsuits filed in federal court shows that the number of cases alleging employment discrimination more than doubled from 1991 to 1995.
- Similarly, the number of race- and gender-based complaints filed with the EEOC increased by 13 percent and 46 percent, respectively, from 1991 to 1994.
- Monetary benefits awarded in cases resolved by the EEOC increased by 47 percent and 87 percent, respectively, over that period.
The authors argue that these additional costs hurt minority workers by making it more expensive to hire them due to the increased likelihood of being sued. As a result, most firms hired fewer minority employees. It also appears that, in response to the 1991 Act, firms simply shifted their form of dismissal for some black men from individual firings to layoffs to lessen the likelihood of getting sued.
Source: Paul Over and Scott Schaefer, "The Unintended Consequences of the '91 Civil Rights Act," Regulation Magazine, Cato Institute, Summer 2003.
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