Divide and Conquer: Microfoundations of a Marxian Theory of Wage Discrimination
Volume: Volume 10, No. 2
Issue: Autumn 1979
Pages: pp. 695-705
Authors: John E. Roemer
Title: Divide and Conquer: Microfoundations of a Marxian Theory of Wage Discrimination
Abstract: Microfoundations for a divide-and-conquer model of wage discrimination are provided by positing that workers' psychologies permit racial integration of firms to weaken workers' unity and hence reduce their bargaining power against employers. In this bargaining -- as opposed to competitive -- model of wage determination, there are discriminatory equilibria at which both white and black workers are worse off and employers are better off than would be the case without worker dissension. Furthermore, owing to the bargaining structure, market forces cannot unravel the discriminatory wage bargain.
JEL Classification
Labor Economics: Theory and Empirical Studies Illustrating Theory (8210)
Economics of Minorities Economics of Discrimination (9170)