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Brux column: The economics of discrimination and racism

We are living in a polarized time, where discrimination and racism, as well as other forms of hate, are rampant. Consider the economic effects of discrimination.

First, discrimination reduces our nation's GDP, which means less job creation. This is due to inefficiencies associated with an absence of free market forces that normally determine efficient outcomes associated with hiring the best person for the job. When employers make decisions based on stereotypes, they end up hiring less qualified people.

Individuals experience economic discrimination in ways far more graphic than our hypothetical GDP levels. The unemployment rate for blacks, for example, is about twice that for whites. (To be classified as unemployed, one must be actively seeking a job.) Hispanic unemployment rates fall between these two extremes.

For those with full-time jobs, median weekly earnings (for ages 25 or older) are $725 for blacks, compared to the national median of $922. And, if we adjust for educational levels, similarly educated blacks still earn far less than whites. The same is true for Hispanics and Native Americans.

The U.S. poverty rate, which measures the percent of people with household incomes below the poverty line (despite any government cash assistance) is 8 percent for whites, whereas the poverty rate for Native Americans is 22 percent. It is 20 percent for Hispanics, and 16 percent for blacks.

Other socio-economic data show, for example, that the black infant mortality rate is far higher and life expectancy far lower than whites. About twice as many blacks lack health insurance than whites.

So — how much does racism enter these statistics? The most obvious indicators of racism are the words people use. We know, for example, that white supremacists chanted anti-Jewish and anti-black rhetoric in Charlottesville last year.

Whose words do we turn to in opposition to racism? Certainly, many of our religious leaders, school teachers, parents, community leaders and others. It would be nice if our children could look up to our president as well. But — just consider his own words:

"I think I might have more Indian blood than a lot of the so-called Indians that are trying to open up the reservations."

[The Hispanic Miss Universe] is "Miss Housekeeping."

[I call Sen. Elizabeth Warren] "Pocahontas."

Mexicans are "bringing drugs, bringing crime . they're rapists."

"Why are we having all these people from shithole [African] countries coming here?"

[Haitians immigrants] "all have AIDS."

Other alleged quotations are too vile to print.

Then there are Trump's abhorrent words toward black politicians and sports figures, a Muslim gold star family, a Hispanic judge, and on and on.

Words matter, Mr. Trump. You know full well that the Central Americans on the U.S. border are ordinary people—mothers, fathers and children — fleeing violence that has already claimed many family members. Yet you, Mr. Trump, refer to them as "infestations" and "hordes" and you suggest they are terrorists. And you know, Mr. Trump, that stereotyping a group of people based on one criminal is the very definition of racism. (Your TV ad to this effect was so offensive that television networks refused to run it.)

And you've influenced others, Mr. Trump. The mayor of Tijuana now refers to the migrants as "hordes," "invasions" and "terrorists" and says that "human rights should be reserved for righteous humans." You loved that, Mr. Trump, "human rights only for the righteous!" and you tweeted your approval (adding "Go home!")

I believe that all of us, even on our worst possible day, would never use words like these. At some point, Trump will go down in history as a president with despicable and racist language. Our grandchildren will learn about it and they will want to know where we stood at the time.

Discrimination stems from racism. Unequal opportunity stems from racism. Hate crimes and travel bans stem from racism. This does not bode well for a country like ours, premised on equal opportunity for all. We will want to go down on the right side of history, telling our children and grandchildren how we personally responded to the president's racism.

This opinion column will address the economics of current policy issues. Writer Dr. Jackie Brux is an emeritus professor of economics and founder/director of the Center for International Development at UW-River Falls; and author of the college textbook, "Economic Issues and Policy."