The three theories that try to explain economic inequality are

The three theories that try to explain economic inequality are: Becker’s theory, split labor market theory, and Marxist theory. Becker’s theory draws on the functionalist perspective, while the other two theories are forms of conflict theory. These three theories differ in explaining both why racial discrimination in employment occurs and who gains or who loses as a result of said discrimination. “Becker’s theory and the split labor market theory argue that white laborers gain and employers or capitalists lose as a result of discrimination, while Marxist theory maintains that employers and capitalists gain and white workers lose as a result of discrimination” (Farley, 2012, p.285). Moreover, Becker’s theory considers the individual when explaining the why of discrimination, while the other two theories consider economic motivation.

The theory that I have chosen to talk about more thoroughly is Becker’s theory. Becker believed that some people just have a “taste for discrimination” (Farley, 2012, p. 283). He considered this to be the driving force behind an employer’s decision to discriminate. Thus, minority group members are not hired because of the employer’s own bias. Discrimination could also occur because the employer fears an adverse response from whites (e.g. employees and patrons). Becker’s theory argues that such hiring practices are dysfunctional for the whole of society and that eventually such practices should fall out of favor due to competition.

A major strength of Becker’s theory is that it does not only consider interest groups. Instead, this theory looks at the bigger picture when it comes to economic inequality. Plainly stated, “discrimination hurts the overall productivity of society” (Farley, 2012, p. 289). Such hiring practices do not ensure that the best candidate is getting the job, which undoubtedly has productivity repercussions. On the flip side, Becker’s theory centers around individual attitudes. This would be a weakness, because attitudes “are only weakly linked to discrimination” (Farley, 2012, p. 283). Becker’s theory gives no thought to any economic motivation behind discriminatory hiring practices. It also attributes discrimination to the individual only, without considering the social structure.

As Becker’s theory hypothesized, there has been a reduction in discrimination. However, this reduction probably has more to do with anti-discrimination laws than it does with realizing the dysfunction discrimination has on society. With that said, racial and ethnic economic discrimination still exists, it just occurs in more obscure ways. For example, I clearly remember my previous white employer throwing away the applications of minorities.