Economic Discrimination and Legal Provisions in India

The British Railway Clauses Consolidation Act of 1845, which forbade common carriers from charging one client more than another for the same service, marked the beginning of the legal acknowledgment of economic discrimination. Discrimination was defined in nineteenth-century English and American common law as unjust distinctions in economic transactions.

In addition to the aforementioned problem in the British Railway Clauses, a hotelier's capriciously refusing to give rooms to a particular customer would be considered economic discrimination. The purpose of this early legislation was to prevent discrimination by Protestants who might be hostile toward Catholics or Christians who might be hostile toward Jews.

Meaning of Economic Discrimination

The act of discriminating against something or someone based on one or more specific economic factors is known as economic discrimination. In other words, discriminate based on one's ability to pay. Prices, employment conditions, and wages could all be contributing factors to this prejudice.

Causes of Economic Discrimination

We can point out a number of the factors that contribute to economic prejudice. However, the following might be the most typical −

• Racism, Sexism, Age − Any discrimination that manifests as economic discrimination and is motivated by one of the following categories: gender, age, nationality, religion, etc., is similar to how employers who hire foreign workers often pay them less.

• Comfort and Efficiency − Minorities are so fragmented in many countries that allocating resources to address an issue that goes ignored is ineffective. To put it another way, you are not trying to avoid it by not being obnoxious.

• Profitability − When dealing with particular ethnic groups is uninteresting financially, it is one of the most frequent causes, along with the first. Economically speaking, discrimination occurs when providing goods and services tailored to certain particularities is unprofitable and we choose to serve the wider population instead.

• Tradition − Economic prejudice has its origins and roots throughout history. Because of ingrained beliefs and the effects of previous generations, discrimination against minorities is a cycle that keeps happening all across the world.

The institution of slavery is frequently referred to as America's "original sin" because it is the cause of all current racial issues. Racial residential segregation, which continues to be a major source of economic hardship for African Americans in modern US society, is a result of racially prejudiced incidents like these. In 2020, funding for schools in predominantly white areas was $23 billion more than that for schools in historically African American ones.

Forms of Economic Discrimination

Economic discrimination takes a variety of forms. Inequitable employment practices come in second place as the most prevalent type of discrimination. However, discrimination against minority consumers and business owners exists in a number of contexts, and there are nations outside the United States that practice religious or racial discrimination.

Wage Discrimination

Numerous studies have revealed that, in the United States, a number of minority groups—including black men and women, Hispanic men and women, white women, gay men of any race, and trans people of any race—suffer from lower wage earning for the same job with the same performance standards and responsibilities as heterosexual white and Asian males. The numbers vary from research to research, but the majority show that affected minorities have, on average, lower earnings than other groups by 5 to 15%.

Hiring discrimination

Discrimination in hiring follows a trend that is comparable to salary discrimination. Employers frequently choose to recruit a candidate of a particular race over a minority applicant or a male candidate over a female candidate to fill a position. The number of cases of hiring discrimination has multiplied fivefold over the past 20 years, according to research on employment practices in the US. However, their share of overall workforce hiring has declined almost equally sharply. Companies are exceedingly selective about who they hire and don't hire due to the strict regulations against hiring discrimination. However, studies have shown that white men have an advantage over equally qualified men of color or women of any race when it comes to finding employment. In many cases, a firm will recruit someone to fill a position, fire them, then hire someone else to fill the void, and so on, until they find someone "suitable"—which is frequently not a minority—by repeating the process.

Against Consumers

Due to stricter legislation against such tactics, discrimination against consumers has mostly lessened, yet it still exists in both the US and Europe. Price and service discrimination are two of these prejudices most prevalent forms.

Discrimination Based on Price

Charging various persons with varying prices for goods and services based on their race, ethnicity, religion, or sex is discrimination based on pricing. Price discrimination, a distinct economic concept, should not be confused with it. Price-based discrimination may include, but is not limited to −

• Higher prices for essential services (health care, repair, etc.).

• The costs associated with per diem rates have gone up (for example, one individual might be charged $40 while another is charged $100 for the same service).

• Not providing discounts, specials, rebates, etc. to people of color

• Greater insurance costs for people of color.

Services Discrimination

Despite the fact that pricing discrimination refers to services, service discrimination occurs when minorities are only given access to subpar or no services at all. Since it is more challenging to confirm and establish, the majority of consumer prejudice, according to at least one research, goes into this group. Several claims of discrimination have been made, such as −

• Offering only expensive insurance options,

• Refusing to ensure minorities, declining to provide finance to minorities,

• Withholding services from minorities.

Against Businesses

Suppliers, banks, and other sources of capital funding may all discriminate against minority-owned enterprises. The majority of these cases take place outside of the US, since doing so has tax benefits and even perks for public relations. According to a Babson College study on the "State of Businesses Owned by Women of Color," women of color are starting businesses three-to-five times more frequently than all other business types.

Example of Economic Discrimination

Last but not least, we can use a scenario in which economic discrimination takes place in the corporate world as an illustration. This is a result of the owner(s) being members of a minority. Well, imagine a scenario in which suppliers and financial institutions refused to work with a specific business. a business that is not given enough attention, is not provided with raw materials, is not provided with raw materials of the same quality as other businesses, or is not given finance, preventing it from competing on an equal footing with other businesses in the market.

Last but not least, we can use a scenario in which economic discrimination takes place in the corporate world as an illustration. This is a result of the owner(s) being members of a minority.

Well, imagine a scenario in which suppliers and financial institutions refused to work with a specific business. a business that is not given enough attention, is not provided with raw materials, is not provided with raw materials of the same quality as other businesses, or is not given finance, preventing it from competing on an equal footing with other businesses in the market.

Economic Discrimination and Indian Law

Prima facie, Part III (Fundamental Rights) of the Constitution of India strictly prohibits discrimination based on caste, religion, gender, and place of birth and provides for the right to equality, the right to freedom of occupation, and the right to freedom of trade and commerce.

Besides, time to time, the government of India keeps legislating various legal provisions and policies to address economic discrimination. For example, The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, provides for the prevention of atrocities against members of the Scheduled Castes and Scheduled Tribes. The National Rural Employment Guarantee Act, 2005, guarantees 100 days of employment per year to rural households.

Further, the government also runs several affirmative action programs, including reservations in government jobs and educational institutions for members of the Scheduled Castes, Scheduled Tribes, and Other Backward Classes. The government also provides financial assistance and subsidies to small and marginalized businesses.

In spite of these legal provisions and programs, economic discrimination continues to be a significant challenge in India. The perseverance of discrimination is due to a range of factors, including social attitudes, some discriminatory cultural practices, and historical legacies of discrimination and inequality. Therefore, addressing economic discrimination requires a sustained effort from the government and society at large to change attitudes, promote equality, and create opportunities for all.

Conclusion

Numerous aspects of people's lives, including education, employment, housing, and the criminal justice system, are impacted by discrimination. Economists frequently use one of two models to explain discrimination: one based on biased "tastes" for discrimination, and the other based on insufficient data that results in statistical discrimination.

Frequently Asked Questions

Q1. What is social inequality?

Ans. The uneven distribution of resources within a society leads to social inequality when certain patterns are created along the lines of socially defined categories of people. This is often accomplished through norms of resource distribution. It has a gender cap that restricts how easily women can move about in society. It also establishes a gender cap among people.

Q2. What do you mean by Racial discrimination?

Ans. Any form of prejudice towards someone based on their race, ethnicity, or skin tone is known as racial discrimination. By refusing to interact socially, conduct business with, or share resources with members of a certain group, individuals might engage in discrimination. Governments may practice de facto discrimination or express it blatantly in the law.

Q3. Define the term Statistical discrimination?

Ans. Theoretically, statistical discrimination occurs when economic agents (consumers, workers, employers, etc.) have incomplete information about the people they contact, leading to racial or gender inequity.