In other words, more greedy, less racist employers tend to drive less greedy, more racist employers out of business. Government regulation is be necessary to sustain discrimination by profit-seeking employers. Discrimination is much more likely to appear in the non-profit sector. All non-Asian workers have a taste for discrimination against Asians. Asian and non-Asian workers are equally productive.
Labor markets are competitive and there are no anti-discrimination laws.
This reduces demand for Asian labor. Given the assumptions, this leads to full segregation and equal wages for both types of employees. Racism doesn't disappear, but it doesn't have any impact on wages. A. Last case - suppose consumers don't like Asians. This does mean lower demand for Asian labor, and lower Asian wages, but the effect is probably small.