If it means anything, it means that they are willing to pay higher wages to members of liked groups and lower wages to members of disliked groups assuming their marginal productivity is the same . The last point is crucial. You can't compare average wages of different groups, and assume the lower-paid group is the victim of discrimination. You have to control for differences in training and ability. D. Now suppose that employers dislike the Irish even though they are just as efficient as non-Irish.
Irish wages are according lower.
Under these conditions, the less prejudiced an employer is, the higher his profits. Greed provides a strong incentive to judge people based on their marginal productivity. In the long-run, the least prejudiced employers come to dominate the market because they are consistently more profitable. In this case, the simplest solution for a greedy employer is segregation. H. Last, consider discrimination by consumers .