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WITHOUT EQUAL EMPLOYMENT LAWS, SMALL BUSINESSES HIRE FEWER BLACKS STUDY SAYS
EAST LANSING, Mich -- Small businesses are more likely than large employers to be guilty of discriminatory hiring practices where black job seekers are concerned, according to a study by a Michigan State University economist.
The study of some 3,000 employers in four major U.S. cities indicates that small businesses are much less likely to hire blacks than are larger businesses.
"The findings of this study suggest that if smaller establishments hired black applicants in the same proportions as larger ones, there would be substantial increases in the employment and earnings of blacks," said Harry Holzer, professor of economics and author of the study.
Holzer cites several possible reasons for the discrepancy, the most significant being the fact that smaller companies are not covered by Equal Employment Opportunity laws whereas large businesses are.
Holzer said that even among the large firms that are covered by EEO laws the largest ones are more clearly visible, thus face greater risks of class action lawsuits or bad press.
Other reasons include the fact that smaller business are less likely to use affirmative action or to have black customers. They are also somewhat less likely to be located in central cities, near public transit and near black residential areas; they are less likely to have collective bargaining; and they are more likely to use informal recruitment methods.
The data used in the study came from a survey of employers that was administered between June 1992 and May 1994 to more than 3,000 employers in Atlanta, Boston, Detroit, and Los Angeles.
Holzer notes that these results suggest that there is a strong need for policy makers to devise remedies for employment discrimination at small establishments.
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