For more than a half century the federal government has enacted countless laws and issued thousands of administrative decrees to promote racial equality. Central to this quest has been the doctrine of “disparate impact” (based on Title VII of the 1964 Civil Rights Act) that holds that any job requirement a business of at least 15 employees has that disproportionately harms blacks, might be punishable as racial discrimination. In the landmark case of Griggs (1971) for example, the Supreme Court held that requiring all applicants for a power company lineman job to have a high school degree was racially discriminatory since blacks were less likely to graduate high school. Crucially, the burden of proof was on the employer to demonstrate that the requirement producing the disparity was essential for the job, a difficult hurdle to overcome.
Nevertheless, despite decades of this and similar measure, progress has been slow, if at all, yet Washington remains steadfast in forcing businesses to hire blacks, even if businesses resist. Tellingly, there is no pretense that this compulsion helps business, and one might be reminded of parents forcing junior to eat his vegetables or else.
The latest example of enforcing disparate impact involves Sheetz, a chain of 700 stores with 23,000 employees that features fast food and snacks in six states. According to the Equal Employment Opportunity Commission (EEOC) complaint, this privately owned firm discriminates against blacks by automatically rejecting job applicants having criminal records. The EEOC alleges that it is discriminatory since blacks comprised 14.5% of those rejected for this reason versus less than 8% for whites. The EEOC further demands Sheetz offer jobs to all blacks previously denied employment plus back pay and benefits. There is, however, no indication of how many blacks were discriminated against, and Sheetz has denied all wrongdoing.
This “helping hand” to blacks will impose billions in costs to Sheetz and tens of thousands of other retail businesses and is thus a de facto tax on Americans, blacks included. Since only former criminals benefit, the edict is comparable to no-bail reform and de-funding the police in terms of helping the criminal class.
This EEOC edict ignores the seriousness of employee theft. Blatant shoplifting garners news coverage, but according to the National Federation of Independent Businesses, a store employee was 15 times more likely to steal from the store than a non-employee. The U.S. Department of Commerce estimates that a third of all business failures resulted from employee theft or fraud. In addition, nearly two-thirds of businesses are victims of employee theft but only 16% of these thefts are reported. The National Retail Federation estimated that in 2019 the average theft was $1,240 per employee. Given that this thievery almost entirely comes from those without a criminal past, it would undoubtedly skyrocket if ex-cons were hired.
Employee crime is also difficult to prevent since dishonest employees have countless options, ranging from just taking cash from the register or going home with concealed merchandise. Devious employees can also misrepresent their working hours, take unrecorded breaks, or just waste time chatting on cellphones, all of which cost employers money. Employees can also collude with friends to under-ring sales and then sell this “free” merchandise. They can also ignore shoplifting by confederates, plus stealing customer credit card numbers, client lists, and payroll data that includes social security numbers.
Large retailers have multiple anti-theft measures, but small businesses are more vulnerable. And, catching culprits hardly ends the store’s cost since firing an employee, even if caught red-handed, may invite litigation, especially if the employee belongs to a legal protected group. Better to “fire” the thief by reducing hours, assign unwelcome tasks, and otherwise make life uncomfortable so he voluntarily quits. But, if the thief files a complaint with the EEOC or a local human rights agency, the store’s defense may run to thousands of dollars.
Businesses are not totally defenseless. They can avoid areas with a large black population, outsource tasks such as payroll to contractors, avoid selling merchandise that invites thievery, and minimize cash transactions. Some might migrate to the internet or market their products through Amazon. The doomsday option is closing the store, a tactic that has exploded as shoplifting has grown on an industrial scale. Unfortunately, closing a store is better suited to Walmart and similar big box merchants than locally owned smaller enterprises, but rampant employee thievery may leave no choice.
Compelling employers to hire blacks with criminal records can, ironically, devastate black communities. Crime means higher prices for those with the lowest incomes while fewer businesses reduces jobs for hard-working blacks without criminal records. Yes, though many retail jobs seldom pay well, they nevertheless may be valuable sources of extra income (and health insurance) for struggling families. Even entry level jobs can be résumé-building stepping-stones. Stock clerks at Walmart can become department heads and, eventually, store managers who can earn as much a $170,000.
The exodus of retail also means a shrinking local tax base and with this decline, localities must trim expenses in education, law enforcement, and social services, or beg for national or state handouts, so store-closing reduces local political autonomy.
Surely EEOC bureaucrats must know this reality and the feeble economic benefits of imposing it, so the question is “why?” Why not just raise business taxes and redistribute the money to blacks via welfare payments or enhanced social services? Conceivably, however, enforcing the disparate impact doctrine is more a punitive measure directed at small businesses. Now a government official can be anti-capitalist under the guiles of “helping society.” Destroying capitalism on the sly, so to speak.
In the long quest to achieve racial equality, the federal government’s mission has expanded to include multiple other “protected” groups, and the end is hardly in sight. The EEOC even actively promotes claims of discrimination. In 2021, for example, the agency conducted some 186 outreach events among LGBT+ groups explaining how to file formal complaints. What’s next? Obesity? Tattoos? The possibilities are endless. Here the latest mission statement from the EEOC according to its website:
You have a right to work free of discrimination. This means that your employer cannot make job decisions because of your race, color, religion, sex (including pregnancy, sexual orientation and gender identity) national origin, disability, or genetic information. Your employer also can’t discriminate against workers who are 40 or older based on their age. This right applies to all types of job decisions, including hiring, firing, promotions, training, wages and benefits.
A sword of Damocles now hangs over nearly every American business since it undoubtedly has at least one disgruntled job applicant, employee, or fired worker convinced that he, she, or it was the victim of discrimination and relief is only a telephone call away at 1-800-669-4000. What began as help for blacks has metastasized into a futile quest for Utopia.
Remember the line, “He has erected a Multitude of New Offices, and sent hither Swarms of Officers to harass our People and eat out their Substance.”
The quote is from the Declaration of Independence and is directed against King George III. And the colonists thought that they were besieged by Swarms of Officers. Thomas Jefferson, call your office. We need an update.
Public domain.
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