More satisfaction than money

Those who insist a market solution is available for every problem (I don't agree at least in the cases on health care, education, and national infrastructure) say that discrimination should be handled by market forces. Ari Ezra Waldman summarizes the argument this way:

Laws that ban workplace discrimination are unnecessary because any company that discriminates for irrational reasons (on the basis of gender, race, religion, and so on) are not hiring the best and brightest. By not hiring the best employees, these companies will suffer when competing against firms that do not discriminate and hire the best workers regardless of personal characteristics that have nothing to do with their productivity. When the discriminatory firm is faced with revenue loss or loss of market share or business failure, it will drop its discriminatory hiring practices in order to survive. Therefore, anti-discrimination laws unnecessarily impose government regulation where the free market should function efficiently, weeding out discriminators for economic ruin.

Waldman sees three problems with that argument.

1. Discrimination (such as against gay workers) may bring more satisfaction to the employer than the increased profits would.

2. Yeah, we're fabulous, but not so fabulous that our absence from a workplace will make much difference. Discriminate against women and your employee pool drops by 50%. Discriminate against gays and your employee pool drops by about 2%.

3. That nearly all big companies now have non-discrimination policies does not imply causation -- they may not have done it for purely economic reasons. As long as the society thinks it is acceptable to discriminate against gays an employer may not realize there is an economic advantage (sigh, however small) to hiring gay people. A law is a way for a society to say gays are not second-class citizens, even if it takes a generation or two for the general populace to agree.