Did Anyone Calculate the Unintended Consequences of Affirmative Action in Canadian Hiring?

It’s not like inequality has completely disappeared from Canadian life. The famous Oreopoulos study from 2011 involved sending thousands of randomly manipulated job applications in response to Toronto job openings. They discovered unaccountable discrepancies between groups receiving interview opportunities.

And official statistics still point to visible minorities taking home less income than their non visible minority peers. Minorities are also less likely to be employed.¹

However, the Oreopoulus study mostly focused on immigration status rather than race. And those Statistics Canada numbers didn’t provide direct evidence associating such differences specifically with racial discrimination. You’d have to account for multiple confounding variables before you could demonstrate a causal relationship. Those’ll include:

• Ethnic minority communities in Canada skew younger

• Ethnic minority communities in Canada include more recent immigrants

• Because more of them are immigrants, such communities face greater educational and credential recognition challenges

• Ethnic minority communities in Canada are often excluded from large urban centers (where higher incomes and better job openings are found) due to higher urban costs of living

• For cultural or social reasons, ethnic minority communities in Canada might concentrate in industries with anomalous employment opportunities (like the gig economy)

• For cultural or social reasons, ethnic minority communities in Canada might gravitate towards self-employment at different rates and for different reasons

In other words, I’m not sure anyone has successfully demonstrated that existing employment and income disparities are caused by racism in any measurable way, rather than some combination of unrelated factors.

Assuming that’s true, persisting with affirmative action policies would, at best, deliver minimal real-world benefits² along with serious costs. What kinds of costs could we be talking about?

A recent high-profile article detailed significant and - in the U.S. - illegal harms caused to white males seeking work in the entertainment industry. We know such harms have been inflicted far beyond Hollywood because public and private sector employers have been boasting about rejecting merit-based hiring practices for years.

The shift in the narrative in the U.S. has attracted armies of labor lawyers with dreams of massive litigation settlements.

The same reverse discrimination has, of course, been going on in our hiring markets for just as long as in the U.S. But don’t expect to see any successful lawsuits. That, as I’ve written previously, is because Section 15(2) of the Charter explicitly protects affirmative action and equity programs so long as their “object [is] the amelioration of conditions of disadvantaged individuals or groups”.

That’s true for the public sector. But, for various reasons, it’ll also be be the case for federally regulated employers or even regular employers who are subject to provincial human rights codes.

Shareholders could, in theory, sue on behalf of a company if directors’ decisions were shown to have caused economic harm, such as reduced productivity or sales. Similarly, if a public company misrepresents or fails to disclose hiring policy-related risks that later harm performance, shareholders can file class actions under securities laws.

But meeting the required standards of proof for such attempts would not be easy. And none of that would be all that helpful for the actual victims of such discrimination.

On the other hand, I believe someone would have a very hard time proving that current hiring practices actually do lead to “the amelioration of conditions of disadvantaged individuals or groups”. The trick would be finding a way to test that in open court.

This is developing into something of a common theme in my posts here on The Audit: policies designed with the very best of intentions often become law despite the fact that no one bothered to anticipate and prepare for the unintended consequences. Entire classes of victims are created and vast harms are imposed.

As often as not, the original problem isn’t solved. In some cases, it never actually existed in the first place. But the policy continues, with the social, legal, and financial costs piling up ever higher.

Here are some earlier examples:

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1. There is something a just bit weird going on here: I see higher employment rates for the “visible minority” population (64.3 percent of minority males are employed and 54.9 percent of minority females) than for the “not a visible minority” population (59.8 percent and 52.9 percent). On the other hand, minorities have statistically higher unemployment rates (11.4 percent of minority men are unemployed and 13.6 percent of minority women) against just 9.4 percent and 9.6 percent of male and female non-minorities. What’s probably going on here is visible minority communities participate in the labour market at higher rates. That’s partly because their populations likely include a higher proportion of individuals who are immigrants or younger - both demographics with a high correlation with labour market participation.

2. In fact, there’s serious evidence suggesting that a quarter century of employment equity programs haven’t actually had much impact at all on ethnic minority work experiences.