Suppose that there are just two groups of people from which employers can recruit employees. The two groups are identical in every respect except two.
- In the first case, the people in Group B work for a lower wage than do the members of Group A.
- In the second case, the people in the two groups bear physical marks so that employers can readily whether a candidate for employment belongs to Group A or to Group B. The marks are otherwise insignificant. The physical features cannot possibly interfere with a person’s ability to perform any task.
Except for these two differences, the members of Group A differ not at all from the members of Group B. The interests, talents, aspirations, habits, and character traits of the people in Group A exactly match those of the people in Group B.
In such a world, why would an employer ever hire a person from Group A? Such a choice burdens the employer with a greater cost without any greater productivity to pay those costs.