Opposition to the Civil Rights Act of 1991 was vociferous, with critics branding it a “quota bill.” That concern turned out to be unwarranted, but the legislation has hurt some of the people it was meant to protect, according to our study of pre– and post–Civil Rights Act employment data.
Proponents of this landmark legislation were as ardent as its critics. They hailed the act, which increased damage awards available to women and minorities who prove unlawful discrimination by employers, as an important tool for opening labor markets. By making discrimination more costly, supporters argued, the law would force greater fairness in dealings with protected workers. Earlier antidiscrimination provisions, such as the Civil Rights Act of 1964 and affirmative action, did, in fact, improve things.
The 1991 act, however, was passed in the midst of a significant shift toward firing-based litigation and away from hiring-based litigation. It took little account of the fact that one way an employer can avoid a large legal bill for firing a protected worker is simply not to hire that worker in the first place.
Our research documents three ways in which the act appears to have worked against protected workers in terms of employer response:
First, a decades-long trend of greater labor-market integration ended around 1991. Women and minorities had been making gains in historically unwelcoming sectors, but then employers became less willing to hire protected workers.
Second, employers are taking fewer chances on untested protected workers. The law makes it more expensive for managers to hire someone and then find out they made a mistake. As a result, businesses have tilted their hiring of protected workers toward those with track records because they present less litigation risk than their more sparsely credentialed counterparts.
Third, while the overall rate at which protected workers are terminated has remained steady, companies have changed how they terminate. For white men, the balance of firings and layoffs hasn’t changed. But black men have experienced a big reduction in firings and an offsetting increase in layoffs. In other words, a manager who wants to dismiss a protected worker may be more likely to wait until a downturn provides cover.
The upshot: While well-intentioned, the law seems to have had some negative consequences. Measures that ensure access to education or encourage hiring may do more to improve the lot of protected workers.