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Affirmative Action and the Costs of Diversity

In their 1993 Forbes article, “When Quotas Replace Merit, Everybody Suffers,” Peter Brimelow and Leslie Spencer determined that the “total shortfall” or cost attributed to federal compliance with affirmative-action policies and Equal Employment Opportunity Commission (EEOC) regulations was close to four percent of GNP or well over $225 billion. As the authors pointed out, the total economic cost of racial preferences and diversity in both the private and public sector is difficult to pinpoint in an aggregate sum, but is not impossible to calculate in terms of a reasonably reliable estimate. The following paper analyzes the economic costs to taxpayers as a result of federal compliance with affirmative action and equal employment-based regulations. Estimates show “that for every dollar spent on regulatory enforcement, about twenty dollars is spent on compliance costs by the private sector.” The policy implications of federal EEOC regulations apply an unnecessary burden in terms of direct and indirect costs to taxpayers, in addition to undercutting merit-based employment practices, and therefore Executive Order 11246 and subsequent regulations should be repealed.