[U]nfounded prejudice is unstable in a competitive market for labor.
Ah, if only this were true. This assumes the market is ultimately a meritocracy, and I don't think the evidence supports that assumption. And even if it were, inefficiencies in a market can persist for a very long time. While conscious, ideological racism is less common today, unconscious racism is a virtually universal feature of human behavior, affecting all corners of the job market. Adam Smith's invisible hand isn't going to fix job discrimination.
Ah, if only this were true. This assumes the market is ultimately a meritocracy, and I don't think the evidence supports that assumption. And even if it were, inefficiencies in a market can persist for a very long time. While conscious, ideological racism is less common today, unconscious racism is a virtually universal feature of human behavior, affecting all corners of the job market. Adam Smith's invisible hand isn't going to fix job discrimination.