Final answer:
Institutional discrimination refers to discriminatory outcomes stemming from the policies and practices of organizations and governments, which can include exclusion and the promotion of privileges for dominant groups. In labor markets, it may result in unequal pay or job opportunities for equally qualified individuals based on race or gender.
Step-by-step explanation:
Institutional discrimination occurs when the practices, rules, and policies of bodies such as corporations and governments have discriminatory outcomes. This form of discrimination is often embedded within the very structure of societal systems, leading to disenfranchisement of certain groups. For example, historical policies like the U.S. military's 'don't ask, don't tell' reflected institutional regulation that resulted in the nonacceptance of minority sexualities.
Institutional discrimination isn't only about exclusion; it often involves the promotion of a dominant group's status, known as privilege. A common manifestation of this is white privilege, where benefits are accrued simply by belonging to the dominant racial group. Recognizing and understanding the facets of institutional discrimination in various contexts, such as the labor market, is essential to addressing it.
In the labor market, institutional discrimination can lead to individuals with equivalent skills and experience, as measured by education and expertise, receiving different pay or job opportunities based on race or gender. Distinguishing between disparities resulting from current or historical discrimination is crucial in devising interventions to reduce inequality.