I think it may result in more overt raciscm, but actually reduces the depth of the racism through contact. So called ‘inter-racial’ relationships increase in diverse communities, while segregation strengthens the perception of stereotypical differences.
Even when ‘race’ is removed from the argument, cultural differences still exist. People who see other people as members of groups will tend to have group biases.
Just a few observed behavior patterns:
Privileged recent college grads who have never had exposure outside of typical upper middle class American suburbia giggling over racist jokes. Not jokes that have humerous attributes if you changed the categories, instead jokes that simply degrade other people. Then they said this was a nostalgic thing about their high school days. So maybe their way of coping with the onslaught of reality following college was to look fondly on the times when they considered themselves superior to some sub-human others. Great, what a future.
An older woman lived her life in a poor urban area and spoke the basic predjudices of her peers. When I commented that I considered people individually and disregarded stereotypes, she admitted that her daughter married a Puerto Rican man, and he was fine husband. She seemed to use racist language as a social meme, but as I learned more about her, found her to be more open-minded than she sounded.
An assisted living facility where the some in the group that ate meals at the second serving had disparaging comments about the type of people who ate at the first serving. One hour between meal times was the only difference I could identify between the groups. So draw a line anywhere, and somebody will see it as an ‘us or them’ situation.
Here in RI (Rhode Island, reading the OP was messing with my pattern matching), there are numerous groups, often segregated to some degree, in a small area. We have distinct groups of (using their terms), Irish, Italian, Portuguese, Black, Canucks, Swamp Yankees, Puerto Ricans, Guatemalans, Indians (American), and more I’m sure. And within these groups there are demarcations, for the Portuguese, 1st or 2nd generation, Portugal or the islands, Warwick or Cranston. And between and within the groups there is no shortage of people who complain about others being biased towards them, with no hesitation in expressing their bias against some other group. Yet people call me an asshole (Ok, I am one, but at least I don’t do that).
A guy I work with has a very dark face, almost alone among a group of otherwise very diverse people. He doesn’t attend many social events, not because of any sign of prejudice I’ve seen on his part, I think he just feels uncomfortable being noticeably different in appearance, and also culturally unique.
So I don’t know what this all adds up to. I think it’s obvious that the ‘us vs. them’ mentality is at the heart of all prejudicial behavior, and gets reinforced by those who find rationalizations for it, but what to do about is a tough call. I do what I can by not playing the game, and letting people know I’m not shy about pointing these things out. If anything else works, I’m all for it.