I'm surprised the 1st graders even know stuff like Muslims, Pakistanis and such let alone bully another child on that account. I have three kids ages, 9, 5 and 2 and let me tell you they only know disney and tween shows, silly cartoon videos on YouTube etc.
bullying in schools can happen to any kid based on any number of things. being too skinny or being too big, too shy, less shiny clothes and so on.
Recently a story came out of New York area, Staten island to be exact where a 12 year old kid (white) committed suicide because he was too large and other kids and even the coach picked on him and bullied him. As a parent, I cant tell you how much it broke my heart and saddened me.
schools across America have taken number of initiatives in collaboration with the police and social services to tackle the bullying problem. I'm sure this 1st grader's bullying incident will be investigated throughly and steps taken to reduce such further incidents. Note that I said "reduce" because bullying cannot be fully eliminated.