Political transitions can have widespread implications on the way a society functions, and that is certainly true of the political landscape in the United States today, where the new administration’s sweeping legislative changes are turning economic and social policies on their head. Diversity, equity, and inclusion (DEI) programs in the United States are particularly vulnerable. In one of his first orders of business upon taking office, President Donald Trump signed an executive order that would end what he and his administration have called “radical and wasteful” diversity, equity, and inclusion programs inside federal agencies.
As part of the proposed changes, the Trump administration will hold monthly meetings with key agencies to “assess what type of DEI programs are still discriminating against Americans and figure out ways to end them,” an attempt to “dismantle the DEI bureaucracy.” Of the changes, the Equal Employment Opportunity Commission, which was established as part of the Civil Rights Act of 1964, has been overhauled by an executive order which says in part:
“Roughly 60 years after the passage of the Civil Rights Act of 1964, critical and influential institutions of American society, including the Federal Government, major corporations, financial institutions, the medical industry, large commercial airlines, law enforcement agencies, and institutions of higher education have adopted and actively use dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA) that can violate the civil-rights laws of this Nation.”
But what does this mean for the United States and what implications will it have once the transition is complete? There are clear advantages to DEI programs and doing away with these policies might also erase the decades of progress that have been made under them. Or, has DEI become enshrined in our beliefs and institutions to the point that these programs are no longer needed?
What is DEI and why is it under attack?
Diversity, equity, and inclusion is an institutional strategy to work toward fair, equitable and inclusive work environments and workplace cultures by identifying and dismantling systemic barriers in the interest of more diverse, equitable policies and attitudes. This means that regardless of gender, sex, age, race, religion, and sexual orientation, people would have the same opportunities as everyone else.
These programs are demonstrably successful and have worked to reduce the barriers to entry for many traditionally marginalized peoples while also making businesses more profitable, innovative, and viable. Many of these programs were instituted as a strategy to champion workplaces that actively worked toward not just equality, but equity, a moving goal that required continuous attention to ensure that policies remained relevant with the times.
There is good reason for doing so, too, with a direct correlation between diversity and profitability. An article titled The Business Case for Gender Diversity: Why Gender Balance is Key to a Successful Business Strategy emphasizes why DEI is a smart business strategy. According to the article, which draws from a McKinsey study (How diversity, equity, and inclusion (DE&I) matter | McKinsey), companies with greater gender diversity are 21 percent more likely to be profitable.
Another article, Why Is Diversity and Inclusion Important? Explore Key DEI Stats shows that organizations in the top quartile for gender diversity found even greater results, with 25 percent or greater likelihood of financially outperforming their peers, while ethnic diversity saw a 36 percent or greater chance of the same.
The more diverse companies are, the more productive they are—often to the tune of 35 percent more—and diverse operations were found to make better decisions 87 percent of the time. Further to the financial aspects, DEI programs lead to better employee and customer attraction and retention efforts, particularly for the younger generations.
Initiating a shift
Certainly, there are many advantages to having an inclusive, equitable, and diverse workforce and policies that support these ends. Companies who maintain a diverse workforce and design and adopt policies that promote fairness and inclusion see improved collaboration, greater rates of innovation, stronger recruitment and retention, and improved employee and customer satisfaction and engagement. Without question, it adds value to an operation.
Now, however, these programs are under attack by many major corporations like McDonald’s, Ford, Walmart, John Deere, Meta, and Amazon, who are in the process of eliminating diversity programs (though what is interesting to note is the fact that these programs are being replaced by strategies that carry different names but promise almost the same desired outcomes). For instance, Meta will replace its nixed DEI program with a “focus on how to apply fair and consistent practices that mitigate bias for all, no matter your background,” which ironically, sounds a lot like a program promoting diversity, equity, and inclusionary practices—most likely because of the amazing benefits these kinds of programs bring.
With the news of Meta shifting its focus from diversity, equity, and inclusion, to diversity, equity, and inclusion by a different name, one can assume that people are not necessarily opposed to the principles embodied by these programs, but more so the labels used to describe them.
Room for change
The 30 million small businesses in the United States represent the vast majority of U.S. businesses, employing 59 million Americans and driving the economic strength of the nation. Given this, at a time when major companies are moving away from these programs, small businesses still have a role to play and can have a resounding impact on the positive outcomes of strong DEI programs. But, if you ask most small business owners, as much as they would like to be more diverse, equitable, and inclusive, they are not doing as much as they can and the environment surrounding these conditions has just been made worse.
Representation matters in a very big way. Employees tend to mirror the founder or leadership team’s race, ethnicity, and gender, so the more diverse a company’s leadership, the more diverse its workforce will be. Unfortunately, one of the common failings of DEI programs is that the committees and efforts are composed of members of the underrepresented groups themselves, with few non-minority voices at the table—and successful such programs require a collaboration between all people. It is not up to the minorities on staff to take on the burden of instituting improvements for the benefit of the collective; this often leads to fatigue for those involved and becomes counterproductive.
This is not always intended to “pass the buck” so to speak, as some non-minorities don’t want to take up space and are unsure how they can contribute to these programs or committees—but diversity is intended to include the representation of all groups. In a way, not wanting to take up space is a sign that the diversity, equity, and inclusion efforts have been working, as there is a growing recognition of the barriers and the roles that everyone must play. But it should not go so far as to make people feel excluded, as that would go against the original intention.
Sharing the wealth
Where these programs are instituted and operate with some semblance of structure, function, and outcome, they are having positive outcomes on the productivity, innovation, and profitability of businesses and make them more attractive to job seekers and customers alike. Diversity, equity, and inclusion programs have also enabled wealth-building for minority groups and traditionally marginalized peoples and have done so without compromising the wealth of non-minorities.
Post-pandemic, thanks to specialized funding mechanisms, Black business ownership increased 14.3 percent while Black wealth grew more than 30 percent in employer firm revenue, but there still exists low representation in employer firms. All of this to note that while Black Americans were seeing their positions improve, it was not at the expense of others’ wealth, which also grew during the same time.
By ensuring that minority groups and marginalized peoples have access to their share of opportunities and wealth, it ensures that there are more people at the table to share the positive outcomes of such programs. It seems that any attempt to diminish their value and effectiveness is not being done with the best intentions of a business in mind, but rather from an uninformed perspective that is based in fear and prejudice.
