What would you do if you found out your company was treating some employees worse than others based on race or ethnicity?
That depends.
If, like most Americans, your thinking lines up with that of Civil Rights icon Martin Luther King, Jr., you would be inclined to look for ways to stop the discrimination. If, however, you align with today’s “anti-racism” prophets like Ibram X. Kendi, you might instead find yourself proposing more – not less – discrimination as the answer.
In his best-seller, “How to Be an Anti-Racist,” for example, Kendi asserts that “[t]he only remedy to past discrimination is present discrimination. The only remedy to present discrimination is future discrimination.”
Unfortunately, it’s Kendi’s – not King’s – vision that has been foisted upon the American public in recent years.
Presented most often under the heading of “diversity, equity, and inclusion” (DEI), this grievance-based ideology reached its high-water mark in the summer of 2020. That’s when major corporations, publicly funded universities, public figures, Hollywood and more scrambled to signal that they were on the “right side of history” by embracing DEI and “doing the work” of anti-racism.
Since then, however, the Black Lives Matter-fueled popularity of DEI has experienced a Black Tuesday-style market crash. The Supreme Court’s recent rulings in Students for Fair Admissions v. Harvard, Groff v. DeJoy, and City of St. Louis v. Muldrow have led to a sustained legal assault and created increased legal risk for a broad array of DEI initiatives, including discriminatory scholarships and mentoring programs, employee resource groups, mandatory trainings, and workforce and compensation quotas.
Formerly beloved American companies like Bud Light, Target, and Disney sustained billions of dollars in losses by foisting DEI on their consumers. And Robby Starbuck’s highly successful public exposure campaign has resulted in Tractor Supply, John Deere, Jack Daniels, Ford, Toyota, and many others disavowing DEI in recent months.
Even last year, the Wall Street Journal reported that the demand for DEI directors was the lowest an executive recruiter had seen for a role in 30 years. The booming success of Matt Walsh’s “Am I Racist,” which is now the top-grossing box office documentary in the past decade, is further proof that DEI is fast becoming a liability for a public increasingly fatigued by and skeptical of the approach.
Add to that The New York Times Magazine’s devastating exposé of backfired DEI policies at the University of Michigan this October. Over the past 10 years, the outlet reported, Michigan has gone all-in on DEI, investing $250 million to put the philosophy front and center on campus.
But as anyone who has been forced to attend a mandatory DEI training could tell you, Michigan students and faculty are more divided than ever. Crucially, the article cites a 2022 campus survey that found students “less likely to interact with people of a different race or religion or with different politics – the exact kind of engagement D.E.I. programs, in theory, are meant to foster.”
That’s a damning indictment of DEI. But it also reflects our research in the corporate arena, where a plurality of those surveyed (40%) saying that DEI divides rather than unites colleagues, and the same number confessing they are less likely to trust others or feel included at work as a result of DEI-based employee programs.
The DEI stranglehold on corporate America remains strong. Alliance Defending Freedom’s 2024 Viewpoint Diversity Index found at least 91% of the largest tech and finance companies still deploy DEI in their employee training and 58% impose similar practices on their vendors. But it’s clear that this ideology is on borrowed time.
Maybe that’s why Rep. Robert Garcia (D-CA) recently led an open letter, signed by 49 Democratic members of the U.S. House of Representatives, that implored business leaders to give the failed strategy another go. Tellingly, the letter’s best attempt at making a business case for DEI relies almost entirely on assertions from McKinsey & Company – a consulting firm whose most well-known claims about the effectiveness of DEI in the workplace were debunked by scholars writing at the Econ Journal Watch.
In response, 17 state financial officers and a coalition of investors, financial advisors, and fiduciaries representing over $65 billion in assets under management sent separate letters of their own to corporate America, urging decision-makers at S&P 500 companies to steer clear of DEI.
The letters rightly called attention to the many legal, political, and reputational pitfalls of DEI and emphasized that they, on behalf of their shareholders and citizens, want the companies to succeed.
Despite political appeals to the contrary, business leaders should not bail out DEI. I, like most other Americans, believe that businesses will succeed by providing excellent goods and services, avoiding divisive political issues, and supporting fundamental freedoms like free speech and religious freedom that benefit every American.
