By John Wang, Michael J. Garner and Marcela Miguel Berland
Two weeks after The Supreme Court voted to end affirmative action in higher education, 13 state Attorneys General issued a letter warning corporate America that hiring practices based on diversity, equity, and inclusion (DEI) may also be categorized as illegal racial discrimination.
These state Attorneys General could not have been more wrong in their understanding of the purpose and resulting effects of DEI policies and practices in corporate America today. They have also failed to notice the dramatic transformation in our nation's demographics, society, and economy in the 21st century.
As leaders of two major organizations, the Asian American Business Development Center, One Hundred Black Men, and President of a leading research firm, Latin Insights, each with deep roots in its respective ethnic community, we have witnessed the historical ups and downs of corporate America's attitude and adoption of diversity, equity, and inclusion policies and practices in the past two decades.
According to the U.S. Census Bureau, the U.S. population will undergo a profound change during an expected expansion from 310.2 million in 2010 to 439 million in 2050. The ethnic makeup of the population will shift from 65% White, non-Hispanic down to 46%; while the traditional minority population will make up 54%, with 30% Hispanic, 12% Black, 8% Asian and 4% Native Hawaiians and Pacific Islanders, Native Americans/Alaskan Natives. This majority of minorities will become the New Majority.
What is even more significant is the explosive growth of the Hispanic American, African American and Asian American markets. Since 1990, the University of Georgia’s Selig Center for Economic Growth has been tracking the buying power of the minority population in its Multicultural Economy report. The 2021 Report estimated that the Hispanic market is the largest minority market in the U.S. and its spending power grew to $1.9 trillion in 2020. The buying power of African Americans rose to $1.6 trillion and Asian Americans, including Native Hawaiians and Pacific Islanders, have a buying power of $1.3 trillion. With a combined total buying power of $4.8 trillion, it is the fourth largest economy in the world.
With these changes in mind, today’s corporate leaders must recognize and develop the kind of workforce that is equipped to respond to the shifting demographic composition of America. The recognition of this trend is immensely important and should be on scale with national security issues, climate change questions, issues related to our economic transformation, and the roles technology and social media play in our country’s evolution.
One of our country’s preeminent business leaders, Jeff Gennette, CEO of Macy’s, explained Macy’s approach to Diversity & Inclusion: “We intentionally manage our programs to ensure that D & I is integrated into every aspect of the company.” Specifically, Macy’s has organized D & I work into five focus areas, each with specific goals and Key Performance Indicators:
Build a diverse and inclusive workforce
Ensure a diverse merchandising and supplier base
Reflect the diversity of our customers in our marketing
Strengthen our community partnerships
Ensure every customer has a great experience in our stores
Thus, D & I is engrained in Macy’s growth strategy with clear and measurable goals. It has strong leadership, and unwavering commitment from the top.
Furthermore, a unique feature of the 21st century is the rise of developing economies in Africa, Latin America and Asia into regional and global economic powerhouses as they benefit from the globalization of the marketplace. While some may view this development with alarm, as a challenge to the United States’ position as the leader of the world economy, the truly pragmatic business visionaries will see this as an opportunity. It is obvious that the New Majority communities will be able to provide valuable resources to bridge these new markets.
The New Majority will become the mainstream of future economic power, fueled by the workforce, customers and business partners. To be successful, U.S. businesses must take full advantage of the opportunities that exist when this key stakeholder group is included as part of their corporate strategies and actions. In addition, through culture, family and network ties, the New Majority will offer a portal into the African, Latin American and Asian markets, a process that has already begun with increased globalization.
Other CEOs have not only acknowledged the importance of engaging with, and nurturing this New Majority reality, but have taken on personal accountability for DEI practices. Most prominent is the CEO Action for Diversity & Inclusion coalition, formed in 2017 by Tim Ryan, the U.S. Chairman and Senior Partner of PwC. CEO Action is the largest CEO-driven business commitment to advance diversity, equity, and inclusion. More than 2,400 CEOs have signed the initiative’s pledge. Without question, leading from the top promises to have a monumental influence in the workplace and will spur economic growth and societal well-being.
The continually increasing buying power and consumer muscle of the Asian, African, and Latin American communities present important implications for how businesses will operate, sell, recruit, and grow in the future. This trend will invariably provide new opportunities for New Majority professionals and business owners to exert greater influence and succeed in meeting 21st century business challenges.
We believe that any abandonment of DEI practices in corporate America will be detrimental to the future of America’s companies. As leaders of the New Majority who have seen the many benefits that our constituents bring each day to make this nation more successful, more competitive and more future-proof, we ask business leaders to stay the course and support DEI.
John Wang is Founder and President of Asian American Business Development Center; Michael J. Garner is Chairman, Corporate Advisory Board of One Hundred Black Men; and Marcela Miguel Berland is the founder and President of market and research firm Latin Insights.