Diversity & Inclusion
Opportunities and gains need to be shared equitably among all workers and business leaders to ensure strong, ongoing economic growth. But gender and racial inequality remain prevalent in our economy. Much of this inequality stems from long-standing, structural inequities in the economy that have kept certain groups from having a fair chance to get ahead. These inequities continue to be a problem today, and they hold back the entire economy. America cannot succeed if a large portion of its people cannot take their rightful place in the workforce and bring their skills, talents, and motivation to bear.
The pay gap between men and women continues: In 2015, women earned, on average, 78 cents for every dollar earned by men. And this gap is greater for women of color: African-American women earn 64 cents, and Latina women 56 cents, for each dollar earned by white men. But however you look at it, the potential income losses are staggering: The pay gap could cost as much as $490 billion in annual income, according to one estimate from the National Partnership for Families and Women.
Even as advocates in government, professional organizations, and the business community work to bring more women into the C-suite, the highest levels of corporate America severely lag in racial diversity and inclusion. Though numerous studies show that diversity and inclusion is good business, just over 4 percent of Fortune 500 CEOs are minorities, including African-Americans, Asians, and Latin-Americans. In 2015, only four Black CEOs lead America’s top companies, a percentage that has declined steadily since 2007 when there were a whopping seven.
Meanwhile, women held only 14 percent of leadership positions in the Fortune 500 as of 2015. Only 24 corporations had female CEOs, and only one corporation was led by a woman of color. This, despite the fact that women of color will be the majority of women by 2050. Companies suffer as a result: a study by Catalyst found that, from 2004 to 2008, companies with more women board directors delivered higher returns on sales, invested capital, and equity. A 2013 study of the Fortune 250, meanwhile, showed that minority groups were gaining more representation on corporate boards, but were still under-represented, with 13 percent total for both men and women of color. Yet studies going back as far as 1998 have found that companies with more women and minority directors delivered higher shareholder returns.
In a globalized economy, the unique opportunities and challenges of meeting global demand, require more representative leadership, a diverse workforce, and diverse suppliers. Smart businesses know that retaining and motivating good employees means treating them fairly. They know that leveraging diversity and inclusion stimulates innovation and allows for a broader set of views on customer needs, products and services, and faster company growth. And they know that, without diversity and inclusion, businesses will continue to leave potential sales or investments on the table. These opportunities are waiting. Governments and businesses need to recognize that equality is a smart economic move that ensures a thriving ecosystem for business, workers and customers.