Diversity Doublespeak

Goldman Sachs values many things—money most of all—but you might be glad to hear that it also values diversity. “We strive for excellence,” they tell their clients and potential employees. “To ...

Goldman Sachs values many things—money most of all—but you might be glad to hear that it also values diversity. “We strive for excellence,” they tell their clients and potential employees. “To achieve it, we must have the best people, and the best people are drawn from the broadest pool of applicants.” Goldman is not alone. Virtually every Fortune 500 company’s website features some similar statement about a commitment to diversity. Sadly, however, the way such companies think about that diversity is impoverished: they hew to a very specific set of characteristics that they use to define “the best.” They acknowledge, of course, that those characteristics can be found across a broad pool, from which they will draw. But they rarely describe that “broad pool” itself, or, god forbid, use the words “race,” “class,” or “gender.” I found no firm that expressed any interest in examining how a diverse pool might bring in skills different from those they’re already looking for. These masters of the universe, after all, know what’s best, and what they’re looking for.

Still, most large corporations now have a Chief Diversity Officer (CDO) or some kind of Diversity Leadership position, and this is nothing short of a revolution—if more in rhetoric than practice. Though women have been completing college at higher rates than men for more than 20 years now, and make up half of the managerial and professional workforce, women occupy only about one-fifth of senior management positions and less than one-sixth of corporate board memberships. Fewer than one in twenty CEOs is a woman. If we look at Black Americans, the situation is even more dramatic. Today, less than 1 percent of Fortune 500 CEOs are Black. Corporate America’s position suggests a belief that maybe Larry Summers was right. Perhaps “the best” just aren’t found among female, to say nothing of Black, candidates.

This might lead us to believe that diversity programs are simply a public relations stunt, aimed not at fundamentally changing the demographics of corporations but at deflecting criticism. I suspect there’s something to that theory. Yet a group of scholars has begun to delve into just how organizations think about diversity, and they provide us with a very different explanation, and a far more nuanced portrait.

Ellen Berrey, a sociologist at the University of Denver, spent six years studying how universities, housing redevelopment programs, and corporations make sense of and apply the logic of diversity. Her book, The Enigma of Diversity, is an impressive achievement. Part of her book takes us into the diversity management program of an anonymous multinational public corporation (one of the Fortune 500, with more than 100,000 employees in 80 countries and revenues of $35 billion). Berrey shows how diversity management is increasingly central to how corporate organizations understand themselves, but is rarely reflected in substantive changes that would be the most likely to promote diversity. This understanding of diversity is akin to inviting formerly excluded people to live in a house, but refusing to change anything that would make their living there more comfortable. It can also mean, as Berrey shows, redefining the very idea of diversity—divorcing it from its origins in civil rights and struggles for opportunity and framing it instead as a kind of competitive advantage. Goldman Sachs’s diversity initiative perfectly represents Berrey’s argument: “We believe that working towards a more diverse workplace will both benefit the firm and help us to more successfully meet the needs of our clients.”

So, if firms like Goldman actually believe in the competitive advantage of diversity, why aren’t they more diverse? Federal data show that white men have long dominated management-level jobs in financial services, and even though they’ve increasingly embraced the language of diversity, little of their practice has changed in decades. Looking at investment bank hiring last year, we’re not given much hope for the future. Eighty percent of those hired at Wall Street’s biggest firms were men, and just 5 percent were Hispanic or Black (these groups make up almost 30 percent of the US population).

While banks’ practices may not be helping them achieve diversity, their rhetoric reflects what has increasingly become a consensus within the research community. Scholars have shown how diversity can deflate price bubbles, drive economic growth, increase market share, and promote innovation. We have a bit of paradox. Firms have fully embraced the language of diversity, we increasingly know that diversity is beneficial, and yet firms have failed rather magnificently at achieving it. What are America’s most elite firms doing?

Fortunately, in her new book, Northwestern School of Management professor Lauren Rivera takes us behind the scenes of America’s top investment banks, management consulting firms, and law firms. For Pedigree: How Elite Students Get Elite Jobs, Rivera interviewed employees, HR representatives, went to recruitment events, and observed closed-door hiring processes. Rivera’s years of observations help us better understand how, as the rhetoric of corporations has changed, their behavior has largely stayed the same.

Even for someone who has himself written on elite reproduction, Rivera’s book can be a depressing read. Elite firms spend millions on recruiting events at tiny number of schools (basically, Harvard, Yale, Princeton and “maybe Columbia”). They provide students free booze and bits of swag to take home. Hollow multi-media presentations suggest that students will find their calling, their friends, and maybe even their spouse through the spreadsheets and reports and all the other inane work of helping the rich get richer. Employees may even do some good. But that message gives way quickly for one overriding certainty: if granted employment, students will soon make a lot of money.

It’s amazing how compelling this is for young people who have just spent some of the most formative years of their life learning about Marx, inequality, diversity, and justice; whose student group meetings often start with such introductions as “Please give us your name, where you’re from, and your preferred gender pronouns.” Our young people move from wooing colleges by demonstrating all their volunteering and good works to being wooed by the allure of a luxurious life. Notions of moral worth are quickly replaced by those of net worth.

Rivera’s work is part of a scholarly tradition that is at once very old and very new. In his study of scientists, Robert K. Merton noted that well-known scholars would often receive far more credit for their work than relatively unknown scholars, regardless of the quality of their contribution. A graduate student may have done the research, but her famous advisor was likely to win the big prize. If a famous scholar introduced a theory months or even years after a non-famous one, he was likely to get credit for “inventing” it. Merton called this phenomenon “The Matthew Effect,” named after a verse in the Gospel of Matthew:

For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away. (Matthew 25:29, New Revised Standard Version)

Today we think of The Matthew Effect as applying not only to scientific discoveries, but to life in general. Scholars of inequality have demonstrated how both advantages and disadvantages accumulate. The implication of this work is that inequalities are not so much the product of the traits of individual people as a lottery influenced by the social position one is born into. Tell me the income of a baby’s parents, and I can make fairly decent predictions about that child’s future.

An often-emphasized implication of cumulative advantage is the social patterning of this process. While the average American family makes around $52,000 per year, Asian Americans earn about 30 percent more, and the average African American makes about 30 percent less (or almost half of the average Asian family). While generations ago there was hardly any moral concern about the racial dimensions of cumulative advantage and its impact on our democracy or economy, today concern over these issues is far more widespread. Both the government and private companies even propose programs to address the issue of how we get the poor out of cycles of poverty.

Elite firms have fully embraced the language of diversity, yet failed magnificently at achieving it.

Again, this is an old question. Nearly forty years ago, well before Margaret Thatcher’s neoliberal reforms, British sociologist Paul Willis published Learning to Labor: How Working Class Kids Get Working Class Jobs. Willis asked why it was that working class boys so often “fail” at school, taking anti-authority and anti-scholastic views, and rebelling against the institution that provides the most likely pathway for mobility. He argued that working class boys recognized the promise of mobility as nothing short of a fantasy—that for all the proclamations of liberal reformers, the reality of Britain’s class system meant they were destined to work in the factories alongside their fathers. In many ways these boys were right. Britain has some of the lowest levels of intergenerational mobility in the industrialized world (one of its nearest counterparts is the USA). Rather than embrace a system that was likely to leave them locked in place, they rejected it. Yet in their rejection, they helped reproduce the very class relations that have them locked in place. Willis’s arguments combined bits of Marx, Gramsci, and cultural studies in ways that represent the intellectual climate of the 1970s, but feel surprisingly fresh today.

Rivera’s approach is nowhere near as Marxian as Willis’s, but her book’s subtitle, “How Elite Students Get Elite Jobs,” is clearly a nod to the influence of Willis’s scholarship. Rivera’s approach to reproduction is part of a recent strain of research that draws more heavily on the work of French sociologist Pierre Bourdieu. In his work on education, Bourdieu asked how, as institutions were radically restructured in response to the international protest movements of the late 1960s, so little seemed to change. The children of the rich were still disproportionately represented in the schools, public offices, and private firms that were meant to have opened their doors more widely to all members of society. If anything, in the decades after reform, the dominance of the elite seemed firmer than ever.

Bourdieu’s great scholarly innovation was to think not just about the economic bases of reproduction, but to explore the ways in which social connection (social capital), cultural competencies (cultural capital), and symbolic associations (symbolic capital) all contributed to the reproduction of inequality. And unlike Willis, Bourdieu often studied the elite when thinking about how groups reproduce themselves. In the post-Piketty era, it’s hard to conceptualize how radical a move this was. Except for a few scholars like G. William Domhoff, who took readers into the world of political elites and their cultural playgrounds like Bohemian Grove, few were working on the rich.

All that changed after Bourdieu, who explored how elites relied not just on their economic resources to invest in the next generation, but also used their social connections to advantage themselves and their children. He further showed how reproduction happened in far less visible ways. Bourdieu argued that by spending time in elite schools, children developed habits that matched the expectations of such schools. As they moved up the ranks, they seemed to magically display what it took. Vague instructions on an assignment from a teacher would be understood clearly. The hidden expectations of elite colleges would perfectly match the habits and understandings of young men and women who had spent their lives in similar institutions, having to discern similar situations. It came naturally to them.

American scholars have vigorously taken on this tradition of research, building on its insights. Much of this work shows how elite families use their economic resources to advantage their children—some children have millions invested in them before college. The implication is that there is a “pipeline problem”: elite families have raised the bar through their arms-race-like spending on their children, and there simply aren’t enough poorer or minority students who can keep up.

<i>Nasau Hall. Princeton</i>, Photograph by Smallbones/Wikimedia Commons

Nasau Hall. Princeton, Photograph by Smallbones/Wikimedia Commons

These arguments are fairly convincing. But there’s another astonishing truth hidden beneath them. Even given this arms race of spending, there are plenty of outstanding students from poor and minority backgrounds. In a recent study, Caroline Hoxby and Christopher Avery noted that the “vast majority” of high-achieving low income students do not apply to selective colleges because they aren’t aware of the range of financial opportunities available at elite schools for outstanding candidates. The numbers suggest a vast pool—between 25,000 and 35,000 qualified poorer students each year, enough to fill the freshman class at every single Ivy League school—whose applications are never filled out. If schools wanted to fix the “pipeline problem” they could. The talented poor are hiding in plain sight; elite colleges just don’t want to find them. If they did, they’d be in a position of either having to make major cuts to programs to afford their financial aid policies, or acknowledge that their model is built upon the inclusion of the rich, and the exclusion of the poor. We might rename the “pipeline problem” the “willful blindness” problem. For being blind to and failing to reach out to the talented poor means elite schools can continue to proclaim their meritocratic fictions. The story does not stop here.

Rivera’s work allows us to see what happens next, as students from different economic and social backgrounds apply for jobs. Rivera’s story is that elite firms act a lot like elite schools: they find ways of “systematically excluding smart, driven, and socially skilled students from less privileged socioeconomic backgrounds.” Of course, applicants have to be qualified, with strong math, analytic, and/or personal skills. But there are lots of “qualified applicants,” and some qualifications, like having the right cultural traits, status markers (like going to boarding school and an elite college), and interpersonal connections with elites are rarely found except among those applicants from wealthy backgrounds. In a previous era, firms were explicit in their interest in hiring young men from the “right kinds of families.” Today firms engage in a more pernicious process, where they still select these men at far higher rates than others, but pretend that the reason they’re doing so is because they have the best of a range of qualifications.

Perhaps the simplest way to put this is that partners at firms are fairly impressed with their own skills, talents, hard work, and capacities. They get paid astronomical amounts of money (CEO pay has grown 90 times faster than the average worker pay), and for the most part believe they’re worth their salaries. When picking the new crop of employees, then, they would rather look in the mirror than at the diverse applications in front of them. Smitten with their own successes, they look to hire younger versions of themselves.

If you think we are part of a great meritocracy, consider this: the beneficial effect of family wealth on your chance of admission into America’s top schools doubled from the 1980s to the 1990s, and it has continued to rise ever since. The masters of finance select from within the tiny band of schools where your parents’ income matters more and more. Existing wealth feeds the pipeline to future wealth. The Matthew Effect is alive and well: “For to all those who have, more will be given.” For the second part of the story, “from those who have nothing, even what they have will be taken away,” we must look to studies of poverty. We might ask our Masters of the Universe, “Who is doing the taking?” icon

Featured image: Wall Street, Photograph by Henry Han