Disparities in Income

I think the trend of competitive people clustering will accelerate as global economics continue to evolve. Despite more than one-third of the world living on less than $2 a day, the average wage for every earner on the planet, according to the BBC article “Where are you on the global pay scale?,” is $18,000 per year in Purchasing Power Parity (PPP) dollars, which expresses what it would cost in the U.S. to get equivalent goods and services in your own country. The growth of the global middle class is accelerating for the same reason that the sorting inside our country is accelerating: technological advances in communication and transfer of money.

What’s the problem? The average wage in the United States is $42,980 (compared to $18,000 for the global average, which includes the United States). As economies grow, more people will be able to find work globally and there will be wealth generated, but not enough in the United States to keep up with the global growth rate. That means our average wage will likely continue to shrink as the developing world rises.

Why Top Performers Seek Diverse & Inclusive Workplaces

This tells me that the sorting trend is going to accelerate. The most talented people from around the world will sort themselves out. Many will come to the United States (if our government can get out of their way), since our economy is the largest on the planet. And the folks already here, your potential human capital, will aggressively sort themselves out, with the best and brightest proactively seeking “positive ecologies.”

Which folks are going to be attracted to YOUR company? Which business partners?

If you are a diversity practitioner and are concerned about “diversity fatigue,” here’s what I suggest you do: Connect the dots between reputation and talent development, philanthropy and supplier diversity. Reach out to your government-relations and marketing people, so they have a coherent understanding of your diversity reputation and how it applies to their roles. I still see many corporate diversity efforts (most not-for-profit and ALL federal-sector efforts) relegated to window dressing. Seen your budget shrink? That’s evidence of a sorting process, and you need to focus on getting that reversed. It starts with connecting the dots between your efforts and strategic trends.

Luke Visconti’s Ask the White Guy column is a top draw on DiversityInc.com. Visconti, the founder and CEO of DiversityInc, is a nationally recognized leader in diversity management. In his popular column, readers who ask Visconti tough questions about race/culture, religion, gender, sexual orientation, disability and age can expect smart, direct and disarmingly frank answers.

The post Ask the White Guy: Why Do People Get Tired of Diversity? appeared first on DiversityInc.

DiversityInc’s Luke Visconti was the keynote speaker at The Skanner Foundation’s 21st annual Martin Luther King Jr. Breakfast in Portland, Ore. More than 1,200 people attended:

What would King say?

Bernie Foster built a bridge by asking me to speak at this event–a white publisher invited by a black publisher to speak to an audience about Dr. Martin Luther King Jr. It’s quite an honor.

Bernie and I met at another event where I was discussing “the business case for diversity.” That the business case for diversity is a reality and not just a theory is directly due to Dr. King and the civil-rights era.

The business case for diversity is based on two factors: changing demographics and corresponding changes in economic power.

In Dr. King’s time, there were roughly nine white people for every one person of color in our country. Immigration had ended in the late 1920s and would not resume until the mid-1960s, so our racial demographics were relatively stable. African Americans were our largest demographic of people of color, and access to college and corporate America did not exist for them. Most African Americans did not even have the right to vote.

Shifting Demographics

Today we live in an era of more immigration per capita than any time in American history. For Americans under 40 years old, there are less than 1.5 white people for every person of color. White people will probably be the minority by 2040.

People of color are increasing educational attainment more quickly than their rise as a percent in our population. Households of color are increasing their household income at more than double the rate of white households–and have been doing so since 1990.

In essence, people of color are our country’s engine of growth. When you factor demographic changes with household-income changes, people of color have an eightfold higher growth rate than white people.

This has caused a group of companies to take notice and become more progressive. My company runs a competition once a year to determine The DiversityInc Top 50 Companies for Diversity. This year more than 600 companies asked for a survey, and we expect over 350 to compete–participation is up over 100 percent from three years ago.

We ask over 230 questions on four areas: CEO Commitment, Human Capital, Supplier Diversity and Corporate Communications. Just so you know, there is no connection between our list and business conducted with my company. The DiversityInc Top 50 Companies are very different than typical companies. For example:

• Although they employ 5 percent of the work force, they employ 17 percent of college-educated people of color
• They hire 43 percent people of color even though the U.S. work force is only 28 percent people of color
• 7.5 percent of their procurement budget is spent with minority- and women’s-business enterprises. The national average is 2 percent.

And perhaps the most important business indicator, the DiversityInc Top 50, expressed as a stock index, outperforms the DJIA, Nasdaq and S&P 500.

What this tells you is not that diversity is driving stock price, but that diversity is a core management practice of superior companies. It also tells you that diversity brings sustainability to a company. The numbers show that companies which have diversity in their DNA will dominate competitors which do not.

Despite the compelling business case, 80 percent of the Fortune 1000 does not practice diversity management. By diversity management, I mean disciplined, measured, accountable management–not just Mexican food in the cafeteria on May 5.

Why the lack of attention? Most corporations are run by straight, able-bodied white men. The luxury of being in the majority culture is never having to think about race.

Now that doesn’t make all white people bad. Some of my best friends are white and they’re OK. But being in the majority makes most white people oblivious, and we miss a lot of opportunities because of that. For example, the median worth of a black household is one-tenth that of a white household, and at the current rate of closure, it will take 1000 years for black households to catch up.

However, if you caught black household wealth up to the median of white households today, it would be like injecting the entire gross domestic product of Japan into our economy–over 4 trillion dollars. How many houses, office buildings, schools, cars, plasma TVs would we have to build with all that new capital in our economy?

So, who is being hurt most by this kind of a program not being implemented at once? White people. Why? There’s more of us.

If the facts are so clear, why are a minority of companies practicing diversity management? Why isn’t there an emergency program to enable black households to build wealth?

One reason is that we all have counter-productive human tendencies, like the feeling that if another group gets something, we’ll lose something–this is called the zero-sum argument. It works when we’re all hunting antelope in the jungle with spears. If the other tribe gets the antelope, our tribe goes hungry. However, zero-sum doesn’t work in an economic model as you can see with just this one household-wealth example.

There’s another reason for a lack of progress: People will do a lot to avoid feeling guilty. To look at our society and effect programs to build an equitable situation would cause us white people to really look at ourselves more clearly. It’s far easier to blame the victim.

But let’s look more closely at the cost of disparities. If you believe that all people are created equally, then you have to assume that talent is also distributed equally. Unfortunately, we can tell by graduation rates that a vastly disproportionate percent of the black and brown talent in this country is dashed on the rocks of a poorly funded public-school system. This can be fixed, but it would require a huge commitment of resources.

In his August 1963 “I Have a Dream” speech, Dr. King spoke of our country’s obligation to live up to the promises made by our founders–that “black men as well as white men would be guaranteed the ‘unalienable Rights’ of ‘Life, Liberty and the pursuit of Happiness.’”

He spoke of a check that had been returned marked “insufficient funds.” He did that before he got to the often-taken-out-of-context parts like “my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

The “I Have a Dream” speech isn’t about being colorblind; it’s about the obligation that had to be paid before our society could move forward together.

The check still hasn’t cleared. Have we cashed other checks? Is it worth it to pay this long overdue bill, or should we continue to ignore the knocking at the door? Let’s look to history.

Following World War II and Korea, millions of veterans went to college for free on the GI Bill. Due to the implementation of this program, white veterans disproportionately benefited, so let’s focus on white people. Before WWII, less than 7 percent of white people attended college. Today, 44 percent of white people attend college. Our country’s workers went from industrial and agrarian employment to knowledge-worker employment. The corresponding generation of wealth from white people working to the true extent of their potential was unprecedented in human history.

I think you can make the case that the $4 trillion in missing black household wealth is a drop in the bucket compared to what we’re sacrificing to maintain a society of “them” and “us.”

This is where it gets scary for our country.

White people will be the minority by 2040 in this country; however, 75 percent of the planet is already not white. The elimination of information barriers–most importantly the Internet–has liberated the talents of billions of people world wide. The Chinese now have as many people on the Internet as we have citizens–and they are building colleges faster than any country on the planet. People in India can call the U.S. for less money than it costs for us to call them.

Talent can now flow from where it is to where it is best treated. There are six billion people on the planet and only 300 million Americans. Unleashing the talent of formerly oppressed Americans has made our market robust. As the world’s formerly oppressed people have been able to exercise the talent they were born with, the global economy is surging. Investors in this country have already reacted. According to the current issue of Barron’s magazine, an amazing 90 percent of inflows to mutual funds went offshore in 2006.

By non-violent protest, Dr. King forced our federal government to action in the 1960s. I don’t think you can say that Washington is any more visionary today. Last June, my magazine ran a story in our Top 50 Companies for Diversity issue titled “The Worst Company for Diversity? The United States Senate,” which described the almost total lack of diversity in key senate staff positions. In that article we ran a photograph of the Alito hearings. Out of roughly 300 people in the room, there wasn’t a single black person. Not one.

In this environment of malignant neglect, there is a concerted effort in this country to enter a new era of oppression.

Bigots like Linda Chavez and Roger Clegg of the Center for Equal Opportunity along with sad souls like Ward Connerly are actively working against affirmative action and diversity. They say we should be “colorblind”–that all things are equal and affirmative action is wrong. They have worked to end affirmative action in California, Texas and Florida and most recently in Michigan, where the recently passed “Civil Rights” initiative eliminated affirmative action.

Their arguments disregard the lasting effects of racism and ignore the obvious disparities in our society. The fact is that we don’t have a colorblind society. It takes the blinders of the majority or the deception of evil people to not deal with the obvious:

• A colorblind society would not have more segregation in schools today than ever before in our history.

• A colorblind society wouldn’t foster a prison industrial complex and incarcerate people disproportionately by race–and have highest incarceration rate per thousand in the world, even surpassing the former record in the Soviet Union.

• A colorblind society would have rebuilt New Orleans by now.

• A colorblind society would understand that not having universal healthcare is the equivalent of wealth redistribution–from poor to wealthy.

• A colorblind society would have 50 percent women senators and roughly 28 percent senators who are people of color.

• A colorblind society would have equal rights for both straight people and gay people.

• A colorblind society would keep track of Iraqi civilian deaths as carefully as we’ve tracked our own soldiers’ deaths.

• A colorblind society with the mightiest military in human history wouldn’t stand by as 2 million people are herded to their execution in Darfur.

• A colorblind society would understand that “unalienable rights” were not limited in our Constitution only for those with the right documents.

• A colorblind society would not allow admissions to public colleges to be determined by tests which have different results by race, like the SATs.

• A colorblind society will have an equal chance of a white publisher inviting a black publisher to speak about America.

Ward Connerly and Linda Chavez are well funded and working nationwide. They have attacked affirmative action at the state level and have attacked diversity programs at the corporate and university levels. Be aware. Dr. King taught us that we have the obligation to forthrightly address the practices that preserve racism. For more on affirmative action, read “Why We Still Need Affirmative Action.”

We also have the obligation to act.

Vote your ethics. Most eligible people of color are either not registered or do not vote. The reality is that your elected officials look at who votes and portion their attention accordingly.

Be careful about who you do business with and work for. Reward companies that share your vision.

Become financially literate. Build your family wealth through homeownership.

Read other accounts on Dr. Martin Luther King, Jr.:

Before MLK, None of My Accomplishments Would Have Been Possible
DiversityInc’s Denyse Leslie, senior vice president of consulting, draws a parallel between Dr. King’s firsts (first arrest, first book published, first Black man to win the Nobel Peace Prize) and the firsts of Blacks still alive (or recently deceased) as they live out Dr. King’s vision.

Taking Risks for Your Brothers: The Power of Martin Luther King’s Words
Human-rights activist Raymond Brown learned about the need for humanity from Dr. King.

Civil-Rights Progress: Helping LGBT Youth
GLSEN’s Executive Director Dr. Eliza Byard notes how Dr. King’s message that Black people would eventually reach the promised land is a reminder today that progress, no matter how slow, is crucial.

How Has Dr. King’s Legacy Changed Lives?
While Hurricane Irene hit during the Martin Luther King Jr. National Memorial dedication, R. Fenimore Fisher reflected on how Dr. King’s actions changed the law that changed society.

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