Ask the White Guy: Why Are Disparities in Income Distribution Increasing?

Does diversity and inclusion have anything to do with this?

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.


Question:

What do diversity and inclusion have to do with income distribution, such as in "The United States of Inequality" from Slate? 

Answer:

The broad subject of wealth disparities is a source of constant discussion in our office. What "diversity" in a business context means for most companies is maximizing the efficiency and effectiveness of talent development; you want the best and brightest of ALL groups and want them to equitably be developed—and it is of immense advantage to companies that do it well, especially if their competitors don't.

However, where I think the subject truly makes money for companies (and societies) is that when you harness equitable talent development to the purposeful development of innovative and nimble corporate (and societal) cultures, you have a force multiplier that dramatically outpaces competition. That means taking diversity training beyond compliance and making a real business case for the four stages of diversity management.

In a country-size economy, it will maintain economic superiority, but the nature of economics is that when one group wins, all win because they have to produce the goods and services demanded by increased wealth. Winning in this context isn't bad; it's highly desirable.

A Distribution of Wealth

I'm not sure that we're seeing anything more than a return to traditional distribution of wealth because very few people as a percentage are truly talented, and this has been consistent. What hasn't been consistent is access for talent to express itself, and from time to time, markets expand to include more people than typical. For example, I think the post-war "middle class" was an artificial artifact of our not having to suffer massive strategic bombing and TWO generations of dead young men (our casualties in World War I were nothing compared to those of France, Germany and England).

The last 100 years have been a process of expanding workforce needs forcing expanding participation of workers; women haven't had the vote for 100 years yet, and Jim Crow ended less than 50 years ago. When we needed more workers, the workforce market had to expand past Christian Anglo men. When the new groups to the table gained a modicum of power, they demanded their rights. Those rights increased wealth, and that wealth consumed more services and products—a virtuous circle. Good for America. Good for the world. [Click on the images below to view and enlarge the timelines.]

But I'd argue that economic growth didn't come from labor, the labor came from innovation—and innovation created the economic growth that drove the demand for labor. Innovation is facilitated by a free society, and our society is more "free" than anywhere else (acknowledging our faults, but giving us our just credit). In other words, despite our faults, America gives access for talent to find means of success better than anywhere on Earth.

Recovery Through Education

So if we are returning to a traditional distribution of wealth (more wealth concentrated in the hands of fewer people), what is the answer to the discordant societal damage from inequitable distribution of wealth?

The article on slate.com touches on the one thing I think will save America's pre-eminence: education.

In my opinion, only a certain percentage (a small percentage) of people have what it takes to be in the top 5 percent—or the top 1 percent. We need to maximize the ability for people to reach that level because they create the things that the rest of the people live on; their innovation creates wealth, which in turn creates economic (and labor) demand. We destroy our potential by limiting good education to a precious few. I believe that we do this because people intuitively feel that if "they" win, "I" lose.

There is also a cynical group of very wealthy people who will prey on the common human emotion of xenophobia to aggregate and restrict access. So we end up with crappy schools for Black and brown people, the prison-industrial complex and healthcare disparities. We kill off that small percentage of truly talented people out of the bigotry that, generally speaking, we mistakenly believe that "keeping ours" is dependent on "keeping them" in their place. Foolishness—and that's being proven in today's economy.

Read Ask the White Guy on Racism, Bigotry & White Privilege.

How to Bridge Gaps With Community Outreach

The question for America is: Can we keep the destructive forces lagging behind the constructive forces? I sure hope so, and that's why all my philanthropy is dedicated to educational disparities, such as the DiversityInc Foundation and Rutgers Future Scholars.

For corporate America, the decision on managing this overtly must be made from the top. I'd say that most companies on a sustainable path are actively involved with managing diversity because the face of educated talent has become much more diverse, and that trend is increasing. Watch the video clip below to hear KPMG CEO John Veihmeyer discuss his best practices for communicating diversity goals throughout the organization.

Companies that are dragging their feet on this one aren't on the right side of the demographic shift, and if you can say that for your place of employment, it's a flashing red light that your future is not secure; get out if you can.

I think the larger and far more economically powerful discussion should be taking place around how diversity can build innovation—how the very culture that develops talent equitably has far more potential to have dramatically better innovation and nimbleness than competitors that do not. For cutting-edge best practices, watch our recent innovation web seminar from Capital One and McGraw-Hill, and read Our First Innovation Fest! 10 Companies Use Diversity to Drive Change.

Think about it this way: If "diversity and inclusion" programs can help you achieve a 5 percent improvement in productivity from better human-capital performance (higher engagement, lower turnover/regrettable loss, etc.), that's wonderful. If "diversity and inclusion" programs can help you build the innovation that facilitates the next generation of pharmaceutical advances or transportation improvement or first-mover advantage in your marketplace, well, you'd be a fool not to pick a workplace that has a demonstrable advantage over one that does not—even if you're a white, Christian, heterosexual man with no disabilities. Anyone with an evolved sense of survival knows that your chances of success are far better at the successful company. Especially if you're talented.

Before you jump to sending me an email that I'm beating up on one side or another, please think about this: I am taking a side. I am an optimist and I believe that all people are created equally. If you aren't or don't, that's fine, but there's no parsing this basic truth: People are created equally; therefore, talent is distributed equitably. Anything less than equitable cultivation of talent is subtractive from optimum performance.

If you are an executive, you have a fiduciary responsibility to your investors. If you're a worker at a company that operates with this ethos (and it is a matter of ethics and values), then you do NOT have the right to work contrary to your company's stated interests. It's that simple.

For more on corporate values, read Ask the White Guy: Decision Making, Clarity of Values & What to Do When It Goes Horribly Wrong

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