The American Workplace Is Far Less Diverse Than You Might Think

Around the globe this May 1st, the workers of the world will unite in demonstrations of solidarity for International Workers’ Day. Of course, they won’t here in the U.S., because communism. But this isn’t that kind of Workers’ Day story.

Rather, this is a story about how the U.S. workforce is more segregated today than it was 40 years ago.

In fact, according to a new study out of Harvard Business School and Stanford University, “Racial segregation between American workplaces is greater today than it was a generation ago.”

Before you stutter, "But that can’t be! My workplace is diverse!" consider this: According to the researchers, “the return of racial establishment segregation owes little to within-establishment processes but rather stems from differences in the turnover rates of more- and less-homogeneous workplaces.”

In other words, “Firm turnover is creating a racial divide,” writes Dina Gerdeman for Harvard Business School. “New businesses entering the market don’t employ a racially mixed workforce as they are getting off the ground. Instead, many tend to start off with all-white, all-Hispanic, or all-black workers. Meanwhile, more diverse firms that have been around longer are shrinking or shuttering.”

There’s also the issue of being able to rise through the ranks. Let’s say you work for Apple. Who’s cleaning the floors of your office? Who’s cleaning the bathrooms? What race is that person, and do they really work for Apple? Or do they work for a subcontractor Apple has hired?

As illustrated in a 2017 New York Times story, Apple contracts out its cleaning. Forty years ago, the person cleaning Kodak’s floors received a livable wage, paid vacation, and tuition reimbursement. Those people could, and did, climbed the ranks.

Today, the folks cleaning your office probably don’t work for your company, or even the owner of your building. They may or may not make a living wage (probably not). They don’t receive tuition reimbursement. And guess what? That nice African-American man cleaning your office floors or the nice Spanish-speaking lady vacuuming after the office has closed have almost zero chance to advance in your company.

Interestingly, the bulk of workplace desegregation in the U.S. occurred from the mid-1960s through the mid-1980s—a time period before the bulk of baby boomers were holding power positions in companies.

“The gains minorities made by joining large firms between the 1970s and 1980s aren’t being reversed today, [the researchers are] careful to note,” Gerdeman writes. “It’s not that workplaces started getting rid of minority workers in favor of whites. Instead, in the 1980s, more minority-only firms began emerging, and we now see a division of labor in terms of race: segregated workplaces that are majority-white, majority-Hispanic and majority-black. These new firms made up of mostly one race are tipping the balance of integration among all firms, creating a less segregated workforce overall.”

You might notice that workplace segregation also happens within companies. Just look at some of your favorite restaurants, where people of color tend to occupy the lowest-paid positions: If your server is white, yet the busboy is black, and the kitchen staff (or the dishwashers) are all Spanish-speaking, you can easily see the problem. But it’s not just a food industry issue: just watch ABC’s sitcom black-ish. Protagonist Dre (Anthony Anderson) is an executive in charge of the “urban” arm of the company. If the only black folks at your company are in the “urban” division, there might be segregation, even if people of color occupy advanced titles.

You may be able to identify the businesses and workplaces in your own life where segregation is entrenched and where the opportunity for advancement from the lowest level to the highest has been eliminated. It might be helpful to remember that advancement was, at one time, possible and championed in many American companies.

“Companies should start asking new questions,” writes Gerdeman. “What work are they doing in-house and what work are they hiring contractors to do? And is the work they are contracting out affecting the diversity of the firm?”

The issue of workplace segregation in the U.S., therefore, can’t be solved with the HR department alone, Gerdeman and the researchers stress. And it’s not a problem that can be fixed by outsourcing, like the job of cleaning, to an all-black or all-Hispanic company—outsourcing seems to be part of the problem. And segregation isn’t just a white-company problem.

Segregation is a problem all businesses will need to consider from the very roots of the company—if diversity, inclusiveness, and ability to rise in the company are truly values they champion and aspire to.

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