Money Talks: RIP DEI?
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Hello and welcome to money talks a special extra podcast from sleep money where we chat with brilliant and interesting people. I'm Emily pack of a correspond d at axial and a cohoes of slate money and i'm so excited to be here with Simon fox man. She's a long time finance reporter at byberg news who has been closely following something of great interest to me and a lot of other people. And that's the backlash against D, E, I, diversity, equity and inclusion programs inside companies. Simon welcomed to many talks.

Hi Emily.

so glad be with you. Yeah so you covered hedge funds for a really long time, but now you're diving into, I guess, the intersection of social issues with business and finance, which is a rich topic these days. And that's what I really wanna dive in to now that we know dannel trump is returning to the White house, we know he took action against D.

E. I, the later stages of his first administration. And I think companies now are really bracing for another wave of backlash against diversity, equity, inclusion, if they haven't already skills things back.

So I really want to talk about what the backlash has looked like over the past few years. What Donald trumps return to the White house is gonna. Mean for D. E. I.

And I guess I have a bigger picture question of, do these efforts have they actually been very effective? There's a lot of people upset about this backlash, but I have wanted pull back and say, you know, what has IT all meant? So yeah, I wanted get into all of this, how IT unfolded, how I started. And that's all coming up on sleep money talks.

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let's take us back to I mean, Frankly, like the one thousand hundred and sixty, there were efforts to try and diversify the workforce. You know before then there would be signs to saying you you can apply if you are certain race or if you are certain gender. And really, for a long time, these efforts have existed.

Try and slowly diversify the workforce. I think that things have changed gradually over time, but especially in the last decade or so. Remember the moment of me too, real efforts to try and see women in the workplace and more women in higher management.

And then, of course, I think everything really gained a lot of steam with the murder George floyd in twenty twenty billions of dollars in pledges from companies not only to bring people up within their organizations, but also to try and incorporate them more into the broader business flow to tap diverse suppliers, minority owned and women owned businesses, diversity bonuses for meeting aspirational goals about how many people of color or women you see at different levels of the business. And really where this backlash began was almost immediate. I think it's become this, well, first we thought, I guess, with critical race theory in this idea that there's you, this road, systemic historical injustices IT towards especially black people in this country at the descendant's of slaves. And then more recently, this is evolved into this backlash against dei specifically. And there's been a variety of ways that this is manifested, both through conservative activists as well as sort of government officials, especially at the state level.

Before we out of get to those efforts, I wanted to sort of there was diversity, equity and inclusion pre George floyd and post George floyd, before George floyd, what did those company efforts really look like and how effective are they?

I would say that the difference print post is not so much the substance of actually what was happening as IT was the interest of by corporate executives, especially the sea suite, in magnifying and project those efforts. And of course, he had more people adopting them. So for a long time, there have been things like diversity training to try and surprise people of potential biases that they may have.

Some of these things look like mentioning programs especially targeted at women and people of color or other disadvantaged groups, L, G, B, T, Q, people in the workplace, people with disabilities, veterans. Then there are, you know, things like diversity bonuses, which include, you know, meeting a certain number of people who are of different races, of different gender, what have you at different levels of the company. And there are spent a lot of discussion for a long time about how successful these things actually are.

As far back as two thousand and seven, there were two researchers, Frank devin and Alexander eve, who really talked about how mentor diversity training were not particularly successful, the threats of incurred ring legal action, if you discriminated, not particularly successful as well. But they found other things that were a little bit more so, like what diversity councils, diversity officers identifying specific problems within your employee chain and employee advancement chain mentoring programs, very successful. That's when that constantly comes up.

Recruiting, especially looking to h bc us, has been successful over time and a certain amount of voluntary diversity training. Still some question Marks about that. But you know if people want to learn more about other groups of people, we've seen some positive impact of that. The you know of the question Marks are really, you know we have to take a course online and sit there, are in click on button. That's not necessarily the most successful way of encouraging diversity for a wide.

I really noticed during the obama that corporate D I efforts ramped up and became more the more companies were sort of publicly what they are doing and wanting to talk about IT putting out reports during gamer gate. If you remember that in like the twenty fifteen and sixteen, yeah, there was a lot more talk about women in tech and tech firms like you know facebook under Sherry sandberg and google.

They were really kind of at the four front of a lot of this, especially I remember antic bias training. And google was, you know, really champion of that and efforts to bring more women into tech. You know, sandberg at facebook was really into that.

Those seem like just really long gone days. And but you can see the connection there between who's in the oval office and what their priorities are and how that kind of trickles down to corporate america, which is now a totally different conversation with trumpeted back to the White house. So in twenty twenty, trump was in the White house and company is post George fluid started really leaning into dei publicizing their efforts, talk about you said the backlash started immediately.

But I sort of feel like the backlash really intensified when the supreme court gutted a formative action. What year was that? There was twenty, twenty three june.

I think in that was the fair admissions case, they said, you know, you couldn't have a formal of action at the university level and everyone at the time was like, oh, no. This means we can have diversity, equity inclusion in companies. Do I sort of have that right?

yeah. So you know, when I say IT started almost immediately, I think you have to look at september twenty. And this was when they were lot of backlash. And C.

R, T, critical race theory, you may recall, or or may not, because IT never really went into effect to the Donald trump put forth an executive order banning certain bias trainings, essentially bias training that he said made people feel guilty, really restricted initiatives overall. I just never really went into effect. But what has happened over those intervening years was, no D. I flourished to some degree under the by administration. And then, as you say, there was this informative action decision.

And while that really focused on universities, in an academia, I think corporate executives saw the writing on the wall, and they all went back to their own programs and said, is what I am doing, does that in any ways stand to violate them in the same principles that the supreme court brought to universities? And so they all, we assessed their various programs. And then shortly there after, within month two, we saw a conservative activists, the likes of ed would bloom and specific, coming out, actually suing companies over programs that he believed unfairly discriminated against White people or men.

So you've saw law firms, especially perkins's coi, for example, facing lawsuits about various fellowships and internship programs that they had. They were only targeted at specific, traditionally marginalized groups, and they essentially did away with them. And he said he didn't want money.

He wanted to send a message. And IT was a series of law firms. That message was quickly send. Everyone kind of either open those programs up generally or just got rid of them wholesale.

It's pretty incredible. So edt drum is the guy behind the affirmative action lawsuit. And to me, it's pretty incredible how fast law firms and companies rolled over on their minority fellowships after that suit was filed.

Mean, I didn't go to trial IT. IT was just sort of starting to bubble up. And these fellowships, they let let, if I have this right, the fellowships were basically lost.

Students are minorities got fellowships. They were the ones considered for the rules. So yes, so as soon as those programs were questioned, law firms, companies were like, OK forget IT like it's just instant pullback. Did that surprise you?

no. And I will say this, you have to remember, with a firm tive action, sixty eight percent of americans, according to a gala poll, said ending a firm of action was mostly a good thing. And that included two percent of black adults, sixty eight percent of his panic adults.

So I think more broadly, there is this reaction to if you are a certain group and receiving perhaps a benefit, your maybe getting hired or maybe allowed into a position you wouldn't necessarily be allowed into. And and this is again a complicated subject. That idea is something that abroad worth of americans kind of reject.

Now that's not to say that h any of the people that want these fellow ships or one these internships would not have received them anyway. It's not to say that this is just encourage recruitment efforts. But IT didn't surprise me because I think there's this broader movement of the american public views on affirmative action or anything that looks like a kind of shifting overall, I will say that this was a targeted effort.

However, going after the corporate law firms that advised fortune five hundred companies sends a message, there was no surprise to see IT swiftly trickle LED down. Now I will say also, these internships and these fellowships that are targeted at traditionally marginalized groups, including, in some cases, first generation college students of any race, have not entirely gone away. They've just opened up to allow more people.

Anyone can apply. And you know, it's a good question. Ask whether that's a bad thing. That is something that corporate amErica is kind of still sorting out.

okay. So let's take a break here. When we come back, I wants to talk to about the other people going after companies on D. E. I because there are some new actors that have been really effective, so they'll be right back with that.

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be to be so you mention award bloom s last suits but then there's also there's Stephen Miller who is about to head back to the trump White house. He has his own group. Can you talk about what he's been up to?

Yeah amErica first legal has been targeting various companies and most of those are not lawsuit, their certain administrative regulatory complaints with the 一个 employment opportunity commission。 The eoc is sort of vis from accompanying company basis. But essentially he he's doing a similar thing. Edward blooms idea and critics take issue with this idea is there should be no discrimination anywhere. You know, your race should not come up at all in any, uh, hiring or admissions or anything like that.

You know, Stephen Miller has more embraced this idea that some of these D I efforts are actually discrimination against White men or asian people, for example, and kind of push, this is more of a culture war I I suppose thing I mean, obviously is very involved in politics. AmErica first legal does other stuff. So he's a bit more of the political end of the anti di program.

His amErica first legal has sued what like twenty five different companies.

A boy, i'm actually not sure, but it's been it's been great a few and note that he's involved in other issues, immigration related issues for one example, but plenty of other things.

I think one of your pieces in bloomberg, and this was a wild o, so at least twenty five. So I imagine probably more by now, do you think D, E, I and attacks on D, E, I will be a focus of Millers as he heads back to the White house? Or what does IT say that this guy is going back? He's, i'd say, one of the leading D I backlash activists.

What is that? IT comes back to the trump administration. Just another sign of where their add goes.

I don't think the trump administration has been shy about IT desire to dismantle D I, Frankly. And they see IT as part of this kind of anti woke aga that they want to pursue. I think absolutely.

That says something that still Miller is is going back or maybe going back to the White house. IT also says something Frankly, there's a lot of conservative activists that have been very influential that have to some degree and associated with trumps campaign. I I think that that's the message, that's the writing on the wall. And you have various advocates of D I, esa, tly preparing to fight this. Are they .

preparing to fight IT? What are they actually doing? Because most of the people i've spoken with D.

I consults say things like, well, we won't use D I as a term anymore. We're gna explain more. What we want to do will focus on casting a wide net and recruiting. But IT seems to me that retreat mode is the mode, you know, IT doesn't seem to me like there's a big capital R, D, I resistance that was such the a corporate thing always to begin with. It's hard to imagine much of the fight happening because it's .

a good question whether not it's actually a fight. What I see is, yes, there's a retreat. And we wrote, for example, about wall street retreating from di, opening its fellowships and internship programs up to multiple people.

But I think there's also a way of looking at this as pulling back to the walls, the mote one can defend, uh, legally. And at that point, you may see certain activists try and come after some of those policies. And but actually this is what companies think they can defend.

So for example, limiting these internship opportunities that were, at one point just for specific groups, opening that up to everyone allows you to defend those programs as this is good for everyone. We are especially trying to increase the presence of minority groups with this, but anyone can apply. So if you are a White guy who has done a ton of work and in our city schools, and really you made some certain strides there, know maybe you could qualify for this.

Is that D I buying and other name? Is that where D I you continue to exist? I don't know.

But it's not like these companies, especially the companies most recently who've announced that they're stepping back at her telling their D I sound like they're limiting that. We've seen at least not like they're cutting benefits for transgender people to gender firming care. It's not like they are completely stopping.

They're just not talking about this stuff anymore. They're providing a defensible barrier to try and try to retain employees, but also not face public backlash. Are lawsuits right?

That's what I ve also heard. You know, companies to continue to try and be a welcoming place for women and people of color. And L G B T Q plus in is especially right now when there is just immense backlash, especially against tran's people. Companies can still, you know I health insurance coverage for people and try to be at an inclusive place for all in plays without having to stand releases about IT as they may be what have in twenty, twenty.

There's definitely a business case for that because you want to retain individuals, you want to retain talent. You don't want your L, G, B, T, Q employees saying, well, I don't want to work here anything more because this doesn't seem like a welcoming place. It's clear where the Young people are headed.

There's, you know, more openness towards L G B T Q issues. Certainly the workforce is way more diverse than I used to be. So the companies are kind of in this balancing active. How visible do I want to be, but how much do I need to keep in order to retain my Youngest, newest employees?

right? Yeah, something to me like the demographics are undeniable, especially with women. I mean, more women graduate from college. now.

More workers and educated workforce are women whose more people of color, we're just a more diverse country and it's only gonna get more diverse and IT would be impossible for companies to just try and hold that back. I guess. Anyway, I wanted talk about two other things before we finish this out.

Let's start with paul singer, because I did not realize how involved he was in anti D. E. I efforts. Could you explain that?

yes. So he is the chairman of the manhattan institute and this is a think tank you kind of an old sleepy think tank that he's really invigorated um since he became chairman like about fifteen years ago. And one of the things they have really targeted is diversity equity inclusion programs in schools and universities.

And Frankly, the idea there is that republicans didn't have control of the White house. They didn't have control of all the levels of congress. And so there was a limit to how much you could restrict di.

Critical race theory has been know it's something that their scholars write a lot about. But by authorising model legislation and then going in essentially presenting IT, I I would say selling IT, but presenting IT very carefully. They're not lobby's.

This is a five, one, cy, three organizations, two states across the country. They've had a lot of conservative lawmakers introduced bills to limit the E. I. And and they say that their ideas have been used in eleven states as of june, qualified into law in various ways to eliminate D. I programs. I think we can expect to see some of the same ideas that have been promoted by the manhattan institute, certainly by pulsing or himself in legislation or rule making at the federal level come january. How much money is policing .

or spending on this on the manhattan institute in these efforts, it's not in substantial.

Yeah, it's a little bit hard to tell exactly how much he's spending on each specific effort. But one of their biggest policy organizations within the the institute is essentially towards these sorts of things, dismantling the ei, changing the way people talk about race. And a lot of this is under the a guess of Christopher roofe, another conservative activists, real pony of trying to rebuild the right.

He is an employee there are in, is in charge of these efforts. Overall, the singer has raised some two hundred million dollars, I believe, in the past, you know, ten years in order to further these efforts. This has really become a place where they are the voice of this, but they're also a kind of different voice than like the heritage foundation, the project twenty twenty five folks.

This is a very wall street voice that have lots of wall street supporters that are putting money into these efforts. And IT will be interesting to see exactly what succeeds, at least in the D. E. I front. This seems to be a place where there's broad agreement among conservatives, but will see how that plays out for sure.

That's really been new because for so long, wall street seems to be ingy just doing a lot of this stuff like banks are making statements about IT. At least the window dressing was, you know, we want more women to rise the top. There's prominent activist groups that promote L G, B, T Q people on wall street. And to read about all singer consolidating and promoting what really seems like serious backlash to decades of efforts is not great news. I think for people who .

care about that thing, there's a divide between an asset management, hedge funds, private actually relate and the banks. And the banks have become very state. I think they see some of their D.

I efforts as some of the best things they've done sense the financial crisis to rehabilitate image. They want extend credit to traditionally marginalized groups. They want a wave fees for eats for minority on credit unions and things like that. And then you have the asset managers who think a little bit differently.

I will say that the protests on ivy league and other university campuses in the wake of october seven, and the attacks by hmos on israeli civilians, and then the ensuing conflict between israel and gaza, has really changed the game. I think bill ackman is a great epidemic. This to a degree.

These are hedged one managers in the large part. Private equity managers often going out in blaming D, E, I for causing this university backache, for no blame the first erectly supporting him as I I think we've the D I conversation has has blown out of control in the wake of october seven with, you know, hedging measures. Fingering for this is not what the problem is.

We've seen that play out. I actually I will see though I don't think that all of hedge phone land is particularly anti diversity. And this is my my biggest one of the issues I really want to explore deeply in the coming year.

There are a lot of people who believe that diversity is good. It's good for business, and they just disagree about how to get there, like where mentorship programs bad. If that's your effort of A D I. And Frankly, anyone can sign up for this mentorship program, know how is that a bad thing? And I think there are a lot of people on the center right who would agree with that and they just don't see that as that's the D I program.

The biggest piece of the backlash seems to be against having like hiring targets or quotes are talking about that kind of thing, like specifically aiming to hire more women or black people or hispanic people. That's what really upsets critics, although they levy these ad harmony attacks that are I mean, they're kind of insane on.

you know they yeah I will also say that on the pro D I side, you attack anything. D I, there was a hr organization that said I was good. And d of the e and in program and hr executives flipped out, you know, they were attacking each other online.

This was a huge battle. And you know the message there by president Johnson Taylor was people just don't understand what equity means. And so therefore, we can keep these programs around Better because it's still important to us but will be able to send the clear message.

So on the left, I guess you see this enormous, visceral, violent reaction every time anyone attacks anything. Di and IT makes for a very extremist conversation on both sides. There's not a lot of people coming together on this. It's all or nothing.

I going to push back a little on that because i've been talking to some consultants lately and since trumps election especially, i'm hearing like we need to do a Better job communicating. Maybe we we're not to use the term anymore. We need to pull back on hiring targets and things like that like IT.

IT does seem like there is an effort and a recording happening. And I I would like to add that Johnson Taylor, who let the organization that took the e out of the dei, has been rumored to be up for consideration for a role. The trumpet administration, have you seen that? And these two things are related to somehow.

So you're speaking to consultants who often work with the sea weed executives who say, we still won our dei programs, but we know we have to change. I would say that you also see on the left from folks like the human rights campaign, just painting the election as an attack on diversity. Overall, this is the largest, most influential organization that really advocate tes for lgbtq people.

And they have been had especially a lot of influence in the workforce. They've seen a lot of companies pull back. And I think the reason the companies pull back and we spoken with no delectatio is they don't want na appear like they are partisan. They don't want to appear like they're backing things that many of their more conservative employees don't want.

And so the idea of Johnny Taylor, accurate or no, going to the the trust administration is maybe he is saying, well, I want to have more influence and I can work with whoever maybe he has very conservative views, who knows? But I think there's a desire by some groups to reorient themselves to say, I still won't have an influence even if the administration is talking about getting rid of the E. I. wholesale. I think that I can convince them that we need diversity of some sort.

Yeah, that makes sense. I would be remiss if I didn't ask you about robbie starbuck, who has become I mean, we had Christopher rufo in twenty twenty leading the the charge against critical race area. And I feel like now robby starbuck is the one sort of leading the charge against the E I.

With success. He's got a few companies to pull back on their efforts. yes.

So robby, start by my last count, was associated with announcements by nine companies to pull back on D I know some of those companies said, well, we were already kind of doing these things before, but many of them had been contacted by him, at least in advance of announcing that they were curtAiling their D. I. programs.

One of the main ways they curtail that was by eliminating contributions to the human rights campaign for one, but other things as well. But yes, he is a conservative influencer who essentially, more than any of the other activists, has just gone out online and give up a lot of anger against companies with D. I.

programs. And he'll kind of pull out some of the most controvert short ones he'll pull out, especially having to do with with the L G B T Q community until try and get people angry at them online and then threaten a boy cot. And so this has worked at know tractor supply.

Uh, it's worked, darko for lows, Brown form and all these major U. S. Companies really announced that they were pulling back on their D.

I. programs. And I think this is only testable to the .

public backlash. We're speaking around the same time the congress is trying to pass this resolution, not allowing a new member ceremony bride to use the bathroom of her choice. This is a clear to me, D, E, I kind of battle.

I do think it's one that you could see in corporate america. And I wonder about beyond, like, what will the new trump administration do around the E, R, with the new congress do around the E. R, something like this, a fight like this over, you know, whether or not in coming lawmaker can use whatever bathroom he wants is just setting tony at the top, as they say. And how that trickles out to companies, I think, is something to watch. Is that something you're thinking about?

absolutely. Because, well, executives, even of the companies that I mentioned, will say, all know what, we are still committed to diversity. We are still committed to making sure work force H L G B to you. Work force especially, you know, feels supported if you are at the top saying we could see federal contractors, for example, maybe have to adopt a similar policy if you know leadership is saying, that's okay. Know what kind of messages that sent to people at the very bottom, absolutely. I mean, from government to elsewhere, women in the military, pete eggs of the current pick till the pentagon has also talked about not wanting women in combat roles and questioning their own in the military. Like, I think there are a lot of signals that you can send from the top that certainly going to make people angry, but also send a message of, yeah, you cannot want IT here .

yeah yeah that seems like it's just something, I guess, to watch to watch out for. And even if companies aren't making statements or setting up press releases about their diversity efforts, is something that internally they can be reassuring to workers about things like this and say, you know, we want to be at a welcoming place that seems to be something really important that should be happening right now.

I don't know that is yet. I think also, there are many D I advocates. And especially this is a message you get from there's a handful of the scholars at N Y U. kendo. You know, David, one of the things that they have said is regardless of which side you're on, if you're Edward blum or otherwise, you should acknowledge that discrimination is discrimination is discrimination.

So if black people are being discriminated against or White guys are being discriminated against, if you truly believe that there should be no preference for anybody, then you have to see in on all sites. And I do wonder what kind of legal battles we will see if we do see a rolling back of the I certainly advocates like the A C L U um the same poverty law center or two and said, if you start discriminating against the people that you were just trying to help, we're going to sue you. And I think we could see that very broadly.

So before we go, I want to ask you what to look for from trump to point what kind of actions is you gonna around the E I would we expect him to put back in play? Those executive orders are already talked about. What other things would we expect?

Yeah, absolutely. Hope a bug into place, an executive order and likely repeal one that the biden team had actually put forth on their first day to try and unrestricted D I trainings. Certainly, we will. We expect to see scrutiny of various diversity programs by the department of labor. We have already seen that last term with microsoft to wells far ago, maybe more successes by conservative activists within project twenty twenty five, for example.

They advocate the leading terms like diversity, equity and inclusion, also gender equality, gender identity from every federal rule, agency regulation, contract grant regulation and peace of legislation that exists that is a quote um maybe around women to um pregNancy especially the vine administration has tried to say, you know you can't discriminate based on pregnant y in a way that went beyond previous law. And so we'll see if we we that again and the federal contracting, anything where a company works for the government IT really restricts what kind of policies they can pursue. They have to just that was the whole point of all this equal opportunity stuff back. We know the jfk era was we will affect the way of federal contractors do business ah we could see the trump administration essentially use IT in a very different fashion.

This is no small workforce. I mean, unless elan mas his way and fires everyone who works with the federal government we're talking about, I think the largest workforce in the united states that is about to see D E I sort of come under attack and we can see, you know first hand what that means in terms of who works through the federal government and what those .

workplaces look like yeah and Frankly, it's just not the government itself. Federal contractors are amazon, google, you know, although defense contractors, food companies you name IT, and if they sound of the federal government, they might be affected by this. And that is an enormous workforce, even if dogan elon mosque get rid of a lot of actual federal employees.

Anything else you wanted add someone before we go.

There's a lot of focus on here. And I I would emphasize, you know, the debates around D E, I. They're not just D E.

I specifically. They're not just specific programs that really about diversity of the american workforce in american opportunity. And there is an opportunity to call D I or do D I differently. And there are lots of critics of IT, and we'll see where this goes. If I think there was a feeling in the obama administration that we were moving past race, especially, I think, if anything, we've focus a lot more on IT in recent years and so will see what comes of this next four years.

okay. Well, thank you so much for coming on, and that's our show for the week, thanks to justman mali and general for producing. Ban rho d is senior director of podcast Operations. Allies among gerry is vice president of audio for slate, and i'll be back in your feet on saturday for a regular episode of slate, money, mental, and .

thanks for listening.