The dodgy data behind the DEI crusade

The Biden administration’s diversity efforts are based on easily debunked research.

John Mac Ghlionn

Topics Identity Politics USA

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DEI has been pitched to Americans as an effort to foster workplace harmony. But if a scathing new report is anything to go by, diversity, equity and inclusion (DEI) is nothing more than a cynical marketing ploy founded on corporate doublespeak. And the Biden administration has fallen for it.

An exposé published by the College Fix this week reveals that at least 51 federal agencies have justified their DEI policies by citing four studies by McKinsey and Company, an American consultancy firm. These glossy studies – ‘Diversity matters’, ‘Delivering through diversity’, ‘Diversity wins’ and ‘Diversity still matters’ – make the so-called business case for DEI. But critics are now eviscerating McKinsey’s research as shoddy, agenda-driven and riddled with weak data.

Take a new rule from the Department of Labor’s Employee Benefits Security Administration, enacted in January last year. This rule expands the application of environmental, social and governance (ESG) criteria – used to measure a company’s ‘social impact’ – to government pension funds. Essentially, this means retirement-fund managers now have to put ESG considerations at the heart of their investment decisions. Supposedly, this is because companies with a good ESG score will deliver the best returns. What research is this claim based on? You guessed it: two McKinsey studies that suggest ‘social responsibility’ is the golden ticket to productivity.

Economist Alex Edmans, professor of finance at the London Business School, has slammed the Department of Labor for clinging to McKinsey’s dubious work. He argues that the department had ‘already decided’ its preferred policies and ‘searches for any study that will support this idea, regardless of its quality’. ‘McKinsey is a consultancy, not a research organisation’, Edmans concludes. ‘The goal of its papers is marketing rather than scientific inquiry.’

He’s not wrong. In March, business scholars Jeremiah Green and John RM Hand exposed the shoddy methodologies behind McKinsey’s DEI studies. In their research, they could not find any ‘statistically relevant relations’ between ‘measures of executive racial / ethnic diversity’ and measures of corporate success. The business case for these initiatives is completely threadbare.

Despite these concerns regarding the integrity of McKinsey’s research, the firm isn’t budging. No apology, correction or public acknowledgment of its flimsy findings has been made. Meanwhile, the McKinsey papers continue to spread through Biden’s federal government and beyond like a plague, allowing unvetted research to drive government policy.

Customs and Border Protection (CBP) relies on a McKinsey study to back its ‘diversity, equity, inclusion and accessibility’ plan, a gobbledygook agenda aimed at ‘fixing’ the underrepresentation of women and minorities at the agency between 2022 and 2026. The CBP document parrots the claim that ‘numerous studies demonstrate that organisations with a diverse workforce… outperform their peers over time’.

The Office of the Comptroller of the Currency, which regulates America’s national banks, is also foolishly committed to DEI. Acting comptroller Michael J Hsu stated in 2022 that companies with diverse leadership have ‘stronger earnings, more effective corporate governance [and] better reputations’. Again, his source was a dubious McKinsey study. Sadly, these are just a few examples of government entities that have swallowed McKinsey’s tainted bait.

The good news is that voices of dissent are rising. Mike Markham, programme coordinator at advocacy group Color Us United, insists that no ‘ideology, movement or social initiative inside the free market will ever outperform merit’. Markham also lambasts federal agencies for pushing what he sees as damaging ideologies. Indeed, recently published research shows that diversity training actually creates tension, anger and greater racial animosity between diverse groups. Who would have thought it?

The Biden administration now stands at a crossroads. Its DEI initiatives are not only based on shoddy research, but also likely to perpetuate harmful practices. It cannot be said that they actually combat discrimination, boost performance and benefit Americans in any measurable way.

The costs of ignoring this are borne by everyone – taxpayers, employees and society at large. It’s time for the Biden administration to abandon its dubious DEI programmes and chart a new course towards meritocracy and policies that actually deliver for the American people.

John Mac Ghlionn is a researcher and essayist. Follow him on Twitter: @ghlionn

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Topics Identity Politics USA


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