SCOTUS Decision on Affirmative Action Could Change Business Hiring and Promotions

The recent U.S. Supreme Court decision banning the use of race as a factor in university admissions may be limited in application to academia but it is likely to transcend that institution and have a substantial impact on the way companies approach minority recruitment and promotion, according to policy analysts.

“It would not be surprising if some businesses choose to reevaluate some of their equity work and reevaluate hiring practices, Bryan J. Cook, Director of Higher Education Policy at the Urban Institute, told Los Angeles Post-Examiner. “I certainly would expect that in the near future there are going to be some conservative groups that will probably go after certain companies that continue to voice support for equity efforts and incorporate those in their hiring practices.”

Cook said one of the reasons he would not be surprised to see the business community follow academia is because in some states, such as Missouri and Kentucky, the high court’s decision is already being interpreted in such a way as to go beyond race-neutral admissions and into other areas such as faculty hiring and promotion, financial aid considerations and funding for certain school programs.

Mike Gonzalez, a senior fellow at the Heritage Foundation, agreed, saying businesses are likely to be influenced by SCOTUS’ decision.

“The trend that was already taking place against DEI (Diversity, Equity, and Inclusion) is now going to accelerate as a result of this Supreme Court decision. Even though the Supreme Court decision itself was limited to university admissions, I think it will naturally have an impact. I think that the general counsel or anybody involved in compliance in a corporation is going to take a harder look at anything that is race-conscious.”

Racial disparities exist in most American institutions and the business world is no different in that area.

African-Americans make up about 14% of the U.S. population, according to the U.S. Census Bureau, yet they account for just under 6% of the nation’s CEOs, according to the U.S. Department of Labor’s Bureau of Labor Statistics (BLS).

Americans of Hispanic or Latino descent make up about 19% of the U.S. population, according to the Census Bureau, yet they account for just under 8% of the nation’s CEOs, according to a study by Zippia.

Fortune 500 CEO representation for both African-Americans and Latinos is slightly lower than that of the generic CEO figures, but even those numbers are steadily rising.

Proponents of affirmative action have long argued that racial disparities in education and business and  other areas of American life are essentially proof of ongoing systemic discrimination that can help be remedied with the application of race-conscious practices.

Opponents of affirmative action disagree and often argue that disparities are not necessarily in-and-of-themselves proof of discrimination, and that preference regimes are unfair and amount to reverse discrimination against applicants many deem more qualified.

Conservatives tout meritocracy in hiring and admissions while liberals claim the starting line in the race makes the very question of merit complicated at best.

There is a general consensus in the U.S. that racism persists and many people believe that the dual legacies of slavery and segregation are present today via failing schools, inadequate housing, unequal access to education, income inequality and unsafe neighborhoods.

The debate over how best to address those disparities is contentious to say the least, and will likely continue for the foreseeable future.

Howard County Chamber of Commerce President and CEO Leonardo McClarty said that while SCOTUS’ decision may indirectly “spillover into the business community,” companies would nevertheless be wise to maintain their commitment to having a diverse workforce.

“Employers especially publicly held companies are beholden to shareholder interest. Thus, they will operate in a manner that leads to profitability. Equally important is the fact that many young people-Millennials and Gen Z are looking for diverse work environments and ask questions during interviews as it relates to commitment to diversity, equity and inclusion. One cannot fake authenticity as it will be evident by the causes you support and faces people see in key leadership positions. As such, businesses that do not operate with DEI internally or that are not socially responsible will find themselves losing top talent which has a direct impact on profits.”

Frederick County Chamber of Commerce President and CEO Rick Weldon said SCOTUS’ decision is unlikely to have much of an impact on corporate diversity.

“In my experience, most private sector companies never really adopted the kinds of documented preference-based recruitment approaches covered by the North Carolina and Harvard SCOTUS rulings. That doesn’t mean that an employer wouldn’t take the opportunity to fill a specific job with a qualified minority candidate, just that they wouldn’t implement and document a policy to memorialize that practice.”

“During the COVID pandemic, when we found it impossible to gather our members together for in-person training and seminars, we hosted a series of sessions on the topic of D/E/I and employment. It turns out that there are numerous ways to diversify a workforce short of designing hiring practices to create preferential hiring decisions. My reading of the majority opinions in those cases is that it’s specifically targeting those types of initiatives,” Weldon added.

“I don’t know if numbers in-and-of-themselves are evidence of discrimination,” Cook said.

However, Cook said the disparities that are evident in education, are the result of systemic inequities.

“Part of what we see in the enrollment of post-secondary education is also a function of what we see at the K-12 level and what we see in housing. We know that disproportionately students of color tend to be in lower resourced K-12 systems. We continue to have segregated housing in large parts of the country. We know that students of color disproportionately come from low-income households.”

Cook said affirmative action gives students of color a better chance at opportunities they might not otherwise have simply because of life circumstances.

Gonzalez said preference policies allow many institutions, particularly universities, to avoid addressing the root causes of racial disparities.

“Nobody is taking a look at the causes of disparities. What they try to do is by decree rig the outcome. And that is much easier. Universities will continue to do that but will now try to find a proxy for race…Nobody wants to undertake the heavy work of fixing the causes of disparities, which has to do with really bad schools. Minorities tend to go to really bad schools. Also, family formation-solving the out-of-wedlock birth crisis. That takes time. But it can be done. But you have to put a lot of effort into that. You don’t have to put a lot of effort into assigning a program of numerical proportionism.”

Cook said the proxy question is likely off the table because of some of the language Chief Justice John Roberts used in writing the majority opinion and because of statements by some conservative politicians saying they will be on the look out for universities that try to find wiggle room around the decision.

“I don’t think schools are going to use proxies. That being said, most schools still have a commitment to having an extremely diverse learning environment. And, so, I think schools through their admissions offices are going to use this as an opportunity to explore new ways to ensure that diversity-but being very careful not to run afoul of what the Supreme Court has said about the use of race.”