House Democrats have a plethora of initiatives in the new Congress. One of the top priorities for the Congressional Black Caucus and incoming Financial Services Committee Chairwoman Maxine Waters is corporate boardroom diversity. Waters proposed creating a House subcommittee on diversity and inclusion that would force companies to quantify their board members by race and gender. By targeting publicly traded companies, this creates a vacuum that would ultimately harm employees of all racial and economic backgrounds, especially the further down the chain you go.
The government should foster diversity through individual success, not through federal coercion. You can hear it in the words of proponents of the newest overreach in Washington. “They have a right to be nervous,” said Emanuel Cleaver of Missouri while talking about corporate boards. Many companies on Wall Street and in Silicon Valley understand that the efforts are more a matter of paying tribute to Washington, rather than a substantive effort to increase diversity in the upper echelons of business.
Other proposals from the left carry the same thread as the one recently championed by Waters. Gregory Meeks of New York wants to force all publicly traded companies to disclose the demographic data of boards of directors. Carolyn Maloney of New York wants to grant the Securities and Exchange Commission new regulatory authority over gender diversity.
{mosads}A number of companies have already set aside positions for women and people of color out of fear of a coming federal mandate. Citigroup announced it would increase the proportion of black managers by a third over the next three years. By setting such targets, the company is creating a quota system instead of one that will build diversity in the long term. There are certainly good intentions behind these efforts, but they create an artificial floor that dilutes the talents of minority applicants. People should not have to wonder, “Was I hired simply to check a box?”
Now that Democrats are eyeing the 2020 presidential race, they face the uncomfortable reality that they lack minority staffers. In fact, the 2016 campaign leadership for Bernie Sanders was almost exclusively white. Among all senators, of which nearly a dozen are Democrats weighing campaigns, only three have black chiefs of staff. Two of the three serve Republican Tim Scott of South Carolina and Republican Jerry Moran of Kansas. Before Doug Jones won the Alabama special election, Senate Democrats had zero black representation in their top administrative staff.
The bigger point, however, is that government diversity mandates have poor results. Rather than letting the most skilled participants rise to the top regardless of gender or race, companies, schools, and agencies are concerned with filling quotas. Training required by the government often does not yield the desired results. In fact, they often wind up failing, according to Harvard Business Review. Furthermore, such diversity programs often harm employees. Among companies that use written hiring interview questions to prevent unconscious bias, the result is a reduction in the share of minority applicants in management positions.
On the flip side, companies that implement voluntary training are far more likely to increase diversity in their ranks. Similarly, companies that create autonomous teams, which allow employees to rely on their strengths, are more diverse than companies that mandate diversity. “Your organization will become less diverse, not more, if you require managers to go to diversity training, try to regulate their hiring and promotion decisions, and put in a legalistic grievance system,” states Harvard Business Review.
Mandates that do not properly work in the free market do not magically become effective when ported over to social engineering. Like Waters, I want to see more qualified people of color and women represented in government and business. But what she and her colleagues are pushing will likely result in the opposite. Once the federal government has this authority on diversity, does anyone truly expect efforts to end here?
The Democrats are aiming for such measures and much more now that they are back in control of a fraction of the government. Imagine what would happen if Democrats also had the White House and the Senate. Add a couple of Sonia Sotomayors and Ruth Bader Ginsburgs to the Supreme Court and these proposals are merely a starting point. Federal power rarely, if ever, shrinks. Using such diversity mandates as a cudgel, rather than working through market forces, will not only harm those they intend to help, but will also lead to dramatic increases in federal power.
The unconscious bias of the Democrats in Congress reminds me of a tale from the Second World War. American bombers being shot to pieces by Nazi planes limped in with heavy damage. The first response of engineers was to better armor the areas that were heavily damaged, but instead mathematician Abraham Wald saw the holes represented places that the planes could be hit and still survive. The delicate areas of the planes were the ones not showing up in the surviving planes. The Democrats say they are serving the purposes of diversity by doubling down on policies that have failed for decades. They are armoring the wrong part of the plane.
Kristin Tate is a libertarian writer and author of “How Do I Tax Thee? A Field Guide to the Great American Rip-Off.” Follow her on Twitter @KristinBTate.