Workplace diversity schemes have a problem – but that doesn’t mean Trump is right to axe them

Donald Trump’s inauguration was marked by a doubling down against programmes of diversity, equity and inclusion (DEI). Among the executive orders he signed during his first days as US president, two were targeted at DEI. The focus was on federal government but the intention appears to be that this should also extend to other American workplaces^[1]. And it comes as Meta and Amazon^[2] are also retreating from diversity programmes.

In Trump’s directive^[3], DEI is said to undermine “traditional American values of hard work, excellence, and individual achievement” in favour of an “identity-based spoils system”. But the move dismayed^[4] many workers. It doesn’t just seem regressive, but it also appears to make poor business sense – advocates argue that attention to diversity and inclusion^[5] can offer higher performance and profits.

Trump appears to believe DEI offers unfair advantages on the basis, for example, of gender or ethnicity. But an alternative view could be that DEI is a necessary response to a situation where certain groups (often men, typically white, and generally from privileged backgrounds) have benefited from unearned advantages to maintain their grip on power.

Here, DEI is a response to the idea that simply belonging to these traditionally advantaged groups can be perceived as “talent”. This comes at the expense of typically marginalised groups, who are subject to discrimination and unconscious bias. From this perspective, hostility to DEI might be seen as a way for the traditionally privileged groups to remain dominant.

Both sides are apparently in favour of merit as the ultimate goal, although they have different views on what this means and how it is achieved. This suggests a paradox.

But is there any reason to worry about the widespread use of DEI? Based on my research^[6] with firms in the City of London, I think the answer is yes (though for very different reasons than the president suggests).

This raises the question of what (or whose) purpose corporate commitments to DEI actually serve. Common sense would suggest that a primary function is to ensure people can access positions that would previously have been closed off to them.

Yet it is also worth remembering that where, for example, more women become corporate lawyers or senior financiers, this has no bearing on wider inequalities^[7] in society. In fact, in a further paradox, my research has found that some of the organisations most likely to express their commitment to DEI are also implicated in generating these inequalities.

I researched diversity and inclusion practices in elite financial and professional service firms. These firms have played a key role in orchestrating a form of “rentier capitalism”, where small elites control the means of generating wealth. This system has much wider detrimental effects, as where wealth is increasingly concentrated towards the top, one consequence is stagnating incomes for the middle and working classes^[8]. This in turn drives insecurity and widens the wealth gap.

This, of course, is not the fault of people working in these firms. But overall this system desperately needs legitimacy. This is more difficult when senior jobs at the centre of this model of “financialised capitalism” are mostly taken by those from historically privileged groups. Put simply, it makes them look bad.

One way they can ensure legitimacy is to shout about their commitment to DEI. This can help suggest that the system is merit-based, as access to these “top jobs” seems fairly distributed while rewards appear justly deserved. Most recently, these impressions have been generated by a vocal commitment among these organisations to promoting “social mobility”^[9].

Opening access to a wider demographic, while good for the organisation and individual staff, has no impact on underlying inequalities. Yet in practice, these measures lack some efficacy. In fact, by offering an impression of change in terms of who occupies the top jobs, DEI can help legitimise and sustain an unequal status quo.