There’s no doubt that you shoot yourself in the foot when you promote workplace discrimination in any form. Racial minorities, women, and members of the LGBTQ+ community make up a huge chunk of society and with diverse backgrounds, ideologies, and beliefs come a vast pool of talent. Why would a hiring manager keep their organization from growing by turning their back on talent?
Historically, workplace discrimination has been catastrophic for the economy. For example, before Nazi Germany extracted Jews from the workplace in the early 1930s, Jews were leading 15% of senior management in German companies that were part of the Berlin Stock Exchange. When these executives were stripped of their titles, their positions were unable to be well replaced. New management lacked the same skills and experience.
The consequences of this were immediate and long-lasting. After 1933, companies on the Berlin Stock Exchange saw their stock prices and profits plummet, hurling Germany’s economy into a depression that had people pointing fingers, specifically at Jewish people. On the economic front, the country had already been suffering from hyperinflation and the “war guilt clause” of the Treaty of Versailles, which held Germany responsible for World War I and demanded the country repay 132 billion gold marks ($269 billion today) in war debt. When the American stock market crashed in 1929 and caused a worldwide ripple effect, Germany had no hope of climbing from its deep financial hole. The companies who expelled their Jewish leadership shot themselves in an already bleeding foot; they did not recover for the next ten years.
It’s no different today. The effects of workplace discrimination are simple (lack of diversity equals lack of growth), but also have deep, intricate impacts on the individual level. From decreasing someone’s standard of living, barring them from certain jobs for which they are qualified, to increasing anxiety levels of people who face hostile work environments, none of the consequences are positive.
When you hurt acceptance, whether it’s during the hiring process or within the office itself, you hurt diversity, and when there is less diversity and acceptance, you cripple productivity. And that’s when the economy suffers.
This idea can be traced to the 1950s, a time when the Civil Rights Law had yet to exist and discrimination was the norm. University of Chicago economist Gary S. Becker argued that employers who discriminate keep them from filling their organization with productive, talented individuals. Less diversity means less productivity, which also means less profitability.
This logic has not changed in more than 70 years. A 2013 report from the U.S. Congress Joint Economic Committee found that a better chunk of the top 50 Fortune 500 companies who embraced diversity increased profitability. In addition to hurting your own success when you discriminate, Becker also argued that it keeps you behind competition who do promote inclusion. In this lies a full-circle cycle of negative economic effects.
And yet, the same issues that workers faced in the 1950s are similar to those that exist today. As recently as 2013, while federal laws prevented workplace discrimination based on race and gender, there were no laws that protected the LGBTQ+ community. It wasn’t until November 2013 that the Employment Non-Discrimination Act (ENDA) was passed and directly protected workplace issues of harassment, hiring rejection, and discrimination based on sexual orientation and gender identity specifically. This was an issue since the Joint Economic Committee found that more than one in five LGBTQ+ workers faces some form of discrimination in their lives, according to a study conducted by the Pew Research Center.
Like most social issues, however, passing bills that prohibit discrimination doesn’t eradicate the problem. Just because there are laws against workplace prejudice does not mean that it’s not done in secret. What’s to stop a hiring manager from rejecting a woman in an interview and telling her that it’s due to her lack of skills or experience? He’s not going to tell anyone that it’s really because of sexism.
I loved this article on why empathy is an essential part of inclusion. When we listen to and connect with one another, we build trust and support–and that makes an environment where everyone can thrive. https://t.co/oFKqjPgQOE
— Katharine Manning (@kl_manning) April 26, 2021
Workplace discrimination in today’s society boils down to lingering stigmas and stereotypes from generations before. All the laws in the world can’t change the prejudice in someone’s heart overnight. That’s why community is so important in the professional world; it’s not always about the dollar signs. Coming together for shared values, identities, and experiences is crucial for groups who are underrepresented and have historically faced discrimination in their daily lives. The fight for change is ongoing but, by recognizing the strides already made, the real progress begins.
Get The Tempest in your inbox. Read more exclusives like this in our weekly newsletter!