The White House released a study on Monday indicating that diversity, equity, and inclusion (DEI) policies have negatively impacted U.S. economic productivity by promoting unqualified managers, leading to inefficient management and slower economic growth [1]. The study analyzed federal data by industry, state, and year, focusing on the representation of Black, Hispanic, and indigenous people in management roles, but did not include gender, sexual orientation, or Asian representation [1].
According to the report, the representation of these minority groups in management increased by less than 1% from 2005 to 2015, but then rose by nearly four times that amount from 2015 to 2023 [1]. Industries that heavily pursued DEI by promoting minority managers were found to be about 2.7% less productive than those that did not as of 2023 [1]. In contrast, the increase in minority nonmanagers did not show a significant impact on productivity [1].
The study estimates that managerial inefficiencies from DEI promotions have slowed economic growth, resulting in U.S. GDP in 2023 being $94 billion, or 0.34%, lower than it would have been without DEI policies [1]. This equates to an average economic drag of about $1,160 per household with two working adults in 2023 [1]. The report also notes that these inefficiencies have led companies practicing DEI to hire fewer people and pay workers less, further reducing aggregate output [1].
The authors clarify that there is nothing inherently less productive about minority workers or managers, citing that the negative productivity effect only emerged after 2017 and is linked to the rapid promotion of unqualified workers to meet DEI quotas [1]. The report also highlights a potential stigma for qualified minority managers, who may be perceived as DEI hires, referencing a phenomenon studied in a 1993 report [1].
The study contrasts its findings with earlier research showing that reductions in labor market discrimination, such as those following the Civil Rights Act, increased productivity and GDP by better matching workers to suitable jobs [1].
CONCLUSION
The White House study concludes that DEI-driven promotions of unqualified managers have imposed a measurable drag on U.S. economic growth, reducing 2023 GDP by $94 billion. The findings suggest that while diversity itself is not detrimental, the method of rapid, quota-driven promotions may be counterproductive for both businesses and qualified minority managers.