How Large Tech Permits the Racial Wealth Hole to Persist


Since President Biden signed law last week making June thenth a federal holiday, there has been no shortage of corporate displays of goodwill. Google dedicated its famous “Doodle” to the holiday, and many companies have declared that they will be celebrating June thirtieth as a paid holiday.

As Republicans legislate and pass laws in state governments across the country that seek to limit the role of racism in American history, tech firms and other big corporations have joined the Democrats in condemnation.

But what actually happens in these companies? A report released last week by the Conference Board, a corporate research firm and group of companies, showed that while conversations about the confrontation of race and racism may increase, real justice in the workplace does not.

The wage gap along the race line is widening, particularly “in industries, occupations and locations that have the fastest growth in high paying jobs,” the report’s authors found. The leading among these industries, they wrote, is big tech.

The earnings gap has widened over the past decade: Black men with bachelor’s degrees earned 24 percent less than white men with university degrees in 2019 – a significant decrease from 2010 when the wage deficit was 18 percent. For black women, the wage difference compared to white men was 26 percent – also significantly worse than in 2010.

Big tech has contributed greatly to this trend: While blacks make up 13 percent of the US workforce, only 4 percent of top earners in the tech sector were black in 2019, less than the already low 6 percent in other industries. At Google, black employees made up just 4 percent of the workforce last year.

Although the tech sector has produced many millionaires over the past decade, relatively few have been black. “If you look at the percentage of black workers in the technology industry, their percentage has not increased,” said Gad Levanon, founder of the Labor Market Institute at the Conference Board and lead author of the report, in an interview. “If anything, it’s shrinking.”

A separate study by RateMyInvestor last year looked at nearly 10,000 tech entrepreneurs and 135 venture capital firms. It found that among the founders of technology projects that had been given venture capital, only 1 percent were black.

While tech companies have taken steps to increase transparency about racial inequalities in their workforce, especially since the Black Lives Matter organization’s surge in 2014, they have taken few concrete steps to address the issue, Y said -Vonne Hutchinson, workplace diversity expert and founder of the diversity and inclusion company ReadySet.

“Since those conversations began in 2014, there have been many opportunities for tech to self-regulate – it just hasn’t done a good job,” said Ms. Hutchinson, whose upcoming book is titled How to Talk to Your Boss About Race “Carries: Talking without shutting down,“ said in an interview.

“We are still seeing incredible differences – and in some cases even declines – in executive and executive representation of tech companies,” she said. “And that certainly drives the racial prosperity gap.”

Still, that loophole has not been a major subject of investigation in any of the recent high-profile hearings where technology leaders testified before the Senate and House committees. Ms. Hutchinson said that with increasing bipartisan talks in Washington about regulating the tech industry and enforcing antitrust law, there is a lack of an accompanying focus on promoting racial justice.

As a member of the Institute for Global Law and Policy at Harvard Law School, Ms. Hutchinson said the Biden government has the ability to enforce anti-discrimination protection through the Department of Labor and Justice.

“We hear the conversations about racism and the persecution of diversity, justice and inclusion and that technology companies are still very homogeneous,” she said. “And sometimes we even get conversations about how this will affect the platforms they are building and what broader implications they have.”

She added, “But we really stop for a moment when we look at: what protection do we offer workers and tech companies, and how far are we ready to go in enforcing anti-discrimination laws?”

Ms. Hutchinson called for more “boots on the ground to review claims,” ​​pointing out that “the enforcement arms of the Department of Labor have been gutted under the Trump administration,” preventing the agency from fully addressing many discrimination claims.

It wasn’t until 2014 that Apple, Facebook, Google, and Microsoft started publishing diversity reports, let alone hard targets for improvement. Five years later, Wired magazine conducted a survey to see how much progress the companies had made. It found that Apple, Microsoft, and Google had all increased black employment company-wide by less than 1 percent.

There are also strong gender differences among technology companies, with white women earning 19 percent less with degrees than white men with bachelor’s degrees. However, Wired found that technology companies had much greater success at tackling gender imbalance than at tackling racial inequality during this five-year period.

Amazon hasn’t created diversity reports for its technology team, but its website shows that last year 31 percent of its workforce was black, compared with just 7 percent of corporate employees and 4 percent of senior executives.

These statistics are driven by structural inequalities, both in access to education and in the personnel and recruitment structures within the companies themselves.

The Conference Board report pointed out that a driving factor behind the lack of diversity in the tech sector was the fact that many of its top companies had chosen to open their offices in cities and suburbs with relatively small black populations, including Seattle , San Jose and Austin.

It found that when companies opened new offices in more black cities like Atlanta and Washington, they were more likely to hire black workers into their ranks.

“Many of the fastest growing areas in tech are areas with very few blacks, like Seattle or Austin, Texas,” Levanon said. “So that makes it harder for tech companies in these areas – they are almost, by definition, less likely” to hire black workers.

With businesses now relying more on remote working, especially white-collar workers, the report’s authors saw an additional opportunity to reach a more diverse workforce through remote hiring, even for companies in big tech’s starkly white and Asian hub cities.

Ms. Hutchinson said there is a fundamental need to address the role of racism in everything, including education opportunities and decisions about who will be hired and promoted. “When it comes to this report and these discussions in general, the only way to get the right policy initiatives is if we address the issue in a concrete way,” she said. “In the past we weren’t really good and we didn’t see any social interest in fighting racism in the workplace. We have to be able to talk about that. “

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