Analyzing DEI’s Future in the US Amidst Challenges

In Union County, South Carolina, the formerly prosperous cotton mills that once employed numerous residents have vanished. Today, the county is labeled a “food desert,” indicating that a significant portion of its inhabitants reside at a distance from the closest supermarket. Addressing this challenge, community non-profit leader Elise Ashby initiated efforts in 2016, working alongside farmers to deliver affordable boxes of fresh fruits and vegetables across the county, where roughly 30% of the citizens are Black and nearly 25% experience poverty.

At first, Ms. Ashby financed the project using her own savings and minor grants. But in 2023, her work gained substantial support as the Walmart Foundation—the charitable arm of one of the country’s largest companies—awarded her organization more than $100,000 (£80,000). This funding was included in a larger $1.5 million initiative designed to assist “community-based non-profits led by people of color.”

“It brought me to tears,” she admitted. “It was one of those moments where you realize that someone truly sees and values your work.”

Just two years ago, programs like this were widely backed by major corporations across the U.S., as the country reckoned with systemic racism following the 2020 murder of George Floyd, a Black man who died under the knee of a Minneapolis police officer.

Yet, several of these companies are now withdrawing from those pledges. In November, Walmart revealed it would end certain diversity programs, including the closure of its Center for Racial Equity, which had played a key role in providing Ms. Ashby’s grant.

Companies like Meta, Google, Goldman Sachs, and McDonald’s have taken similar steps, indicating a wider corporate retreat from diversity, equity, and inclusion (DEI) programs.

This transition signifies a significant cultural shift, partly fueled by concerns over potential legal issues, regulatory examination, and negative reactions on social media—pressures intensified by the current U.S. president.

Since assuming office in January, Donald Trump has vigorously attempted to dismantle DEI programs, promoting a revival of “merit-based opportunity” within the United States. He has directed the federal government to abolish DEI initiatives and commence inquiries into private companies and educational establishments suspected of participating in “illegal DEI practices.”

During the initial months of his second term, the Department of Veterans Affairs shut down its DEI offices, the Environmental Protection Agency put nearly 200 civil rights staff on paid leave, and Trump ousted the nation’s top military general—a Black individual—after the defense secretary had earlier recommended his removal because of his connection to “woke” DEI strategies.

At first sight, it might appear that the U.S. has forsaken efforts to better outcomes for racial and identity groups historically marginalized. However, some specialists propose that these efforts might continue, perhaps under alternative names that better align with the evolving political environment of a country that has recently elected a leader devoted to opposing “woke” policies.

The Roots of the Backlash

DEI-style programs first gained momentum in the U.S. during the 1960s in response to the civil rights movement, which sought to expand and protect the rights of Black Americans.

Originally described with terms like “affirmative action” and “equal opportunity,” these initiatives were designed to address the enduring effects of slavery and the systemic discrimination perpetuated under Jim Crow laws.

As social justice movements expanded to include women’s rights, LGBTQ+ advocacy, and racial and ethnic diversity, the language describing these efforts widened to embrace “diversity,” “equity,” and “inclusion.”

Within businesses and government institutions, DEI efforts primarily targeted hiring strategies that portrayed diversity as a financial benefit. Supporters contend that these programs tackle inequalities across different communities, though a significant focus has traditionally been on racial equity.

The drive for DEI escalated in 2020 during the Black Lives Matter demonstrations and rising calls for societal change. For example, Walmart committed $100 million over five years to create its Center for Racial Equity. Wells Fargo named its first chief diversity officer, while firms like Google and Nike already had similar positions established. As a result of these developments, S&P 100 companies generated over 300,000 new jobs, with 94% of them awarded to people of color, per Bloomberg.

Nonetheless, as swiftly as these initiatives grew, a conservative pushback arose.

Stefan Padfield, the executive director of the conservative think tank National Center for Public Policy Research, contends that DEI programs inherently separate individuals based on racial and gender differences.

More recently, critics have intensified their arguments that DEI efforts—originally designed to combat discrimination—are themselves discriminatory, particularly toward white Americans. Training sessions that highlight “white privilege” and systemic racial bias have drawn heavy criticism.

The roots of this opposition stem from conservative resistance to critical race theory (CRT), an academic framework that suggests racism is deeply embedded in American society. Over time, campaigns against CRT in schools evolved into broader efforts to penalize “woke corporations.”

Online platforms like End Wokeness and conservative personalities such as Robby Starbuck have leveraged this feeling, directing attention to companies for their DEI efforts. Starbuck has taken credit for changes in policy at firms like Ford, John Deere, and Harley-Davidson after revealing their DEI programs to his audience on social media.

One prominent success for this movement occurred in spring 2023, when Bud Light encountered significant backlash for collaborating with transgender influencer Dylan Mulvaney. Boycott calls targeting the brand and its parent firm, Anheuser-Busch, led to a 28% drop in Bud Light sales, according to an analysis by Harvard Business Review.

Another significant milestone occurred in June 2023, when the Supreme Court decided that race could no longer be considered in university admissions, effectively ending decades of affirmative action policies.

This ruling raised questions about the legal basis of corporate DEI policies. In the wake of the decision, Meta notified employees that “the legal and policy landscape surrounding DEI has shifted,” shortly before announcing the end of its own DEI initiatives.

Corporate Retreat: A Question of Authenticity

The swift reversal of DEI initiatives among large corporations prompts questions regarding the genuineness of their dedication to workforce diversity.

Martin Whittaker, CEO of JUST Capital—a non-profit conducting surveys on workplace issues—suggests that numerous companies initially adopted DEI initiatives to “appear favorable” following the Black Lives Matter movement, rather than from an authentic commitment to change.

Nevertheless, not all corporations are succumbing to political and legal pressures. A report by the conservative think tank Heritage Foundation indicated that although DEI programs seem to be diminishing, “nearly all” Fortune 500 firms still incorporate DEI pledges within their official declarations. Furthermore, Apple shareholders recently voted to preserve the company’s diversity initiatives.

Public sentiment on DEI is polarized. A survey by JUST Capital indicates that backing for DEI has decreased, yet support for associated matters—like equitable pay—remains robust. Likewise, a 2023 Pew Research Center survey revealed that a majority (56%) of working adults still perceive workplace DEI initiatives as advantageous.