Big Business And Race Preferences

In the immediately preceding post I criticized a page one Washington Post headline for declaring “broad support” of Michigan’s race policies when the text of its story — and an internal headline that does not appear online — more accurately describes the amicus briefs filed by Fortune 500 companies and other preference-practicing universities as “elite support.”

But elite or not, big business support of race preferences deserves more scrutiny than it has received, including in the Post story just mentioned. Here I would like to discuss two aspects of that support — one unprincipled and unappealing, and the other much worse.

The unprincipled and unappealing aspect is the claim of large corporations that their bottom line requires them to have a well-trained “diverse” workforce because they have “diverse” clients and customers. There is a deja vu, turn-back-the-clock aura over this argument, for it is the same argument that businesses in the South made in their effort to have “customer preference” recognized as a legitimate “business necessity” exception to the Civil Rights Act’s ban on discrimination in employment. They failed. “Customer preference” was flatly rejected by the Congress and the courts as a legitimate excuse to employ what we would now call racial preferences in hiring. To accept that argument now would require the rejection of settled law over the past generation, and recognition that, say, a Nieman Marcus or any business serving primarily rich white customers who preferred dealing with white salespeople would be justified in giving preferences to white applicants. It would also justify any company whose business was primarily with Arabs or Muslims refusing to hire Jews.

A closely related argument, put forward by General Motors in its amicus brief to the district court, is that “only a well-educated, diverse workforce can maintain America’s competitiveness in the increasingly diverse and interconnected world economy.” That may well be true, but even if true is that a justification compelling enough to justify discrimination on the basis of race? If that is acceptable as a justification for discrimination, then an industry or company whose experience — or reliance on some social science data that now exists — convinced it that too much “diversity” in its workforce led to friction and conflict would, in the name of competitiveness and profits, be justified in limiting its diversity.

The trouble with abandoning the principle against racial discrimination is that you wind up with more racial discrimination, some of which you may not like.

So much for unappealing and unprincipled; now for what’s worse. There is some evidence, reported most fully in the Chronicle of Higher Education over two years ago, quid pro quo between big business and big universities to build a “pipeline” to supply minority employees. (Link requires subscription; the article is “How Michigan Won Corporate Backing for Affirmative Action,” Chronicle of Higher Education, November 24, 2000, p. A21)

Many businesses are increasing their philanthropic support for those higher-education institutions that seem most adept at supplying them with black, Hispanic, or American Indian employees, and some are specifically directing their dollars toward those institutions. In many cases, the companies are paying the tab for scholarships, internships, and mentor programs for those prospective workers, thereby bolstering the colleges’ own efforts to recruit and retain minority students.


For their part, colleges increasingly see providing specific companies with minority recruits as a key part of their missions, and are working with the companies to become better pipelines of minority talent. The trend is especially pronounced in business, engineering, the sciences, and other fields where minority employees are in high demand, and where academic programs tend to rely heavily on corporate benefactors.

Besides the educational benefits of a diverse campus, and the sense that graduating a diverse work force fulfills the university’s mission, Michigan officials say corporate interest in diversity is a major reason for their defense of affirmative action. “We, and all colleges, are under pressure by industry to increase diversity,” says Stephen W. Director, dean of the College of Engineering at the University of Michigan at Ann Arbor.


At Michigan’s engineering school alone, company support for minority scholarships and programs amounts to about $800,000 annually, up more than 180 percent from five years ago, Mr. Director says.

The engineering school received a total of $5.6-million in corporate donations last fiscal year, and much of the unrestricted support that companies give it also is based on its track record in producing minority graduates, Mr. Director says. The school spends a large chunk of that money on minority students and programs. Members of “underrepresented” (meaning non-Asian) minority groups account for about 10 percent of its 6,700 undergraduate and graduate students.

It looks as though Michigan is being paid to discriminate, or at least that Michigan thinks it is being paid to discriminate.

Officials at the University of Michigan say they are afraid that, if they are precluded from maintaining affirmative action in admissions, the university’s corporate benefactors would go elsewhere, spending their philanthropic dollars at private colleges, historically black colleges, and other institutions where minority recruits are plentiful.

“Our best corporate friends are telling us that the diversity of our student body is absolutely essential to their attachment to the school,” says B. Joseph White, the dean of the business school at Michigan.

It’s not surprising that big business is paying what we might call “big education” to deliver what it wants, nor even that universities are greedily supplying it. But it does remain surprising, although less so with the passage of time and our increased familiarity with new liberal principles, that liberals think this arrangement a Good Thing. By now they may not even have any interest in complaining if it were to be discovered that, say, Texaco or Exxon or Haliburton gave big money to the University of Texas to produce energy engineers on the condition that none of it went to Jews, since they couldn’t use them in the Middle East. They certainly have no principled basis left for any such complaint.

Say What? (4)

  1. Cobb February 11, 2003 at 6:25 pm | | Reply

    I think that the proper reading of the ‘customer preference’ argument is actually something more subtle.

    What I believe corporations are trying to say is that if they were not successful in hiring blacks and hispanics, they would not be successful in selling to them. I believe that their histories attest to this fact.

    My mother could not buy haircolor from Clairol years ago. Until Essence magazine, there was no fashion industry for black women. Many women who got their start at Essence and Ebony Fashion Fair and know the black women’s market are now employed by major marketing firms. The business has gone mainstream not because the same whitefolks figured the magic formula. They literally had to throw up their hands and admit that they didn’t know how.

    Now what Fortune 500 company is going to make that kind of statement flat out? None of them. They will couch it in the appetizing rhetoric of diversity.

  2. Cobb February 11, 2003 at 6:42 pm | | Reply

    apropos my other post on nsbe, i think what you will find, if you care to expose it, is a network of private non-profit organizations who are dedicated to do, with regard to getting ghetto kids into big corporations through colleges, what affirmative action falls short of doing.

    in other words the diversity industry with the dollars that are making certain universities attractive to certain corporations is in the hands of well placed blacks and latinos who have control of community relations, public relations, college recruiting and other marketing budgets. they are working through personal contacts and various non-profits to steer those dollars to the same neighborhoods where they grew up.

  3. Brian February 17, 2003 at 5:21 pm | | Reply

    “…if they were not successful in hiring blacks and hispanics, they would not be successful in selling to them.” If companies really believe this, then they are being run by idiots. Rather than hiring someone of a speicfic race and praying that they can represent an entire segment of the population, a more effective way to gather such information would be to use focus groups and/ surveys. A non-asian friend of mine often goes to China to test hair-care products on real-live chinese people. Turns out their water supply, washing techniques and genetics alter how shampoos act on their hair. This approach sounds to me to be much more scientific than simply hiring a person with asian features.

  4. Customer Preference April 17, 2012 at 7:31 am |

    […] is not a justification for discriminating on the basis of race, as I discussed, among other places, here. In light of current circumstances the EEOC has had to reaffirm this principle: Narinder, a South […]

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