Despite Backlash, DEI Programs Drive Economic Gains and Expand Opportunity

As diversity, equity and inclusion (DEI) programs face political and legal rollback across the U.S., research continues to show they offer measurable economic and societal benefits.

According to MILWAUKEE INDEPENDANT, Though the term DEI gained popularity in the 21st century, its principles have deep roots in American history — from the ideals of the Constitution to the Civil Rights Act of 1964 and affirmative action. These initiatives sought to expand access to economic, educational and civic life. DEI programs are their modern legacy.

Critics argue DEI fosters ideological conformity and undermines meritocracy, disadvantaging white Americans. Supporters counter that DEI promotes democracy and expands opportunity. But beyond ideology, data points to clear outcomes: DEI can boost performance.

Studies show companies with diverse teams outperform their peers in revenue, innovation and worker satisfaction. A 2023 McKinsey report found that businesses with more gender and ethnic diversity were 39% more likely to financially outperform those with less. Diverse hiring also appeals to consumers: A 2021 survey found two-thirds of U.S. shoppers consider diversity in their purchasing decisions. When companies pull back — as Target did — they often face backlash and declining sales.

Beyond corporate profits, DEI policies have reshaped access to education and work. The number of Black college students has more than doubled since the 1970s. Women — especially white women — have outpaced men in college completion since affirmative action was introduced. The 1965 Immigration Act also opened the U.S. to more diverse talent, fueling innovation and economic growth.

Yet DEI comes with costs. In 2020, U.S. corporations spent an estimated $7.5 billion on such programs. In 2023, federal DEI spending exceeded $100 million. DEI also faces increasing legal scrutiny and political opposition. More than 30 states have proposed or passed anti-DEI legislation.

Still, racial and gender pay gaps persist, and research suggests systemic racism has cost the U.S. economy $16 trillion since 2000. As the courts weigh DEI's future, its potential to improve inclusion — and profitability — remains clear.

Rather than retreat, the challenge is to refine DEI efforts with transparency, fairness and evidence-based approaches.