Race In The Workplace

'Every black person in every corporation has to ask: `If I were white, where would I be now?' " --A black manager at Massachusetts Mutual Life Insurance Co. in Springfield

"Minorities get too fair a shake. And pretty soon we won't be able to afford the luxury." --A white stockbroker at Dean Witter Reynolds Inc. in New York

Call it affirmative action. Or minority outreach. Or perhaps you prefer "managing diversity,"the newest, politically well-scrubbed name for policies aimed at bringing minorities into the business mainstream through preferential hiring and promotion. But however you describe such hiring based on race, U. S. society must come to grips with a sobering fact: Some 25 years into a national drive--and 50 years since the government first embraced the idea--to give blacks and other minorities a foothold in white, male-dominated Corporate America, the ideal of racial equality remains elusive, and the means of attaining it increasingly controversial.

Affirmative action encompasses both race and gender. Indeed, women have been among its greatest beneficiaries. But the discussion of race stirs the fiercest emotions. And as Washington's nasty partisan battle over the civil rights bills shows, affirmative action itself remains shrouded in ignorance, mistrust, and political cynicism. "The term conjures up the vilest of connotations," says Virginia Governor L. Douglas Wilder. "It has become like a four-letter word."

It wasn't always that way, of course. In 1964, the Civil Rights Act banned discrimination in employment and ordered that all hiring be color-blind. Affirmative action, established by a series of Presidential directives going back to Lyndon B. Johnson's in 1965, was to make up for past injustices, overcome continuing discrimination, and ultimately to provide equal job opportunities for blacks and whites. Unhappily, those aims sometimes contain a painful contradiction: Compensating for past discrimination against some people can create fresh discrimination against others. When companies make extraordinary efforts to hire or promote mi-nority workers, they may penalize white workers.

OLD-BOY NETWORK. Small wonder that some companies have had trouble accepting the spirit of affirmative action. Not that business has entirely shirked its duty. Since the 1970s, most major companies and many smaller ones have adopted formal written policies to recruit minorities. Result: Affirmative action has produced major gains for black job-seekers. The percentage of blacks in the work force has risen by 50% in the past 25 years--a solid advance even taking into account a larger black population. The biggest gains were in the South and by black women. Many jobs came in government itself, where as many as 850,000 blacks found jobs in the social-welfare bureaucracy from 1960 to 1976. Huge numbers of blacks have moved into the middle class.

In 1989, about 5% of all managers in the U. S. were black. That's a fivefold increase since 1966 and a 30% increase since 1978. Still, there's a long road ahead. Nearly 97% of senior executives in the biggest U. S. companies are white. And while blacks make up 12.7% of the private-sector work force, only 5% of all professionals are black.

Part of the problem for black managers is the so-called old-boy network. Jason Wright, a black vice-president at RJR Nabisco Inc., says: "The reality of life in America is that if you're white, most of the people you know are white. If someone says to you, `Do you know anyone for this job?,' the people you recommend will probably be white."

Furthermore, overall progress seems to be slowing. After dramatic income gains in the 1960s and 1970s (chart), blacks have been losing economic ground for the past decade. And the good-paying manufacturing jobs that once were a doorway to economic security for working-class blacks are harder to come by in an increasingly service-based economy.

The idea that affirmative action isn't moving fast enough or far enough is reinforced by the widespread view in the black community that, ever since Ronald Reagan took office, Republicans have been using the White House bully pulpit to equate preferential hiring with racial quotas. Blacks feel, with some justification, that this is part of a deliberate political strategy to stampede blue-collar Democrats toward the GOP. "Prior to 1980, companies were learning to live with the new order," says John E. Jacob, president of the National Urban League. "After Reagan began to challenge affirmative action, companies began to question it." Result: a decade of backsliding and "a grade of C+ for Corporate America," Jacob says.

While blacks fret that the drive for racial equality is slowing, many whites think it has gone far enough. In happier economic times, companies could give hiring preferences to blacks without necessarily taking away white workers' jobs. That's much harder now. Corporate restructurings have slashed the ranks of middle managers, and new technologies have wiped out millions of low-skill jobs. Now, as the economic pie shrinks, whites increasingly begin to fear that affirmative action puts their careers in jeopardy.

DOUBTS AND QUESTIONS. Even those whites who still support affirmative action in principle think it can lead to too-rapid advancement of unprepared minorities. One white employee at United Technologies Corp.'s Hamilton Standard Div. in Windsor Locks, Conn., says he works for a black foreman who isn't up to the job--and is hurting his unit's morale. "I don't know if he's there because management thinks he's qualified, or because he's black," he says.

Whites aren't the only ones questioning race-based preferences these days. Some black intellectuals, such as Shelby Steele, who teaches at San Jose State University, say affirmative action works against their race. By singling blacks out for special treatment, Steele argues, it stigmatizes them as unworthy and creates a sense of victimization. Such feelings, he says, can stifle attempts to throw off the bonds of dependency and poverty that have plagued many blacks.

Other blacks are equally dissatisfied with preferential hiring, but for different reasons. They acknowledge that affirmative action has expanded opportunity but believe that many companies lose interest in black advancement once a hiring goal has been met. Some black middle managers feel they are being shunted into human resources or public relations--jobs that often spell "dead end" in the corporation.

It's not that way at every company, of course. Some corporations' commitment to equal opportunity goes far beyond lip service and a government mandate--not for altruistic reasons, but for pragmatic ones. Minorities, who now make up 28% of the U. S. population,have become a major force in the domestic economy, and businesses want to reach these growing markets.

"Corporate America isn't stupid," says Henry L. Warren, vice-president for planning and control at Arkansas Power & Light Co. "Companies are able to see that the customers they'll provide service to are changing." To serve these nonwhite customers, companies need a multiracial work force. Furthermore, for a company to ignore the rising numbers of minority workers--nonwhites now account for 22% of the labor market--is to let a valuable talent pool go untapped. Affirmative action "is not just the right thing to do," asserts American Telephone & Telegraph Chairman Robert E. Allen. "It's a business necessity."

But not all managers have come around to this enlightened view (poll, page 63). Many companies hire just enough minority workers to satisfy the government and protect themselves against discrimination suits. "I've had people tell me, `We need a woman for this,' or `I need a black,' " during job interviews, says an investor-relations manager for a New York-based mining company. "Quotas will be set and met in certain staff jobs." (Many workers and executives interviewed for this story spoke on condition of anonymity.)

Black workers contend that once hired, they often meet with indifference or outright hostility. A black woman middle manager who has been with a large New York insurance company for 10 years complains that minority managers have a tough time advancing because plum jobs are often filled before they are ever posted. "It's Corporate America, and we didn't create it. It's their game and their rules."

ASSEMBLY LINE. The current debate over proposed civil rights legislation produces only more anger and confusion. Democrats claim they merely want to restore the intent of civil rights laws by making it easier for minorities to win discrimination lawsuits. Republicans are using the Democrats like a trampoline for pushing that most dreaded of all measures, a "quota bill."

In fact, the passage of the Democratic bill--or a GOP alternative--would make very little difference in how blacks are treated by corporations. That's because affirmative action is now so deeply ingrained in American corporate culture that changes at the margin of the law won't have much impact. The machinery hums along, nearly automatically, at the largest U. S. corporations. They have turned affirmative action into a smoothly running assembly line, with phalanxes of lawyers and affirmative-action managers. "Whether we have new civil rights legislation or not is irrelevant to us," insists AT&T's Allen, who earlier this year tried unsuccessfully to broker a civil rights bill acceptable to both large corporations and minority activists.

Not every corporation functions on automatic pilot. Some highly visible companies, such as IBM, American Express, and Xerox, have embraced aggressive hiring and promotion programs for women and minorities (page 60 44 ). Although these models of equal opportunity cut across diverse fields, the key ingredient often seems to be a sustained top-down push from a chief executive. "Without commitment from a CEO," says Randall Kinder, a black senior vice-president at Equitable Financial Cos., "it just doesn't work."

Price Waterhouse is one firm where the message comes straight from the top. In 1989, as the accounting giant was reeling from adverse publicity from an embarrassing sex-discrimination case, new CEO Shaun F. O'Malley set up an advisory committee on women and minorities. He invited prominent black accountants to serve on the panel. Then, "to make sure everyone knew how important it was, I made myself chairman." Adds O'Malley: "About 6% of our work force is black now. We want more. But more of the best."

In 1973, AT&T settled a landmark government discrimination suit by agreeing to hire and promote more minorities. The court order expired in 1979, but, with CEO Allen pushing hard, the company continues its aggressive recruit-ing of blacks. Today, minorities make up nearly 21% of AT&T's work force. And 17% of the company's managers are minorities, up from 12% in 1984.AT&T also encourages its minority workers' participation in race-based support groups. These forums, which often have branches at every work site around the country, offer black managers a chance to share ideas, solve problems, and develop the networks white men have long relied on. AT&T's Black Managers' Group is one of 12 such affinity groups. All branches of the BMG, which was set up in the early `70s, meet twice a year for two-day conferences. Such race-based advocacy networks are increasingly common among progressive companies.

To get past the emotional charge carried by affirmative action, some employers have embraced a new catchphrase: managing diversity. Sometimes, this is to settle lawsuits. Northwest Airlines Inc. agreed to spend $1.2 million on cultural-diversity training for all managers and to provide cash incentives for managers who meet minority hiring goals. Pillsbury Co. settled a class action, in part by agreeing to spend $1.76 million to set up a "cultural diversity and training fund." The program will, among other things, promote "ethnic cuisine and specialty events in the Pillsbury cafeteria."

Some of these earnest efforts can be easily lampooned. But many companies are serious about making their workplaces more congenial to minorities. DuPont Chairman Edgar S. Woolard Jr. encourages workers to confront their biases in five-day workshops. The company also sponsored an all-expenses-paid conference for black managers to discuss how African-American culture can improve the company's bottom line. Managers who feel their heritage is valued are more productive, says one longtime Du Ponter.

HARD TIMES. Yet plenty of corporations still duck the issue of hiring preferences. One large publisher based in the Midwest scrapped its voluntary affirmative-action plan when it failed to meet its own goals. What went wrong? A company official says it was lack of interest at the top. "There was no buy-in to the program," she says. "It's still a good-old-boy network."

Even the best of corporate intentions can be undone by economic hard times (box). Take Equitable, the New York-based financial-services company. The firm spent years building its image among black managers as a "good" company. Now, after changing top management, Equitable is in the midst of a painful restructuring. Its black middle managers believe that affirmative action has been a casualty and worry that black advancement will suffer.

"We have maintained some semblance of affirmative action," says Darwen Davis, a black senior vice-president and 25-year Equitable veteran. But, he says, because of the company's "financial and internal problems, these are all back-burner issues." For example, the Black Officers' Council Davis used to head no longer meets. Equitable denies that it has reduced its commitment to affirmative action.

For other businesses, distaste for hiring blacks still exists. The owner of a small western Pennsylvania plastics company says he hired a black woman three years ago "to do the right thing." But after he passed her over for promotion, she sued, claiming race discrimination. The case is still in court, but the owner says he won't hire other blacks: "I don't need all the aggravation."

Racial stereotypes persist as well. The owner of a small foundry near Pittsburgh says he has had blacks on the payroll for years and has been fully satisfied with their work. But he says he will not actively recruit them. "It's not like it was in the old days," he says, "when you gave a black man a job and he appreciated it and didn't try to stir things up."

No CEO, surrounded by lawyers and affirmative-action advisers, would admit to such views. But some big companies have established practices that can end up being just as discriminatory. It's called hiring by the numbers.

Affirmative action is not supposed to be synonymous with quotas. But virtually all companies doing business with the federal government must set annual plans, sometimes in the shape of numerical goals or timetables, for in-creasing employment of women and minorities. Companies often agree tomeet specific hiring goals when they settle discrimination suits. In ef-fect, quotas are prohibited and re-quired at the same time--which can make compliance a nightmare.

Since the system encourages companies to focus on numbers of blacks on the payroll, rather than on individuals, companies face no penalty if their policies establish a revolving door, where a fixed percentage of black employees come and go, simply filling the same slots. Presto: instant compliance.

"It can be difficult to get managers to move past the numbers," says William F. Holmes, vice-president at Employment Advisory Services Inc., a Washington consulting firm. "Everything they do is numbers. They have a production quota. Why not just have a human-resources quota?"

There is also some evidence that the current system may be setting a ceiling on minority hiring and promotion. Says Donald L. Huizenga, president of Larson Foundries in Grafton, Ohio: "We don't have to go out and hire minorities because our percentage of minority workers is higher than the community of Grafton. If it weren't, we would be going out and recruiting." In nearly lily-white Grafton, 14% of Larson's work force is black or Hispanic.

Those blacks who make it into management ranks can find life lonely--and frustrating. Of 92 top management jobs at Hughes Aircraft Co., for example, only two are filled by blacks--the vice-presidents for communications and workplace diversity. "Rarely do I see a

black man or woman with profit-and-loss responsibility," says Norman Hatter Jr., a black human-resources director for Du Pont's engineering staff. "That's where we really need to be."

Intellectuals such as Steele see an even deeper problem. In a collection of provocative essays on black-white relations, Steele writes: "One of the most troubling effects of racial preferences for blacks is a kind of demoralization, an enlargement of self-doubt." Even when blacks get a promotion, says University of Pennsylvania sociologist Elijah Anderson, they "run the risk of being seen as tokens. And that's a very difficult thing to handle."

The kind of hiring by the numbers that bothers Steele is just what angers many whites. Their anger doesn't seem to be based on personal experience, since, according to one recent poll, fewer than 1 in 10 whites say they have been victims of reverse discrimination. Still, when companies hire or promote blacks who are considered unqualified by their colleagues, it creates bitterness. "I question the factoring of affirmative action into hiring," says David J. Pandolfi, a white AT&T technician in Springfield, Mass. "It handicaps a company's future growth if an employer has to hire an unqualified individual in order to appease a politician."

Of course, "there are a lot of dumb white people who get breaks, and nobody seems too upset about that," notes William T. Coleman Jr., who as Transportation Secretary was the highest-ranking black in the Ford Administration. Still, Pandolfi expresses the feelings of millions of workers. It is understandable given affirmative action's legacy of racial tension, tokenism, and purely mechanistic compliance.

No question, the cost is high. But is affirmative action worth it? Yes. It's an important symbol of America's commitment to civil rights. More than that, it's an effective club. A deep vein of prejudice still runs through U. S. society, despite all the upbeat talk about the increasingly diversified work force. Government-mandated hiring preferences prod companies into integrating their work force, and in the past 25 years of affirmative action, blacks and other minorities have benefited socially and economically. Individual businesses and the economy have profited, not lost. Until America comes up with a better idea, it's wise to stick with a policy that, despite its flaws, is both a moral imperative and an economic necessity.

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