Mandated Diversity Reporting and Perverse Incentives
How adding organizational hoops probably won't help anyone
It’s been a while since my last post. I’m afraid I was occupied earning a living. The thought of my tender children anxiously worrying about their next meal simply overcame me. Although, since my youngest is 17 and is perfectly capable of ordering Uber Eats on his own, I’ll acknowledge I wasn’t all that overcome.
“Earning a living” in this case, meant finishing up a video course for Pluralsight on “image segmentation using deep learning models” and responding to my publisher’s copy editor’s notes to my “The Complete Obsolete Guide to Generative AI” book.
Thanks for asking.
But bureaucrats and apparatchiks at various levels certainly haven’t been sitting idle. They’re all pushing back heroically against all ills, modern and ancient. As we’ll see though, they don’t seem to be making a lot of progress.
Consider the Canadian Securities Administrators (CSA) corporate diversity reporting rule.
Wait: there’s a legally binding corporate diversity reporting rule in Canada? Also, wait: the “Canadian Securities Administrators” is a real thing?
To answer both questions: not really.
The CSA does exist and it’s there to facilitate collaboration and information sharing among its members (Canada’s provincial and territorial securities regulators). But it's the individual regulators who have the legal authority to take enforcement action. So, breathless public claims to the contrary, the corporate diversity reporting “rule” actually appears to be nothing more than a suggestion.
Nevertheless, it’s a suggestion that carries risk. Checkbox-compliance requirements often distract company officers from their primary fiduciary and legal responsibilities. And there’s evidence that adding yet another file-and-forget process to the organizational workload won’t end up helping the intended populations anyway.
In fact, none of the diversity-is-our-strength efforts have led to consistent success in Canada’s employment market. As Statistics Canada data shows us, improvements in average annual incomes for visible minorities vs non minorities in Canada have been ambiguous.
As you can see below, the average individual belonging to a visible minority earned nearly 19% less than the average non minority in 2006. But by 2021, the disparity had dropped by only a couple of points.
You’d think that years of failure would inspire fresh and original thinking, not Olympic-scale doubling down.
I guess, for now at least, we can (sadly) forget about population-level progress. But perhaps even highly-touted individual successes are an illusion. As an example, take MediaCorp Canada’s Canada’s Best Diversity Employers list published annually through platforms like the Globe and Mail. Alongside MediaCorp’s other lists - like Top Employers and Family Friendly Employers - the Best Diversity list has, since 2008, been identifying Canadian employers whose policies and practices meet the highest employment diversity standards.
Or has it?
Which employers are considered for the competition? As it turns out, you need to submit a complicated 15-page application form and pay a $1,695 fee before they’ll even consider your organization. So the 48 winners of the 2024 competition might, for all we know, have been chosen from a pool of 49 self-selecting entrants. (Although to be fair, since a single application will qualify you for all of MediaCorp’s competitions - and since there were 100 winners of 2024’s Best Employer competition - there would have to have been at least 100 entrants.)
I’m not suggesting there’s anything improper with MediaCorp’s lists, but they’re clearly far more about paid marketing opportunities than reliably tracking social progress. I’m decidedly less impressed with the Globe and Mail’s editorial choices.
I believe that you are reading the Statistics Canada table incorrectly, though the way the table is presented is not helpful. You quote the number $50,280 for the year 2021. That number comes from a row titled "Total - Visible minority". The punctuation mark looks like a dash, but I think it might be a minus sign. I do not understand what it means in either case, but I don't think it's the average for all visible minorities.
However, the row below it is titled "Total visible minority population", and it contains the number $43,920. That seems to be the row containing the average you want. The bottom row, "Not a visible minority", contains $52,550. The ratio of those two numbers is 83.6%. I consider that a plausible estimate of how little visible minorities are earning, while 95.6% (the number you cite) seems too high an estimate.
Using those two rows, the ratios for 2006 through 2021 are 81.4%, 86.9%, 81.2%, and 83.6%. On the one hand, this looks like 2.2% progress from 2006 to 2021; on the other hand, the numbers go up and down so much that I suspect we're looking at noise rather than signal.
I find it peculiar that there are no categories in the table for indigenous minorities. I was able to find the questions for the 2021 census online at https://www.statcan.gc.ca/en/statistical-programs/instrument/3901_Q2_V6. There is a list of categories such as "White" and "Chinese" as question 25, while indigenous categories are handled separately as questions 26 through 29. This may have made sense as a strategy for gathering data, but it resulted in some unacceptable gaps in the way data was summarized.
Nothing I write should be taken as disagreeing with your main point, that people in visible minorities are not being paid as much as people who are not in those minorities. However, the data available don't make it straightforward to see how much progress we're making in alleviating that situation.
Like so much of what passes for regulation, large corporations whose inherent bureaucracies can more easily navigate, let alone cheerlead, such intrusions, "encourage" the state to inflict the same on existing and more importantly, potentially competitive firms thus protecting themselves while advancing their cultural Marxist P.R. bona fides.