Race for Profit uncovers how exploitative real estate practices continued well after housing discrimination was banned. The same racist structures and individuals remained intact after redlining’s end, and close relationships between regulators and the industry created incentives to ignore improprieties. Meanwhile, new policies meant to encourage low-income homeownership created new methods to exploit Black homeowners. The federal government guaranteed urban mortgages in an attempt to overcome resistance to lending to Black buyers – as if unprofitability, rather than racism, was the cause of housing segregation. Bankers, investors, and real estate agents took advantage of the perverse incentives, targeting the Black women most likely to fail to keep up their home payments and slip into foreclosure, multiplying their profits. As a result, by the end of the 1970s, the nation’s first programs to encourage Black homeownership ended with tens of thousands of foreclosures in Black communities across the country. The push to uplift Black homeownership had descended into a goldmine for realtors and mortgage lenders, and a ready-made cudgel for the champions of deregulation to wield against government intervention of any kind.
Narrating the story of a sea-change in housing policy and its dire impact on African Americans, Race for Profit reveals how the urban core was transformed into a new frontier of cynical extraction.
Organizations are not race neutral. Scholars, managers, journalists, and many others routinely recognize “black capitalism,” “black banks,” and “ethnic restaurants,” yet we think of banks that are run by and serve whites simply as “banks” and white corporations simply as “businesses.”
This way of thinking reinforces the fallacy that only people of color have race, and obscures the broad, everyday dynamics of white racial power within organizations. Hiring for elusive notions of “fit,” locating operations in largely white communities, mandating dress and grooming rules rooted in European beauty standards, and expecting non-white employees to code-switch can all subtly disadvantage non-white employees. By leaving white organizations racially unmarked, it becomes difficult to explain why several decades of antidiscrimination and diversity policies ostensibly aimed at equalizing opportunity have done little to alter the overall distribution of organizational power and resources. Such organizational policies, while sometimes helpful in increasing minority representation, fail to address the racial hierarchies historically built into American organizations. Rather than asking how to bring diversity into the workplace, a better question is why so much power and organizational authority remain in white hands.
I argue that the idea of the race-neutral organization has done a great disservice to our understanding of race relations in the workplace, allowing scholars and practitioners to see racial exclusion as unfortunate aberrations or slight deviations from otherwise color-blind ideals. In reality (and even though we typically do not say this out loud), many mainstream American organizations have profited from and reinforced white dominance. Many still do. Understanding this context is vital to seeing organizations for what they really are: not meritocracies, but long-standing social structures built and managed to prioritize whiteness. Only then can leaders begin thinking differently about race — not as a temporary problem to solve or a box to check, but as a fundamental part of what it means to be a company in America. Only then can they have a better understanding of why their diversity efforts do so little to attract, retain, and promote people of color — and what they need to do to change that.
JUST HOW WHITE ARE ORGANIZATIONS?
The simplest way to think about organizational whiteness is through statistics. For example, black representation at the top of organizational hierarchies, as measured through CEOs in Fortune 500 companies, has decreased from six CEOs in 2012 to three today. Steady declines in minority representation at the helm of these businesses since their peak in the early and mid-2000s have led some scholars to claim that the “heyday” of dedicated diversity efforts has ended. University presidents remain mostly white (and male) despite rapidly diversifying student demographics, and academic hierarchies remain deeply stratified by race, with black men and women, respectively, making up just 2% of full-time professors above the rank of assistant. Black gains among public-sector employees — the economic sector responsible for much of the growth of the black middle class following the reforms of the civil rights era — have begun to disappear since the adoption of private-sector policies that have increased managerial discretion and loosened worker protections. A recent meta-analysis of field experiments — the gold standard for detecting discrimination, because other potentially explanatory factors are accounted for — shows that high levels of hiring discrimination against black men have remained relatively constant since the late 1980s, and discrimination against Latinos has decreased little. And despite some progress diversifying within individual firms, between-firm segregation has increased over the past 40 years and Fortune 500 boards remain 83.9% white.
The Big Idea
But our thinking must go beyond the numbers; it’s the reasons why these numbers persist that matter. Even though discrimination has been officially outlawed and most organizations would never say they’re racist, exclusion is visible in many organizational processes. These range from “race-neutral” grooming codes that coincidentally target black hairstyles to the white normativity built into seemingly nonracial organizational expectations. For example, many elite jobs use nebulous notions of “fit” or collegiality and end up hiring new employees with similar backgrounds to the existing white workforce. That’s because this seemingly race-neutral selection criteria can make whiteness a kind of unstated credential, particularly in light of historical processes of segregation and discrimination that have helped create racially homogenous workplaces. Discrimination is also built into the routine ways organizations do business. White corporations may undermine antidiscrimination law as courts see the presence of diversity policy as a good-faith effort (regardless of that policy’s effectiveness). Predominantly white corporations like Airbnb may fuel gentrification by reducing access to affordable housing, and white banks may syphon resources from black communities through discriminatory mortgage lending that redistributes black wealth to white banks.