Represent!
Growing up there was no one like me. The year I was born, every single Fortune 500 CEO was a straight white man. As the 80s began a decade later, not only were there no female CEOs, but there were no female executives in any role at a F100 company. No one whose simple existence proved that my hard work could pay off. Nearly 50 years have passed, and I’ve become a mom, a scientist, and an entrepreneur. Yet, in some ways very little has changed. More than 90% of F500 CEOs are still straight white males1. There is not a single person like me in the C-suite or on the board of a Fortune 500 company, not in Congress, or in virtually any other leadership position in America. For any kid growing up “different” in this country–gay, Black, female, or, like me, transgender–this unspoken message is pervasive and unavoidable: “Don’t bother.”
The irony is that most of those same major companies desperately want to improve their diversity2. While some may only see it only as “corporate responsibility”, quickly pivoting their position to the social winds, the vast majority with whom I’ve done business believe in the large and powerful body of research on the bottom-line value of inclusive economies: boards with more women return greater shareholder value, hiring bias doubles the likelihood of going out of business, LGBT entrepreneurs create millions of jobs (that’s mine!), and so much more. These companies have invested heavily in improving recruiting from under-represented groups, particularly at early career positions, and yet their internal numbers barely change. The tech industry, in particular, has taken a lead in publishing the demographics of their workforce but have precious little to show for their efforts.
The explanation, shouted loudly3, is “pipeline!” “There aren’t enough queer people in STEM. It's not our fault!"
"We couldn’t find a qualified Black fund manager. It's not our fault!"
"This great junior executive left to have a baby. It’s not our fault !”4
The pipeline phenomenon is real, at least on its surface. A number of studies have shown that high-performing students of color drop out of school and women often leave the business world rather than pursue executive positions, despite the fact that both groups report feeling capable and qualified. In fact, a recent study by Raj Chetty and colleagues was highlighted in The Atlantic for showing that the gender wage gap was even worse for Ivy League alumni. “In their early 20s, Ivy League women keep up with men. They graduate with higher GPAs and start at similar salaries. But somewhere between age 26 and 34, their male classmates advance professionally at a pace they don’t match." They suggest that because their husbands earn more, these women are more likely to sacrifice their careers. And another study shows that “women are less likely to apply for executive roles if they’ve been rejected before”. (Due in part to lack of federal funding, there is a great dearth of this research on LGBT populations.)
Collectively, these findings seem to point to choice as the culprit: the choice to not study STEM fields; the choice to drop out of college; the choice to leave the executive track. So, corporate America has tackled this like any other choice problem: marketing. They attack their pipeline problems with campaigns to educate young people about “better” career choices. If only 5-year-old girls understood the value of an engineering degree they’d choose to study STEM. If only Black kids chose to get a good education all of these problems would disappear.
It is true that high-performing students from underrepresented populations turn down the opportunity to attend elite universities at vastly higher rates than their majority peers. Decades of armchair research comparing these students to traditional university attendees have produced suggestions,“Black families are different. These students' choices are cultural.” Or perhaps, “The economics are different for Latine families. Those kids choose to stay home to help.” In any case, they are making bad choices—cue the marketing campaign.
If you talk to these exceptional students they tell a different story. They know they can pass the classes. They know they can be successful, but still “choose” their local state schools, community college, or no university at all at disturbingly high rates. So why do so many turn down scholarships or never apply in the first place?
In 2012,a pair of economists asked a different question: some of these kids apply and take those scholarships and some never apply at all—what’s different between them? It turns out, very little. Their neighborhoods and families, culture and economics, don’t distinguish them. Instead, the biggest predictor, by far, is knowing someone from the neighborhood that’s gone before you. Though honors programs also help, it is largely about the unambiguous evidence that your hard work at university, instead of in your own home, might actually pay off.
I will admit my own bias when I originally read this paper. The authors talked about “high-achieving” and “low-income” students, but I read it as Black and brown kids without much self-reflection. Then I realized that this was my dad.
He grew up on a farm in Nowhere, Kansas5. My grandfather was a sharecropper, working someone else’s land to put food on the table. Rural America in that era was a completely different world than the coastal California that was my home, but my father and his two brothers were exceptional. In 1958, my father graduated high school as the top student in the state of Kansas, earning a 5-year scholarship to MIT. He declined. For someone raised in a remote farming town, this was his opportunity to transform his life, a ticket to a bigger world. Since he felt entirely capable of being successful at MIT, for most of my life his decision seemed wildly irrational. Passing on a full scholarship to MIT would be irrational for me, but to my father and his parents, what would be the point of spending five years at one of the world's most prestigious universities if you are just going to end up back on the farm?
This slow attrition of top talent produces that supposed “pipeline problem”, our favorite excuse for the striking lack of diversity across broad swaths of corporate, political, and academic leadership. If their decisions to drop out are irrational, then the pipeline problem is their fault, or, at the very least, a simple matter of perception with an equally simple marketing solution (if only we can figure out the right messaging). However, over the last few years, my research has begun to tell a different story entirely. My father and millions of others are making entirely rational decisions. They are maximizing their expected returns, but their decisions reflect a cost almost entirely absent from their more privileged peers. As the Brookings Institute study cited above shows, poor students immersed in high-inequality communities believe that their hard work won’t pay off. As it turns out, they are right.
I’ve approached the mythology of “choice” in my own research, drawing from my work in other fields like theoretical neuroscience and educational technology. Applying machine learning and big data to analyze workplace bias revealed what I call the Tax on Being Different, the quantifiable cost of not being a straight white male in the workplace. It is paid in the form of additional degrees, longer work histories, more prestigious schools, and generally having to over-prove yourself. I found that being gay in the UK costs $70,000 on average more than being straight, largely in longer work tenures. Being a lesbian in the East Asian tech industry comes with a bill approaching $1.2 million in additional education and time (intersectionality is a bitch). The Tax can be averaged across a whole industry or it can be computed down to specific cases, such as “What’s The Tax on being Black and gay at ExxonMobil in Houston?” Most meaningful though, it is a pervasive disincentive to anyone who’s different, an implicit message that your hard work won’t pay off.
Take the gender wage gap: the difference in salary between men and women doing the same jobs. Over the last 10 years I’ve read hundreds of economics papers about wage gap—it seems to be a bit of a rite of passage for labor economists. All of the authors, progressive to libertarian, seem to present the same finding: women choose to work less and this accounts for the wage gap. Women choose not to put in that extra hour after work or finishing up a report over the weekend. They don’t lean in to leadership opportunities and, in the end, choose family over career.
The actual evidence in terms of hours worked seems to tell an irrefutable story6, but it never explains why women make such seemingly irrational economic choices. I’ve never found, “Women have different preferences than men,” to be a satisfying answer. Are women aliens? If we instead make the absurdly radical assumption that women are making rational decisions, why are they choosing worse career outcomes?
Also, if wage gap was purely a function of individual choices, why do individual company’s vary so widely in wage gaps? They should all have largely similar gaps. Inspired by the research on high-achieving students, I built a little army of bots to crawl across the data and websites of nearly 60,000 companies represented in the database of Gild Inc, an AI-driven recruiting company where I was the Chief Scientist at the time. My little AI-driven bots collected data from social networks, company “About” pages, and earning reports.
Company policies were only weakly related to wage gap. Poor policies were a bad sign, but most companies have checked the basic boxes on diversity policies. Of the dozens of variables I collected, one stood out as the biggest single correlation: the number of female faces on the leadership team. Among the bots collecting company information was a bit of machine learning that counted the number of female faces. The more women on the board and C-Suite, the more wage gap dropped. Even spending on diversity recruiting and promotion initiatives was trivial compared to representation at the top. In fact, in the subsequent year after a woman joined the leadership team, particularly CEO or CFO, wage gap dropped regardless of policy change.
Why? Imagine you’ve worked hard your entire life. First, you excelled in school and earned admission to a top university. Then, you worked even harder to prove yourself and secure a dream job. Still you work, twice as hard as the guy next to you…and then you look up to find that there is no one like you in the leadership of the company. You don’t quit or even work less hard, but that extra hour you might have invested in your career Tuesday night could be invested in church, family, volunteering, art, and any other place where your efforts might earn the same return as everyone else. Women don’t earn less because they work less; they invest more of their hard work outside their career because their career will pay them less. Even a subtle shift in weekly hours accounts for the differences we see. There is a little economics homunculus7 in women’s parietal lobes accurately predicting poor returns on those late nights at the office.
This finding makes a simple prediction: if you make women’s other options pay off more (e.g., improved family leave benefits) without making work pay off fairly, then women will work less rather than more, contrary to the intention of the policy. This is exactly what was found in an analysis of improved parental leave mandates in the state of California: women work fewer total hours. If we want to reduce wage gap then women need evidence that all of that hard work will pay off.
That evidence is still in short supply today. A recent paper used a similar technique to my own to analyze images of business leaders. They found that “nearly 80% of the corporate executives in the study were white, with 3.6% Black and 16.7% Asian.” Even Black-majority South Africa still had largely white boards. In a world where arbitrary decisions about colonial boundaries hundreds of years ago still govern people's life outcomes, choice itself is fundamentally inequitably distributed.
Choices aren’t only about participating or not. The range of options include code switching, being one of the guys, leaning in, staying in the closet, going stealth… so many choices to be someone other than you. For most of my life the “choice” of gender transition meant sacrificing everything–not just career, family, and friends, but every impact I had ever hoped to have on the world. How selfish to choose happy over good. Yet every good thing I’ve accomplished in my life, as a scientist, inventor, entrepreneur, and a parent, has come as a woman proudly open about my transition. How many amazing lives have never been lived because the tax imposed a different choice?
Diversity programs that focus only on entry-level hiring cannot solve this problem, but there is a surprisingly simple message that can have a huge impact: a picture of the company’s leadership team. This may be the most powerful story your company will ever tell a potential future leader. I found that company-by-company as the percentage of straight white men in the Boardroom and C-Suite increases, so does the Tax, the pay gap, and the pipeline problems. Even companies with large (and expensive) Diversity & Inclusion programs but limited evidence of diversity at the top (e.g., Walmart) still impose a larger Tax than similar companies with significant leadership diversity (e.g., P&G). Those Ivy League women that appear to choose family over the executive ranks are significantly more likely to stay at companies with greater diversity in senior leadership. Would straight white men choose any differently if they saw no one like them at the top? The evidence is in every West Virginia mining town and Kansas farm. “Different” is more than skin deep.
Real inclusion is more than a photo-op, but why would anyone commit years of their life to working twice as hard with no evidence that it will ever pay off? Companies must stop waiting passively at one end of a pipeline for the world to solve their problem. Leadership comes from the top.
I’ve founded a few companies and served on several boards, all since transitioning. That simple fact tells every little kid who feels different that their hard work truly can pay off. I’m proud to be a transwoman in a position of leadership, and even more so that I’m not the only one. I’m particularly proud to have been elected this year the Chair of StartOut, the nonprofit dedicated to increasing the number, diversity and impact of LGBT entrepreneurs. With our research and advocacy, StartOut is helping a whole new generation of leaders to realize their full potential. There was no one like me growing up, but for kids today that will never be true again.
See also: The Advocate.