Why Diversity Programs Fail

Diversity training doesn’t work. At least that’s one takeaway from the write-up in The Washington Post on new research published in Harvard Business Review:

In the cover story of the latest issue of the Harvard Business Review, sociologists from Harvard University and Tel Aviv University explore the counterintuitive idea that some of the most common tools for improving diversity — one of which is mandatory training — are not just ineffective. They could be detrimental to improving the number of women and minorities in the managerial ranks.

Making people attend diversity training may seem to make sense, said one of the study’s co-authors, Alexandra Kalev, in an interview: “But it doesn’t work. For decades, diversity management programs flourished with no evidence whatsoever about their effects and their success.” 

The article is based on a series of research papers by Kalev and Harvard’s Frank Dobbin that studied nearly 830 U.S. companies. It describes how, five years after implementing compulsory diversity training for managers, companies actually saw declines in the numbers of some demographic groups — African American women and Asian American men and women — and no improvement among white women and other minorities.

Some of the findings have implications even outside of the workplace:

The authors point to a range of past social science studies that have shown that efforts to reduce prejudice can backfire — actually increasing bias or leading to more hostility rather than less. In another past study, white subjects who felt forced to agree with a document about bias toward blacks felt more prejudice; those who felt they could choose felt less. The pair also say that when diversity training is just focused on a certain group — like managers or one where there’s been a bias problem — it can also have worse results…The researchers also found that other tactics often aimed at helping with diversity, such as skill tests to help prevent bias in the hiring process or grievance systems where employees can log complaints, also led to declines in the number of women and minorities in the companies’ workforces over time. Managers don’t like being told who they want to hire, so they often distribute tests selectively, Kalev said, while grievance systems can make managers feel threatened and retaliate.

Is there any hope? Yes:

Kalev said their research has shown that training programs that focus on multiculturalism and the business case for diversity — rather than the legalistic reasons behind why it’s being offered — have a less negative impact. Still, she says, “even the most fascinating diversity training will be way more efficient if the crowd is sitting there voluntarily.” 

Indeed, that’s one of the tactics their research found actually lead to more diversity among managers. Voluntary programs that let people choose whether to attend might seem futile — most people don’t think they’re biased, so might not attend — but engagement, rather than coercion, led to growth among several minority groups in Kalev’s research. Diversity managers told she and Dobbin that 80 percent of people typically do attend, even when programs are voluntary. And strong representation from leaders can be one way to help encourage people to show up.

Food-for-thought.

 

The Economic History of American Inequality

An intriguing article by economists Peter Lindert and Jeffrey Williamson (based on their new book) traces the history of American income inequality. While some suggest that inequality is driven by a “fundamental law of capitalist development,” it turns out that “episodic shifts in five basic forces” to to blame: “demography, education policy, trade competition, financial regulation policy, and labour-saving technological change.” The following took me by surprise:

Colonial America was the most income-egalitarian rich place on the planet. Among all Americans – slaves included – the richest 1% got only 8.5% of total income in 1774. Among free Americans, the top 1% got only 7.6%. Today, the top 1% in the US gets more than 20% of total income. Colonial America looks even more egalitarian when the comparison is by region – in New England the income Gini co-efficient was 0.37, the Middle Atlantic was 0.38, and the free South 0.34. Today the US income Gini is more than 0.5, before taxes and transfers. Colonial America was also far less unequal than Western Europe. England and Wales in 1759 had an income Gini of 0.52,and in 1802 it was 0.59. Holland in 1732 had an income Gini of 0.61, and the Netherlands in 1909 had 0.56.  Also, if you agree with neo-institutionalists that economic equality fosters political equality, which fosters pro-growth policies and institutions, then America’s huge middle class is certainly consistent with the young republic’s pro-growth Hamiltonian stance from 1790 onwards. That is, the middle 40% of the distribution got fully 52.5% of total income in New England, the cradle of the revolution!

However, inequality began to rise between 1800 and 1860, “matching the widening income gaps we have witnessed since the 1970s. The earlier rise was not dominated by a surge in the property income share, as argued by Piketty (2014). Rather, this first great rise in inequality was broadly based, with widening income gaps throughout the whole income spectrum – rising urban-rural income gaps, skill premiums, gaps between slaves and the free, North-South income gaps, earnings inequality, and even property income inequality.”

Yet,

the income share captured by the richest 1% fell dramatically between the 1910s and the 1970s, and the share of the bottom half rose, for almost all countries supplying the necessary data. This ‘Great Levelling’ took place for several reasons. Wars and other macro-shocks destroyed private wealth (especially financial wealth) and shifted the political balance toward the left.  The labour force grew more slowly and automation was less rapid, improving the incomes of the less skilled. Rising trade barriers lowered the import of labour-intensive products and the export of skill-intensive products, favouring the less skilled in the lower and middle ranks. And in the US, the financial crash of 1929-1933 was followed by a half century of tight financial regulation, which held down the incomes of those employed in the financial sector and the net returns reaped by rich investors.

The authors note that “policies regarding education, financial regulation, and inheritance taxation…offer ways to check the rise of inequality while also promoting growth.” It is worth pointing out that this is about inequality and not about the absolute economic betterment of the average American. Nonetheless, understanding this economic history is important for those on both the right and the left.

Natural Gas: The Bridge to Renewable Energy

Most people are in favor of renewable energy such as wind and solar, yet many supporters tend to look at natural gas with disdain.[ref]Arguably due to the means of its extraction (fracking). For example, there’s been some controversy over the EPA’s fracking report. Nonetheless, the shale gas boom has been linked to America’s falling carbon emissions (though it is likely not the only or even biggest contributor).[/ref] However, a new NBER study finds that this position is untenable. As one of the authors writes in The Washington Post,

Because of the particular nature of clean energy sources like solar and wind, you can’t simply add them to the grid in large volumes and think that’s the end of the story. Rather, because these sources of electricity generation are “intermittent” — solar fluctuates with weather and the daily cycle, wind fluctuates with the wind — there has to be some means of continuing to provide electricity even when they go dark. And the more renewables you have, the bigger this problem can be.

Now, a new study suggests that at least so far, solving that problem has ironically involved more fossil fuels — and more particularly, installing a large number of fast-ramping natural gas plants, which can fill in quickly whenever renewable generation slips.

Er…Solar!

…In the study, the researchers took a broad look at the erection of wind, solar, and other renewable energy plants (not including large hydropower or biomass projects) across 26 countries that are members of an international council known as the Organisation for Economic Co-operation and Development over the period between the year 1990 and 2013. And they found a surprisingly tight relationship between renewables on the one hand, and gas on the other.

…“Our paper calls attention to the fact that renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply,” the paper adds.

Image result for earth captain planet gif
…which is where the natural gas is found.

The study seems to indicate that natural gas is “a so-called “bridge fuel” that allows for a transition into a world of more renewables, as it is both flexible and also contributes less carbon dioxide emissions than does coal, per unit of energy generated by burning the fuel.” Or, as Reason‘s science writer Ronald Bailey puts it, “Anti-fracking pro-renewable energy activists are walking contradictions.”

 

What Do Economists Think About a Basic Income?

In April, I wrote about a new 10-year experiment testing a universal basic income in Kenya. While I find arguments for UBI compelling (especially those made by Matt Zwolinski), it is worth looking what experts are saying about it. Charles Murray has argued that for the UBI to work, it must replace all other transfer systems and bureaucracies. But economists are not so sure.

Granted, this is mainly a response to Murray’s particular brand of UBI. But are there other reasons to be skeptical of UBI? Let’s consider the costs. The Economist reports,

An economy as rich as America’s could afford to pay citizens a basic income worth about $10,000 a year if it began collecting about as much tax as a share of GDP as Germany (35%, as opposed to the current 26%) and replaced all other welfare programmes (including Social Security, or pensions, but not including health care) with the basic-income payment.

Such a big jump in the size of the state should make anyone wary. Even if levied efficiently, on an immovable asset like land, tax rises on this scale would have unpredictable effects on growth and wealth creation. Yet an income of $10,000 is still extremely low: it would leave many poorer people, such as those who rely on the state pension, worse off than they are now—at the same time as billionaires started getting more money from the state.

A universal basic income would also destroy the conditionality on which modern welfare states are built. During an experiment with a basic-income-like programme in Manitoba, Canada, most people continued to work. But over time, the stigma against leaving the workforce would surely erode: large segments of society could drift into an alienated idleness. Tensions between those who continue to work and pay taxes and those opting out weaken the current system; under a basic income, they could rip the welfare state apart.

Lastly, a basic income would make it almost impossible for countries to have open borders. The right to an income would encourage rich-world governments either to shut the doors to immigrants, or to create second-class citizenries without access to state support.

The Brookings Institution’s Isabel Sawhill lists two major objections to a UBI:

  1. Robert Greenstein argues…that a UBI would actually hurt the poor by reallocating support up the income scale. His logic is inescapable: either we have to spend additional trillions providing income grants to all Americans or we have to limit assistance to those who need it most.”
  2. “Liberals have been less willing to openly acknowledge that a little paternalism in social policy may not be such a bad thing. In fact, progressives and libertarians alike are loath to admit that many of the poor and jobless are lacking more than just cash. They may be addicted to drugs or alcohol, suffer from mental health issues, have criminal records, or have difficulty functioning in a complex society. Money may be needed but money by itself does not cure such ills.”

She instead suggests the possibility of “unconditional payments along the lines of a UBI, but to phase it out as income rises.” But more fundamentally, she notes that “the biggest problem with a universal basic income may not be its costs or its distributive implications, but the flawed assumption that money cures all ills.”

As we wrestle over the best policy to assist the poor and needy, we must be willing to look at it from all angles.

 

Age & Rising Nationalism

World Bank economist Harun Onder has a post over at the Brookings Institution on his brand new study on rising nationalism and older generations:

Much ink has been spilled against such premises of rising nationalism. But a curious observation remains to be explained: Why do nationalist arguments tend to resonate with old people? Take the recent case of Brexit. Only a quarter of youth (ages 18-24) voted for the “leave” camp. In comparison, six out of ten old people (ages 65+) wanted to leave. The youth were quick to announce the stark contrast in social media and clarify their position! So, what is it that the old know about globalization that the young fail to see?

In a recent study, my colleagues Richard Chisik and Dhimitri Qirjo and I tried to explain how demographic aging—an increase in the share of old people in the country—could shift the economic policy preferences in an economy. Because nationalist sentiments often involve objections to free trade and migration, we paid particular attention to those policies. We came up with three interesting results that may help us understand how aging and nationalism are linked.

These results include:

  1. An aging population is more dependent on imports: “To see this, note that the old consume more services like long-term care and the young consume more goods like smartphones. Therefore, the higher the share of old people in the population, the higher the demand for services, which cannot be imported, and the lower the demand for goods that can be imported.”
  2. When aging occurs, more firms move overseas if trade barriers are low: “If…the aging country imposes egregiously high tariffs on imports, smartphone producers might rethink their relocation decisions.”
  3. Nationalists may have a point about free trade at first glance, but more in-depth analysis proves otherwise: “From the nationalist point of view, erecting barriers at the border, be it made of concrete or import tariffs, may appear to make sense economically. However, this logic is terribly shortsighted: It is based on a static view of a world where actions cause no reactions. More specifically, it fails to recognize that when one country erects barriers its partners will do the same in response. In the end, a trade war may be triggered, only to be accompanied by a rising wave of protectionism, which would hurt the aging country more than the partner.”

Check it out.

“Marriage Brings Adjustments”

This is part of the General Conference Odyssey.

A couple years ago, I highlighted President Henry B. Eyring presentation at The Complementarity of Man and Woman: An International Interreligious Colloquium at Vatican City. Julie Smith at Times & Seasons had an excellent insight about the following quote from President Eyring:

[My wife’s] capacity to nurture others grew in me as we became one. My capacity to plan, direct, and lead in our family grew in her as we became united in marriage. I realize now that we grew together into one—slowly lifting and shaping each other, year by year. As we absorbed strength from each other, it did not diminish our personal gifts.

Smith notes,

What I hear him saying is that men and women come to marriage with a different set of roles/characteristics,  but one goal of marriage is for them to teach each other and to adopt each other’s roles. I sometimes hear in LDS venues a rather opposite idea–one I find theologically problematic inasmuch as it suggests that men and women should maintain separate characteristics, something I find incompatible with both the idea of the perfection of Christ and his ability to serve as an example for all both men and women, as well as the idea of men and women striving to themselves become perfected. His thinking here can be a great bridge from older teachings about gender difference to a newer vision where those differences can still be acknowledged but won’t be seen as limiting. I especially like his idea that, as he took on nurturing and his wife took on leading, it didn’t diminish either of them. (Contra language we sometimes hear bemoaning the loss of femininity and masculinity.)

Smith’s observation reminds me of a point made by Texas A&M professor and fellow Latter-day Saint Valerie M. Hudson regarding the telos (“end,” “purpose,” “goal”) of marriage:

What we [Mormons] understand from our doctrine is that the telos of marriage is to ground every human family in real, lived, embodied gender equality.  And then, as a consequence, all reproduction would occur only within that context of gender equality.  If the ideal were lived, then every son and daughter of God would be born into a family that lived gender equality, and thus each would learn how to form such a relationship when they themselves came of age.  Reproduction is the fruit, not the root, of what God intended in establishing marriage. 

That is why it doesn’t matter who’s fertile, and whether a marriage of infertile people is a marriage is beside the point.  The test of whether you have a marriage or not is whether it is gender-equal monogamy.[ref]For Hudson, companionate heterosexual monogamous marriage is a matter of gender equality and human peace incarnate.[/ref]

I was reminded of this as I read from Elder Henry D. Taylor’s Oct. 1973 talk. In it, he states,

Marriage brings adjustments, because each has his or her own personality. Reared in homes with varying backgrounds, marriage naturally will require the making of adjustments.

Marriage, my beloved young brothers and sisters, should not be just taken for granted. It must be worked at, but realize that you can have the kind of marriage that you earnestly desire and for which you are willing to work. Marriage will require giving and taking; it will mean sharing, because life was meant to be shared. A happy and successful marriage means forgetting oneself and thinking of ways in which to make one’s companion happy. It might be well each day for the husband to think, “What can I do today to make Mary happy?” And Mary should say to herself, “What can I do today to make John happy?” A happy Home is where the wife is treated like a queen and the husband is treated like a king. And so, it is not only marrying the right partner, it is being the right partner.

Later, he says,

President Stephen L Richards, a former counselor in the First Presidency, once aptly remarked: “In the case of marital disagreement, which may lead to separation, the proper remedy is not divorce, but repentancerepentance usually on the part of both husband and wife, repentance for both acts committed and harsh words which have made a ‘hell’ instead of a ‘heaven’ out of the home.”

In order for a married couple to make a “heaven” out of their home, they must realize that repentance, love, faithfulness, humility, and forgiveness are basic essentials in achieving this noble and lofty goal.

A serene home must also be a place where the Spirit of the Lord will dwell and abide. The Spirit of the Lord will not dwell nor abide in a home where there is constant bickering, quarreling, arguing, discord, or disharmony.

Joseph Smith’s famous line about being a “rough stone rolling down [from] a [high] mountain” with “all hell knocking off a corner here and a corner there” is pertinent here. As we adapt, repent, and love within our marriages, we are polished and refined. We take on the positive attributes of the other. This is why the grand fundamental principle of Mormonism is friendship and heaven is made up of people: they make us into the gods we are meant to be.

Check out the other posts from the General Conference Odyssey this week and join our Facebook group to follow along!

Piketty vs. Evidence

Economist Thomas Piketty, author of “Capital in the 21st Century,” says rising inequality requires wealth taxes to redistribute gains. A new study says historical evidence challenges his theory.
Piketty

The Wall Street Journal reported on a new IMF study analyzing Piketty’s hypothesis “that income inequality has risen because returns on capital—such as profits, interest and rent that are more gleanings of the rich than the poor—outpaced economic growth.” IMF economist Carlos Góes

tested the thesis against three decades of data from 19 advanced economies. “I find no empirical evidence that dynamics move in the way Piketty suggests.” In fact, for three-quarters of the countries he studied, inequality actually fell when capital returns accelerated faster than output. Those findings support previous work by Daron Acemoglu of the Massachusetts Institute of Technology and political scientist James Robinson, now of the University of Chicago, suggesting Mr. Piketty’s thesis was far too simplistic for the complexities of real-world economies that are affected by politics and technology. Mr. Góes says his study also provides evidence that Mr. Piketty’s assumption that saving rates remain stable is flawed. Rather, the data shows changes in the savings rate are likely to offset most of the effects of an increase in capital share of national income.

I’ve written about the criticisms of Piketty before. They seem to be piling up.

Good Boss, Bad Boss: Lecture by Robert Sutton

This is part of the DR Book Collection.

Stanford’s Robert Sutton is a favorite of mine among management experts. I’ve been a fan of his work ever since reading his HBR article “More Trouble Than They’re Worth” and the book-length version The No-Asshole Rule. His book Good Boss, Bad Boss: How to Be the Best…and Learn from the Worst is another well-researched, but highly enjoyable read. Sutton offers tremendous advice for those in leadership positions. These include:

  • “Don’t crush the bird”: find the balance between micromanaging and undermanaging.
  • “Grit gets you there”: perseverance toward long-term goals.
  • “Small wins are the path”: break down big challenges and long-term goals into smaller, achievable goals.
  • “Beware the toxic tandem”: be aware of how others perceive you and avoid selfish behavior.
  • “Got their backs”: protect and defend your people.

Sutton highlights this excellent, one-page summary:

You can see a lecture by Sutton below.

 

Raising the Drawbridges

“Is Poland’s government right-wing or left-wing?” asks a recent article in The Economist.

Its leaders revere the Catholic church, vow to protect Poles from terrorism by not accepting any Muslim refugees and fulminate against “gender ideology” (by which they mean the notion that men can become women or marry other men).

Yet the ruling Law and Justice party also rails against banks and foreign-owned businesses, and wants to cut the retirement age despite a rapidly ageing population. It offers budget-busting handouts to parents who have more than one child. These will partly be paid for with a tax on big supermarkets, which it insists will somehow not raise the price of groceries.

This represents a new kind of political divide; one that is “less and less between left and right, and more and more between open and closed. Debates between tax-cutting conservatives and free-spending social democrats have not gone away. But issues that cross traditional party lines have grown more potent. Welcome immigrants or keep them out? Open up to foreign trade or protect domestic industries? Embrace cultural change, or resist it?” As the British head of YouGov noted, the political ideologies are either “drawbridge up” or “drawbridge down.” The American context of all this is particularly depressing:

In America the traditional party of free trade and a strong global role for the armed forces has just nominated as its standard-bearer a man who talks of scrapping trade deals and dishonouring alliances. “Americanism, not globalism, will be our credo,” says Donald Trump. On trade, he is close to his supposed polar opposite, Bernie Sanders, the cranky leftist who narrowly lost the Democratic nomination to Hillary Clinton. And Mrs Clinton, though the most drawbridge-down major-party candidate left standing, has moved towards the Trump/Sanders position on trade by disavowing deals she once supported.

The two main forces driving the “drawbridge up” view “are economic dislocation and demographic change.” In turns out that “many mid- and less-skilled workers in rich countries feel hard-pressed. Among voters who backed Brexit, the share who think life is worse now than 30 years ago was 16 percentage points greater that the share who think it is better; Remainers disagreed by a margin of 46 points. A whopping 69% of Americans think their country is on the wrong track, according to RealClearPolitics; only 23% think it is on the right one.” It’s also true that

Rich countries today are the least fertile societies ever to have existed. In 33 of the 35 OECD nations, too few babies are born to maintain a stable population. As the native-born age, and their numbers shrink, immigrants from poorer places move in to pick strawberries, write software and empty bedpans. Large-scale immigration has brought cultural change that some natives welcome—ethnic food, vibrant city centres—but which others find unsettling. They are especially likely to object if the character of their community changes very rapidly.

This does not make them racist. As Jonathan Haidt points out in the American Interest, a quarterly review, patriots “think their country and its culture are unique and worth preserving”. Some think their country is superior to all others, but most love it for the same reason that people love their spouse: “because she or he is yours”. He argues that immigration tends not to provoke social discord if it is modest in scale, or if immigrants assimilate quickly.

There is an optimistic side to all this:

Although the drawbridge-uppers have all the momentum, time is not on their side. Young voters, who tend to be better educated than their elders, have more open attitudes. A poll in Britain found that 73% of voters aged 18-24 wanted to remain in the EU; only 40% of those over 65 did. Millennials nearly everywhere are more open than their parents on everything from trade and immigration to personal and moral behaviour. Bobby Duffy of Ipsos MORI, a pollster, predicts that their attitudes will live on as they grow older.

As young people flock to cities to find jobs, they are growing up used to heterogeneity. If the Brexit vote were held in ten years’ time the Remainers would easily win. And a candidate like Mr Trump would struggle in, say, 2024.

But in the meantime, the drawbridge-raisers can do great harm. The consensus that trade makes the world richer; the tolerance that lets millions move in search of opportunities; the ideal that people of different hues and faiths can get along—all are under threat. A world of national fortresses will be poorer and gloomier.

Forgiveness, Boundaries, and Reconciliation

This is part of the General Conference Odyssey.

And forgive us our debts, as we forgive our debtors (Matt. 6:12).

And forgive us our sins; for we also forgive every one that is indebted to us (Luke 11:4).

I, the Lord, will forgive whom I will forgive, but of you it is required to forgive all men (D&C 64:10).

Forgiveness is a topic that I think most Mormons struggle with. What does forgiveness actually mean? What does it look like in practice? Is forgiving the same as forgetting? How does one balance boundaries with that concept of forgiveness, especially those who have suffered violence and abuse? Or are boundaries and forgiveness not mutually exclusive?

There has been a fair amount of research on forgiveness. The Greater Good Science Center at the University of California, Berkeley offers this helpful explanation:

Psychologists generally define forgiveness as a conscious, deliberate decision to release feelings of resentment or vengeance toward a person or group who has harmed you, regardless of whether they actually deserve your forgiveness. Just as important as defining what forgiveness is, though, is understanding what forgiveness is not. Experts who study or teach forgiveness make clear that when you forgive, you do not gloss over or deny the seriousness of an offense against you. Forgiveness does not mean forgetting, nor does it mean condoning or excusing offenses. Though forgiveness can help repair a damaged relationship, it doesn’t obligate you to reconcile with the person who harmed you, or release them from legal accountability. Instead, forgiveness brings the forgiver peace of mind and frees him or her from corrosive anger. While there is some debate over whether true forgiveness requires positive feelings toward the offender, experts agree that it at least involves letting go of deeply held negative feelings. In that way, it empowers you to recognize the pain you suffered without letting that pain define you, enabling you to heal and move on with your life.

These findings coincide with Elder Marion D. Hanks’ October 1973 talk: “What is our response when we are offended, misunderstood, unfairly or unkindly treated, or sinned against, made an offender for a word, falsely accused, passed over, hurt by those we love, our offerings rejected? Do we resent, become bitter, hold a grudge? Or do we resolve the problem if we can, forgive, and rid ourselves of the burden? The nature of our response to such situations may well determine the nature and quality of our lives, here and eternally.” Elder Hanks recognizes that forgiveness, at least in part, is about our own well-being. “But not only our eternal salvation depends upon our willingness and capacity to forgive wrongs committed against us,” he says. “Our joy and satisfaction in this life, and our true freedom, depend upon our doing so. When Christ bade us turn the other cheek, walk the second mile, give our cloak to him who takes our coat, was it to be chiefly out of consideration for the bully, the brute, the thief? Or was it to relieve the one aggrieved of the destructive burden that resentment and anger lay upon us?” Hanks concludes, “God help us to rid ourselves of resentment and pettiness and foolish pride; to love, and to forgive, in order that we may be friends with ourselves, with others, and with the Lord.” We should always remember: “Christ gave his life on a cross; and on that cross he fully, freely forgave.”

Reconciliation is the ultimate purpose and intention of forgiveness. This seems to be an unavoidable conclusion. Forgiveness mends relationships and makes them sustainable. But forgiveness is not the same as reconciliation. Relationships are not individualistic, but by definition involve others and their choices. Relationships require trust, boundaries, etc. The violation of boundaries and the erosion of trust may make reconciliation in some instances unlikely. But the release of anger and resentment opens the doorway for relational and personal healing. It can be a fountain of empathy, compassion, and generosity. In short, this “ultimate form of love” can help us align ourselves with the Master we’ve chosen to follow.

Check out the other posts from the General Conference Odyssey this week and join our Facebook group to follow along!