DEI Explained: What It Is And Why It’s Controversial

Diversity, equity, and inclusion (DEI) has emerged as one of the most polarizing issues in America, with very passionate opinions on both sides. President Donald Trump, now in office again, has made the elimination of DEI programs a high priority. In his speech to Congress, he announced that his administration had abolished DEI policies "throughout the entire federal government and, indeed, the private sector and our military." Within weeks of assuming office, he signed executive orders to reverse these programs, coercing federal contractors to discontinue what he termed "illegal DEI discrimination" and ordering agencies to probe companies with DEI programs.

What Is DEI?

DEI is an acronym for diversity, equity, and inclusion. Essentially, it is policies and initiatives that are introduced within organizations to curb discrimination, adhere to civil rights laws, and foster inclusive workplaces. They claim that DEI measures assist organizations in hiring and retaining the best people, improving innovation, and enhancing bottom-line results. Massachusetts Governor Maura Healey, a Democrat and former civil rights attorney, recently explained to The New York Times that CEOs of Fortune 500 companies are convinced diversity makes their bottom line stronger.

Critics, though, view DEI as a framework that elevates race and gender over personal merit and charge that it creates "reverse discrimination" against white males. Others have further suggested that DEI efforts are part of an effort to break down historic American values. Mike Gonzalez, a senior fellow at the right-wing Heritage Foundation, has suggested that DEI is not truly about diversity but rather about remaking society fundamentally.

The DEI Backlash

The pushback against DEI accelerated after the killing of George Floyd in 2020, which prompted a wave of corporate and government diversity initiatives. Companies pledged to boost representation and eliminate bias from recruitment and promotion processes. Conservative activists, think tanks, and legal organizations, however, quickly organized against DEI, portraying it as an ideological campaign that erodes merit-based systems.

In 2023, the Supreme Court invalidated race-conscious admissions to colleges, a ruling that emboldened groups like America First Legal, founded by Trump advisor Stephen Miller. These groups have since attacked DEI policies within large corporations on the grounds that women and minority hiring quotas are illegal racial quotas.

The Trump administration has amplified this battle by ordering federal agencies to review DEI policies in the government and private sectors. The Justice Department and the Equal Employment Opportunity Commission (EEOC) have new guidelines that specify what constitutes "unlawful DEI-related discrimination." Race- or gender-based hiring practices, mentorship programs for certain demographic groups, and diversity training at the corporation level that separates employees by race or gender all qualify.

The Corporate Response

Following increasing political and legal pressure, several companies have started to roll back their DEI initiatives. Meta, the parent organisation of Facebook and Instagram, has scrapped some of its DEI initiatives, while others, such as ExxonMobil and McKinsey, have rephrased their language to talk more about "meritocracy" instead. McKinsey's worldwide managing partner, Bob Sternfels, explained to employees that the company does not promise equal results but wants to make sure everyone gets an equal opportunity to succeed on the merits.

The word "meritocracy" is gaining ground in corporate America, especially among executives who fear legal action. Scale AI founder Alexandr Wang presented the idea of "MEI" (merit, excellence, and intelligence) that businesses should only care about bringing in "the best person for the job." Trump followed suit by advocating for a "colorblind and merit-based" society.

Yet critics of the anti-DEI movement argue that true meritocracy is only possible when systemic barriers are addressed. David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at NYU School of Law, contends that DEI programs help create a level playing field by expanding the talent pool and ensuring that hiring and promotion decisions are truly based on ability, not unconscious bias or structural disadvantages.

The Effect on Workplace Diversity

The backlash against DEI has already had tangible impacts on workplace diversity. During the period from 2020 to 2022, Black executives in S&P 100 firms grew by almost 27%, based on workforce data that the federal government has been collecting. The backlash against DEI has, however, slowed the momentum. During 2023, the percentage of Black executives fell by 3%, a rate twice as fast as among white executives.

In spite of these reversals, civil rights activists caution that repealing DEI would undo gains won hard. Reverend Adam Russell Taylor, head of the Christian advocacy organization Sojourners, has contended that doing away with DEI would lead to re-creating the kind of workplaces where bias and discrimination are not challenged. According to him, denying DEI efforts reinforces the notion that white men are chiefly linked with leadership and competence, a notion which is contrary to America's foundational values of equality and opportunity.

Is DEI Dying?

Although the term "DEI" has been politicized by detractors, much of its underlying tenets continue unabated under other nomenclature. Firms are quietly dropping overt DEI terminology from their public disclosures in favor of terms such as "inclusion" and "belonging." For instance, BlackRock, the global leader in asset management, recently combined its DEI and talent management personnel into a single "Talent and Culture" unit.

Some DEI initiatives, like supplier diversity programs and external workforce diversity surveys, have been eliminated because of legal issues. Yet a number of businesses still maintain a focus on inclusive hiring and retention efforts. Costco just defeated an anti-DEI shareholder proposal, solidifying its intention to keep its corporation inclusive. JPMorgan Chase CEO Jamie Dimon stated that although the company is phasing out inefficient diversity programs, it continues to prioritize a more diversified workforce.

James White, a former Jamba Juice CEO and long-time corporate diversity advocate, contends that companies will keep spending on DEI—not necessarily called that, but because it is profitable. "The best leaders at the best companies are still trying to find ways to attract, hire, and retain the very best talent available from the widest demographic set available to them," he said.

Joelle Emerson, Paradigm Strategy CEO and culture and inclusion platform, feels that companies don't necessarily need to give up on their DEI initiatives simply because the politics of the environment have changed. "The things that have the greatest impact when it comes to hiring individuals from underrepresented groups are things that are not only completely legal, but they are also consistent with values of hard work and merit," she shared.

The Future of DEI

The future of DEI in corporate America and the federal government is uncertain. Although Trump has made it a priority of his administration to end DEI policies, diversity is viewed by many companies as a key to their long-term success. As the political landscape changes, the underlying objectives of DEI—providing fair treatment, increasing opportunity, and creating inclusive workplaces—are likely to endure, even if they are referred to by another name.

Finally, whatever it is called DEI, meritocracy, or inclusion, the controversy over workplace equity and equal opportunity is hardly resolved. DEI Explained: What It Is and Why It's So Controversial

Diversity, equity, and inclusion (DEI) is now one of the most polarizing issues in America, with people having very strong views on both sides. President Donald Trump, who is now back in power, has made the elimination of DEI programs one of his highest priorities. In his speech to Congress, he announced that his administration had ended DEI policies "in the entire federal government and, in fact, the private sector and our military." Within a week of his inauguration, he signed executive orders to reverse the programs, urging federal contractors to close what he referred to as "illegal DEI discrimination" and instructing agencies to audit companies with DEI programs.

What Is DEI?

DEI is short for diversity, equity, and inclusion. At its essence, it is practices and initiatives organizations undertake to prevent discrimination, achieve compliance with civil rights legislation, and foster a more inclusive environment. Proponents believe that DEI efforts aid businesses in securing and retaining great talent, drive innovation, and enhance bottom line performance. Massachusetts Governor Maura Healey, a Democrat and former civil rights attorney, was quoted in the New York Times recently as saying that CEOs of Fortune 500 companies agree that diversity makes their bottom line better.

But critics view DEI as a system that gives preference to race and gender over personal merit, claiming that it encourages "reverse discrimination" against white men. Some have gone so far as to say that DEI programs are part of a larger campaign to destroy traditional American values. Mike Gonzalez, a senior fellow at the conservative Heritage Foundation, has contended that DEI is not about diversity in the classical sense but about fundamentally transforming society.

The DEI Backlash

Pushback against DEI accelerated after George Floyd's murder in 2020, which created a wave of corporate and governmental initiatives for diversity. Companies and governments alike made commitments to add more faces to the table and eliminate bias in hiring and promotion. But conservative activists, think tanks, and legal organizations rapidly mobilized in opposition to DEI, portraying it as an ideological trend that threatens merit-based systems.

In 2023, the Supreme Court gutted race-conscious college admissions, a ruling that emboldened organizations like America First Legal, which was co-founded by Trump advisor Stephen Miller. The groups have since demanded major companies reverse DEI policies, claiming hiring quotas for women and minorities amount to illegal racial quotas.

The Trump administration has ramped up this battle by ordering federal agencies to examine DEI policies in government and the private sector. The Justice Department and the Equal Employment Opportunity Commission (EEOC) have released new guidelines explaining what they view as "unlawful DEI-related discrimination." These include hiring based on race or gender, mentorship programs for particular demographic groups, and corporate diversity training that separates workers by race or gender.

The Corporate Reaction

As a reaction to increasing legal and political pressure, certain firms have started reversing their DEI initiatives. Meta, the corporate parent of Facebook and Instagram, has canceled some of its DEI programs, whereas other firms, such as ExxonMobil and McKinsey, have changed their vocabulary to highlight "meritocracy" instead. McKinsey's global managing partner, Bob Sternfels, informed employees that the company does not promise equal results but tries to make sure that everyone gets an equal chance to succeed on their merits.

The term “meritocracy” has gained traction in corporate America, particularly among executives who are wary of legal challenges. Scale AI founder Alexandr Wang introduced the concept of “MEI” (merit, excellence, and intelligence), arguing that companies should focus solely on hiring “the best person for the job.” Trump has echoed this sentiment, calling for a “colorblind and merit-based” society.

But critics of the anti-DEI movement say that actual meritocracy only exists when there are systemic impediments addressed. David Glasgow, executive director at the Meltzer Center for Diversity, Inclusion, and Belonging at NYU School of Law, believes that DEI programs assist in providing a level playing field by widening the talent pool and making sure that hiring and promotion decisions are actually made based on ability rather than unconscious bias or structural disadvantages.

The Effect on Workplace Diversity

The backlash against DEI has already had quantifiable impacts on workplace diversity. Between 2020 and 2022, the percentage of Black executives in S&P 100 firms rose by almost 27%, based on workforce data gathered by the federal government. The DEI backlash has, however, slowed that trend. In 2023, the percentage of Black executives fell by 3%, twice the rate of white executives.

Even with these challenges, civil rights leaders caution that abandoning DEI policies may unravel long-won progress. Reverend Adam Russell Taylor, the president of the Christian nonprofit Sojourners, has contended that abolishing DEI threatens to restore workplaces in which prejudice and discrimination run amok. He thinks that abandoning DEI efforts reifies the notion that leadership and ability are mostly white male domains, a perception that runs counter to America's fundamental values of justice and opportunity.

Is DEI Dying?

Although the term "DEI" has been politicized by detractors, much of its underlying substance continues to endure under new labels. Firms are quietly moving away from overt DEI terminology in their public disclosures, instead using words such as "inclusion" and "belonging." For instance, BlackRock, the global asset manager with the largest assets under management, recently merged its DEI and talent management personnel into one "Talent and Culture" unit.

Certain DEI-related efforts, like supplier diversity initiatives and responding to external workforce diversity surveys, have been eliminated for legal reasons. Still, most firms continue to focus on inclusive hiring and retention strategies. Costco recently voted down an anti-DEI shareholder resolution, solidifying its dedication to a inclusive corporate culture. JPMorgan Chase CEO Jamie Dimon has stated that although the company is phasing out unproductive diversity initiatives, it is still committed to enhancing workforce diversity.

James White, a former CEO of Jamba Juice and an longtime corporate diversity advocate, insists that companies will keep investing in DEI—even if not using that term—but because it pays. "The greatest leaders of the greatest companies are still struggling to figure out how to hire, attract, and retain the very best possible talent available within the broadest demographic pool open to them," he said.

Joelle Emerson, CEO of the inclusion and culture platform Paradigm Strategy, thinks that businesses don't need to give up on their DEI initiatives even if the politics have changed. "The things that are most effective when bringing people in from underrepresented groups are things which are not only completely legal, but are also consistent with values of hard work and merit," she explained.

The Future of DEI

The fate of DEI in corporate America and the federal government is uncertain. Although Trump has made it a priority of his administration to eradicate DEI policies, most businesses view diversity as vital to their long-term success. As the political landscape evolves, the underlying aims of DEI—providing equitable treatment, increasing opportunity, and creating inclusive workplaces—are likely to endure, even if called something different.

Ultimately, whether labeled DEI, meritocracy, or inclusion, the debate over workplace fairness and equal opportunity is far from over.