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Market-Based Solutions to Vital Economic Issues

Diversity, Equity and Inclusion

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While the gender pay gap has received significant attention in recent years, little progress has been made to close it; in fact, in 2019, women still earned only 82 cents for every dollar received by their male counterparts for equal work. Policymakers in recent years have developed creative solutions aiming to close the gap, including bans prohibiting employers from asking for a job applicant’s salary history. However, in this week’s Kenan Insight, new research from our experts examines whether such well-intentioned bans are inadvertently lowering wages for all employees.

As of 2019, salary history bans have been enacted by 17 states and Puerto Rico with the stated purpose of reducing the gender pay gap. We argue that salary history bans may negatively affect wages as employers lose an informative signal of worker productivity. We empirically evaluate these laws using a large panel dataset of disaggregated wages covering all public sector employees in 36 states and find, on average, salary history bans lead to a 3% decrease in new hire wages. We find no decrease in the gender pay gap in the full sample and a modest 1.5% increase in the relative wages of women, as compared to men, among new hires most likely to have experienced gender discrimination historically.

Join UNC and 100 Black Angels & Allies for an evening of fun, connection and learning. If you have been reading about the full Black Technology Ecosystem Investors (BTEI) Certificate Program and are curious about whether it’s right for you, this is an event you won’t want to miss! You will hear from both practiced investors and everyday people who want to steer their investment towards Black-founded companies and venture funds. We’ll take a deeper look at what topics are included in the BTEI course, what a typical session might look like and what becoming BTEI certified might mean for you personally.

Join UNC and OHUB for an evening of fun, connection and learning. If you have been reading about the full DEI Solutions (DEIS) Certificate Program and are curious about whether it’s right for you, this is an event you won’t want to miss! Hear from top leaders who are skilled at incorporating DEI solutions in their companies and learn about a helpful framework to support those efforts.

The North Carolina Community Action Association (NCCAA) commissioned a study to assess the impact of the COVID-19 pandemic on its efforts to combat poverty and facilitate self-sufficiency in low-income communities throughout the state. We conducted focus groups with individuals served by Community Action Agencies (CAAs) and conducted a corresponding set of key informant interviews with identified leaders in five communities across the state. The research focused on five themes. We generated eight key takeaways from our content analysis of the focus group transcripts and nine key takeaways from our content analysis of the transcripts emanating from our Zoom sessions with community key informants.

While the COVID-19 pandemic was devastating for many, research shows its impact was not felt equally. Black Americans experienced disproportionate health and economic ramifications, which compounded the financial, social and psychological strain many felt pre-pandemic, and have contributed to growing inter-generational wealth disparities. In today’s Kenan Insight, our experts explore whether the multi-trillion dollar “Build Back Better” plan proposed by the Biden administration holds the potential to begin closing pervasive gaps in American society.

We measure and calibrate the racial/ethnic densities (RAEDs) of executives in US public companies. We show that the magnitudes of underrepresentation for Blacks and Hispanics and overrepresentation for Whites are 10+ times larger when executive RAEDS are calibrated against the US population than when calibrated against an economic benchmark that reflects the demand for and supply of proto-executive talent. We conclude that at least 90% of the underrepresentation of Black and Hispanic executives in US public companies comes from factors in effect before US public companies hire proto-executive talent rather than actions taken by companies after such talent is hired.

In a series of influential studies, McKinsey (2015, 2018, 2020) report a statistically significant positive relation between the industry-adjusted EBIT margin of global samples of large public firms and the racial/ethnic diversity of their executives. However, when we revisit McKinsey’s tests using recent data for US S&P 500® firms, we find statistically insignificant relations between McKinsey’s inverse normalized Herfindahl-Hirschman measures of executive racial/ethnic diversity and not only industry-adjusted EBIT margin, but also industry-adjusted sales growth, gross margin, ROA, ROE, and TSR. Our results suggest that despite the imprimatur often given to McKinsey’s (2015, 2018, 2020) studies, caution is warranted in relying on their findings to support the view that US publicly traded firms can deliver improved financial performance if they increase the racial/ethnic diversity of their executives.

Much has been written about the disproportionate number of women who have suffered pandemic-related job losses during COVID-19, but a related consequence has not been as well explored: the serious disruption of women’s careers, particularly in fields in which “path dependence” matters for success. In this Kenan Insight, we examine this more subtle asymmetry in the pandemic’s impact as indicative of far broader issues for women’s advancement in the workplace.

On Thursday, April 29, Lyft Chief Policy Officer and Advisor to the Co-founders Anthony Foxx joined UNC Kenan-Flagler Business School Dean Doug Shackelford for an exclusive virtual discussion. Foxx discussed his career as the secretary of transportation under President Obama and as the mayor of Charlotte, the innovative technologies transforming transportation and how we can transition to a greener economy.

Lowe’s CEO Marvin Ellision shared the company's approach to diversity, equity and inclusion following this past summer’s social unrest. In this conversation-style format, Mr. Ellison gave a brief overview of Lowe’s anti-racism statement and reviewed specific actions the company has taken to combat racism and inequality. He shared insights on his hands-on leadership approach and how it impacts his relationships with employees and his success at Lowe’s.

These five techniques for writing problem statements can improve results from crowdsourced challenges.

Our Diversity, Equity and Inclusion Experts

Kim Allen

Kenan Scholars Program Director

Anusha Chari

Professor of Economics, UNC-Chapel Hill, and Professor of Finance, UNC Kenan-Flagler Business School

    Sreedhari Desai

    Assistant Professor of Organizational Behavior

      Olga Hawn

      Assistant Professor of Strategy and Entrepreneurship, Sustainability Distinguished Fellow and Faculty Director of the Center for Sustainable Enterprise

      Jim Johnson

      William R. Kenan Jr. Distinguished Professor of Strategy and Entrepreneurship, Director of the Urban Investment Strategies Center 

      Stephanie Mahin

      Clinical Assistant Professor of Management and Corporate Communication

      Shimul Melwani

      Assistant Professor of Organizational Behavior, UNC Kenan-Flagler Business School