Unequal Opportunity: Labor statistic flaws conflate foreign and US-born ethnic groups

BOSTON, Massachusetts — The way that companies count their workers obscures who is getting some of the best jobs in the United States. It disguises the success of immigrants and prevents homegrown workers from competing more effectively with talent from everywhere.

Every year private employers with 100 or more workers and government contractors with 50 or more employees are required by the Equal Employment Opportunity Commission to count their workers in the US and tally the results. The EEO-1 form requires employers to define workers according to race, ethnicity and gender. The form contains no category for national origin.

This practice results in a worker who was born and raised in Shanghai, for example, being identified the same way as an American minority of Chinese heritage whose parents built the railroads across the west in the 19th Century. Both are counted as Asian. The lack of differentiation prevents companies, the government and the public from understanding how well — or poorly — homegrown minorities are doing because they are lumped together with foreign-born “minorities.”

The failure to draw distinctions enables multinational companies to use global diversity to trump US diversity. An independent survey of the Fortune 100 in 2009 revealed that 52 percent of Asian corporate executive officers — who are legally responsible for setting policy in the companies — were born outside of the US. Most came from India. More than half of the Hispanic and Latino executive officers in the Fortune 100 also were born beyond US borders; they came from eight different countries in Latin America.

Global competition for the best jobs also impacts white men. The study showed that nine percent of white male executives in the Fortune 100 were born abroad. They came from Canada, Norway, the United Kingdom, Germany, France and several other countries. In the EEO census, they were counted as white males, not as immigrants.

The Equal Employment Opportunity Commission should require companies to count immigrant workers as immigrants to provide an accurate picture of the American workplace today. Immigration is an important and cherished narrative in American history, and national origin is protected from discrimination by the Civil Rights Act of 1964. The reason for differentiating is not to stigmatize immigrants, but to understand why each of the groups is succeeding or failing in employment.

In 2009, executive officers of Fortune 100 companies born outside the country were overrepresented. They comprised 10 percent of executive officers, while the foreign-born group that would be educated and experienced enough to hold such positions comprised just 1.5 percent of the total US population. If immigrant workers are better prepared to succeed in the modern workplace than homegrown workers, we should try to discover why.

It may be that these immigrants are simply more qualified — better educated and harder working — than homegrown workers. It is well known that the US is not producing enough college graduates in engineering, mathematics and the sciences. A major proportion of graduate students in these fields are foreign born. After getting their degrees here, frequently they are hired by corporations and begin to advance in their careers, as Indra Nooyi, PepsiCo’s CEO, did.

Nooyi took a route to the top that is familiar to male immigrants. But her accomplishment is unusual compared to both female immigrants and American female minorities. Just 20 percent of the Fortune 100 employed women of color as executive officers in 2009. Her success suggests that women of color should concentrate on graduating from business schools in the US if they wish to succeed in corporate America.

Yet Nooyi’s leadership also highlights a troublesome pattern among foreign-born CEOs. Under her command, PepsiCo has employed more immigrant executive officers than ever before. In 2009, 45 percent of PepsiCo’s executive officers were born outside the US compared to an average of 10 percent for Fortune 100 companies in general. Foreign-born CEOs employ four times the level of foreign-born people working directly for them as American-born CEOs do.

Little scholarly research exists examining multinational hiring and promotions in the US. One study by Jacqueline Landau that tracked promotion practices at a multinational Fortune 500 financial services firm found that Hispanics, some of whom were born outside the United States, were rated as higher-potential managers than native-born blacks and Asians. One conclusion to draw is that employers may have assumed that someone who was born outside the United States would have greater knowledge of how to excel in foreign markets.

But that assumption is not necessarily correct. Homegrown US minorities and whites may have just as much or more experience that would be effective in developing international markets.

Hispanic Americans tend to straddle two cultures growing up in this country, speaking Spanish at home and English at school and work. Chinese and Japanese Americans also practice cultural traditions and speak native languages at home. Asian Indian Americans frequently travel to India for months during the summer to reconnect with family who speak Urdu and other languages.

More than a million members of the US military have served overseas since 9/11. The experience and perspective of veterans should be valuable to companies seeking to develop their business in emerging markets.

The assumption that Americans have fewer skills to operate internationally than those born overseas is a generalization that loses its significance when closely examined. It is a stereotype that may be true in some cases but not in others. Americans are no longer innocents abroad.

By counting immigrants separately from native-born Americans, we can more clearly understand the path to greater success for each group.

Susan E. Reed is author of “The Diversity Index: The Alarming Truth About Diversity in Corporate America … and What Can Be Done About It.” She covered the Bosnian War from 1992 to 1995 for CBS News.