Time for Tech to Step Up on Diversity

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In 2014 America’s biggest tech companies began releasing their diversity numbers. Despite the fiercely competitive nature and distinctive offerings of Google, Yahoo, Facebook and Twitter, the percentages of their workforces made up of African Americans and Latinos was eerily similar. Only 2% of almost every company’s workforce was African American, and about 3-4% was Hispanic or Latino. Three years later, the numbers aren’t much better.

Now the Government Accountability Office (GAO) has issued a report broadening the research beyond individual companies and looking at the sector at large from 2005 to 2015. Here’s what GAO found:

The estimated percentage of minority technology workers increased from 2005 to 2015, but GAO found that no growth occurred for female and Black workers, whereas Asian and Hispanic workers made statistically significant increases. Further, female, Black and Hispanic workers remain a smaller proportion of technology employees in mathematics, computing and engineering occupations than their representation in the general workforce.

The low numbers of women and people of color are not just present in the workforce and leadership ranks of these companies. The trend continues when looking at entrepreneurs. CB Insights studied diversity in startup teams receiving venture capital investment and found that teams of all white founders received 87% of the investment dollars. African American teams only got one percent of investments, and investments with Latino teams were so negligible they didn’t even make the graph.

Revealing the plight of Black women makes the problem most starkly clear. Although Black and Latina women are the fastest growing group of entrepreneurs in the country with 1.5 million businesses that rake in $44 billion in revenue, they can’t crack the code in tech investment. While the typical startup founded mostly by white males raises an average of $1.3 million in funding, black women raise only $36,000.

Closing the tech employment gap will help. According to an Economic Policy Institute analysis, women make about 81 cents on the dollar versus men, African American women make 65 cents and Latinas just 59 cents. However, in tech jobs the pay gap closes. The Department of Commerce reports that women in STEM jobs make 33% more than their non-tech counterparts.

The GAO report found that the Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s Office of Federal Con­tract Compliance Programs (OFCCP) can help by focusing on federal tech contractors. The reports offer six recommendations including developing better tracking of hiring and requiring more specific goals for companies to hire women and people of color.

Federal contractors hiring and promoting more women and people of color could be a game changer. The big private players recruit at a small number of schools. To meet higher numbers, they will need to broaden and diversify the schools where they recruit. These new hires should also be able to found companies of their own one day and make a stronger case to funders. However, the funding mechanisms deserve a closer look too. Founders need greater access to funds that directly target investments with diverse entrepreneurs. Even if these startups don’t work out, team members will be more able to move laterally in the industry once they have proven themselves.

America has a lot of work to do to fix our tech diversity problem. If we don’t get more serious and add more rigor, stagnation will be the result. In a workforce becoming more diverse, addressing the lack of diversity in the booming tech sector will increase incomes for a wider range of workers, build wealth for struggling families and close gaps in disparities across the board.

Jamal Simmons is a seasoned political analyst, co-chairman of the DC-based Internet Innovation Alliance (IIA), and co-founder of CRVIII Inc.

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