Why do businesses support affirmative action in college admissions?

Affirmative action refers to policies that are aimed at increasing the numbers of people from marginalized groups in settings like education and the workplace where they have been historically underrepresented. Using such policies is a way to increase diversity and to correct systems and structures that have resulted in discrimination against those marginalized groups. In the context of college admissions, some schools consider race as one of many factors in a holistic review process to promote diversity within their student bodies. Harvard College and University of North Carolina at Chapel Hill (UNC-Chapel Hill) have both used this type of holistic review for many years and were sued by the Students for Fair Admissions for considering race.

In 2023, the Supreme Court decided that the race-conscious admissions processes used by both Harvard and the UNC-Chapel Hill unlawfully used race to evaluate applicants in violation of the Constitution.^[1] This decision affects the many colleges that use race as a factor in their admissions processes, the applicants from historically marginalized backgrounds who will be denied admission because of this change, and employers who want to recruit highly qualified graduates who have been able to develop equity and inclusion as a career skill in diverse academic environments. However, the Court specifically said that the decision should not be interpreted “as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.”^[2]

In 1996, Californians voted to ban affirmative action in state university admissions. Because that change in the law took place so long ago, it is possible to study its effect over time. In the year that followed, the enrollment of Black and Hispanic students immediately declined approximately 40% at the most selective universities in the state.^[3]

Without access to the most selective and prestigious universities in California, like the University of California at Berkeley, those students had to attend less selective schools. In the long term, economist Zachary Bleemer found that lack of access resulted in those students being less likely to earn a graduate degree and less likely to earn a degree in high paying fields such as engineering and science. Statistics also show that Black, Hispanic, and Indigenous students who entered college after the ban on affirmative action earned approximately 5% less than if they had access to the more selective colleges.^[4]

At the same time, there was no gain or improvement in outcomes for White and Asian students.^[5] The implication of Bleemer’s study is that while college admissions are viewed as a zero sum situation where one applicant’s admission corresponds to another applicant who will be denied admission, the effects of affirmative action are not balanced. Affirmative action in California was more valuable to Black and Hispanic students who came from lower income neighborhoods and lacked robust social and professional networks, compared to the White and Asian students who took their places.^[6]

During the lawsuit, many large employers such as Apple, Levi Strauss, Northrop Grumman, Starbucks, and United Airlines expressed support for affirmative action.^[7] They recognize the importance of equity and inclusion as an important career skill. These major American companies argued that employers need university admissions programs that lead to graduates who have been educated in the kind of diverse environments that affirmative action promotes. ^[8] Their reasoning is that diverse workforces improve business performance and strengthen the globalized economy by meeting the needs of diverse clients, contributing creative critical thinking, and strengthening stakeholder relationships.^[9] However, because Supreme Court cases are legal precedents that can be applied to other cases, this decision may ultimately influence how businesses pursue diversity in the workplace by scaling back their efforts to avoid potential lawsuits.^[10]