The Evolving Landscape of Diversity in America and Its Impact on Business
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“Strength lies in differences, not in similarities.” — Stephen R. Covey
Introduction
Let’s discuss the concept of diversity. Admittedly, many might shy away from this topic. Often, diversity training is regarded as one of the least enjoyable aspects of corporate education. In academia, diversity discussions are frequently relegated to the final week of classes, leading to their omission in many curricula. Yet, addressing diversity is critical today, as the United States continues to evolve into a more diverse nation annually. If you are involved in any business capacity, it is essential—truly essential—to engage with the concept of diversity.
The Data on Diversity
The evidence surrounding diversity is compelling. A recent report from the nonpartisan organization USA Facts, titled “How Has the Population Changed in the US?” based on Census Bureau data, reveals significant demographic shifts in the United States. Over just over a decade, the racial composition of the country has transformed considerably. As shown in Figure 1 (USA Facts: Racial Makeup of the US, 2010 vs. 2022), while the white population still forms the majority, the percentage of individuals identifying as white (non-Hispanic) dropped from 63.8% in 2010 to 58.9% in 2022, marking a decrease of 4.9%. This decline represents the largest reduction among any ethnic group during this period. In contrast, the Hispanic/Latino population experienced the most rapid growth, rising from 16.4% to 19.1% over the same timeframe. Similarly, the Asian (non-Hispanic) demographic increased from 4.8% to 6.1%, and the black (non-Hispanic) population grew from 12.3% to 12.6%. The number of individuals identifying as multiracial also increased from 1.8% in 2010 to 2.4% in 2022. Overall, this data illustrates the rising presence of ethnic minorities alongside a decrease in the majority white, non-Hispanic population.
Figure 1 — USA Facts: Racial Makeup of the US, 2010 vs. 2022
Source: USA Facts, “How Has the Population Changed in the US?,” January 2024 (Used with permission).
As depicted in Figure 2 (USA Facts: Population by Race and Ethnicity in the US, 2022), the white, non-Hispanic demographic continues to be predominant at 58.9%, although this is the lowest percentage recorded in U.S. history. In 2022, the population breakdown was as follows:
- White (non-Hispanic): 196,225,966 (58.9% of total)
- Hispanic/Latino: 63,664,346 (19.1% of total)
- Black (non-Hispanic): 42,070,471 (12.6% of total)
- Asian (non-Hispanic): 20,276,025 (6.1% of total)
- Multiracial (non-Hispanic): 7,993,849 (2.4% of total)
- American Indian/Alaska Native (non-Hispanic): 2,420,972 (0.7% of total)
- Native Hawaiian and Other Pacific Islander (non-Hispanic): 635,928 (0.2% of total)
Figure 2: USA Facts: Population by Race and Ethnicity in the US, 2022
Source: USA Facts, “How Has the Population Changed in the US?,” January 2024 (Used with permission).
The Diversity Index
How prevalent is diversity in our daily lives? The Census Bureau quantifies this through the Diversity Index, a straightforward yet powerful metric. Essentially, the Diversity Index (DI) is defined as:
“It is the probability that two individuals selected at random belong to different racial and ethnic groups. A score of 0% indicates a homogenous population, while a score close to 100% suggests significant diversity within the population.”
The Diversity Index for the U.S. reached 61.1% in 2020, reflecting a 6.2% increase from the previous decade, where it was 54.9%. Figure 3 (Racial Diversity Across America, as Represented by the Diversity Index) showcases this information, detailing the Diversity Index for each state and Washington D.C. for 2020. Notably, Hawaii emerged as the most diverse state with a score of 76%, while Maine was the least diverse at 18.5%.
Figure 3: Racial Diversity Across America, as Represented by the Diversity Index
Source: Marcus Lu, “Mapped: Racial Diversity by U.S. State,” Visual Capitalist, January 2024 (Used with permission).
The Diversity Index for each state and Washington D.C. is summarized below in Table 1 (States Ranked by Their Diversity Index Score, 2020), with the states ordered from most to least diverse:
Table 1: States Ranked by Their Diversity Index Score, 2020
- Hawaii (76.0%)
- California (69.7%)
- Nevada (68.8%)
- Maryland (67.3%)
- Washington, D.C. (67.2%)
- Texas (67.0%)
- New Jersey (65.8%)
- New York (65.8%)
- Georgia (64.1%)
- Florida (64.1%)
- New Mexico (63.0%)
- Alaska (62.8%)
- Arizona (61.5%)
- Virginia (60.5%)
- Illinois (60.3%)
- Delaware (59.6%)
- Oklahoma (59.5%)
- Louisiana (58.6%)
- North Carolina (57.9%)
- Washington (55.9%)
- Mississippi (55.9%)
- Connecticut (55.7%)
- South Carolina (54.6%)
- Alabama (53.1%)
- Colorado (52.3%)
- Massachusetts (51.6%)
- Arkansas (49.8%)
- Rhode Island (49.4%)
- Tennessee (46.6%)
- Oregon (46.1%)
- Kansas (45.4%)
- Michigan (45.2%)
- Pennsylvania (44.0%)
- Indiana (41.3%)
- Nebraska (40.8%)
- Missouri (40.8%)
- Utah (40.7%)
- Minnesota (40.5%)
- Ohio (40.4%)
- Wisconsin (37.0%)
- Idaho (35.9%)
- South Dakota (35.6%)
- Kentucky (32.8%)
- North Dakota (32.6%)
- Wyoming (32.4%)
- Iowa (30.8%)
- Montana (30.1%)
- New Hampshire (23.6%)
- Vermont (20.2%)
- West Virginia (20.2%)
- Maine (18.5%)
Source Data: US Census Bureau, “Racial and Ethnic Diversity in the United States: 2010 Census and 2020 Census,” August 2021.
When two individuals interact, there is a significant likelihood that at least one belongs to a racial or ethnic minority group. Conversely, in states like New Hampshire (23.6%), Vermont (20.2%), and Maine (18.5%), the chances of encountering individuals from minority groups are considerably lower.
The substantial transformation in the U.S. racial landscape is illustrated in Figure 4 (Diversity Index for U.S. States, 2010 vs. 2020), indicating an overall increase in diversity, with states like Texas and New York experiencing notable improvements in their Diversity Index scores.
Figure 4: Diversity Index for U.S. States, 2010 vs. 2020
Source: US Census Bureau, “Racial and Ethnic Diversity in the United States: 2010 Census and 2020 Census,” August 2021 (Used with permission).
“A diverse mix of voices leads to better discussions, decisions, and outcomes for everyone.” — Sundar Pichai, CEO of Google and Alphabet
Analysis and Discussion
In summary, the data is unmistakable: Diversity is progressing. The United States is undergoing a demographic transformation in real-time. This evolution is accompanied by societal challenges, as progress often brings disruption and differing opinions—ranging from pride and optimism to fear and resentment. While much can be discussed regarding the implications of America’s increasing diversity on politics, economics, and social structures, my focus remains on the business consequences of these demographic changes.
In short, diversity yields results! Numerous studies consistently demonstrate the positive impact of diversity in business. To paraphrase a famous line from Michael Douglas’s character in the film “Wall Street”:
“Diversity, for lack of a better term, is beneficial! Diversity is essential. Diversity is effective.”
Embracing diversity can be a contentious approach for companies, especially in light of ongoing debates surrounding DEI (Diversity, Equity, and Inclusion) initiatives. Nevertheless, the evidence is clear—diversity is a smart business strategy today! Aligning with the evolving landscape of society is crucial for businesses of all sizes, regardless of their current demographics. Companies that reflect America's diversity will be better positioned to connect with a wider customer base, attract top talent, and ultimately enhance their growth and profitability.
This encapsulates decades of rigorous, results-oriented academic research on corporate diversity. As demographic changes continue, forward-thinking business leaders are betting that a diverse America will lead to a richer, more inclusive society—one enriched not only by racial and ethnic diversity but by diversity across various dimensions, including age, gender, spirituality, economic status, and social perspectives. Companies that innovate to cater to a more diverse population will emerge as leaders in tomorrow's marketplace.
It is crucial to acknowledge that, in our current era of rapid communication, some individuals vehemently oppose the increasing diversity. I hope that my insights will not be misappropriated to support harmful ideologies, such as White Nationalism or the so-called Great Replacement theory. If any of my work is cited in support of such views, please understand that I do not endorse or condone any form of hate or discrimination.
About David Wyld
David C. Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher, writer, publisher, executive educator, and seasoned expert witness. You can explore his work at https://authory.com/DavidWyld. Subscribe to his Medium article feed at https://davidwyld.medium.com/subscribe.
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