Wall Street prides itself as home for the world’s best financial knowledge, where the world’s leading financial experts are supposed to be. Because of this claim, every day Wall Street makes numerous decisions that have grave implications on the financial system of the world. How they create such decisions, then, is important if we want to maintain an efficient and fair global financial system. Probably the most important factor that affects how these decisions are made is the diversity of decision makers.
This is a blog infographic series that aims to shed light on diversity (or lack thereof) in Wall Street, or the US Financial Industry more broadly. The inspiration for this project came from Karen Ho’s Liquidated: An Ethnography of Wall Street. In this book, she talks about the “culture of smartness” and the “politics of hard work” that exist in Wall Street. Among many other consequences, these result to a homogeneous composition of senior decision makers at the biggest banks in the world: typically, white, male, and upper-class individuals.
To investigate the current diversity levels in Wall Street, I focus on three types of diversity: racial, gender, and the number of immigrants. Where data on Wall Street employees was unavailable, the broader financial industry of the entire United States was used instead.
RACIAL DIVERSITY
Racial diversity is important if Wall Street wants to claim that it is home to the world’s best financial experts. If Wall Street companies are to act and decide on behalf of the biggest companies in the world, diversity of perspectives and opinions will be important. The fact that the world’s 6 biggest banks are still overwhelmingly white may lead to biased decisions that do not serve the interests of the majority of the population. If these banks want to prove their place in the world, then it must start by being more inclusive in its hiring practices. Companies like Goldman Sachs have already adopted such diversity-focused policies, although we have yet to find out how effective they are.
GENDER DIVERSITY
Just like racial diversity, gender diversity is also important if Wall Street wants to claim that they are qualified to make the world’s biggest financial decisions. There needs to be a variety of ideologies, both in terms of race and gender, for a well-informed decision to be made. The infographics above show that even though there are more women than men in the labour force, extremely few of them occupy top positions in financial companies, preventing them from having a say in the most important decisions made in the industry. They still also earn less than men, which may be a barrier to entry for women who want to have a career in finance. Studies show that gender-diverse companies are not only seen as more inclusive, but also experience better financial outcomes.
IMMIGRANTS IN THE FINANCE INDUSTRY
These infographics show that immigrants make up a very small portion of the United States financial sector. They are also less likely to be employed in the same sector compared to their US-born counterparts. This is worrisome because immigrants are more likely to be more creative, be more hardworking, and possess a more nuanced perspective of the world because of their experiences. These allow them to not only be better decision makers but also better leaders, since leadership skills and excellent decision making do not always coexist. As the second infographic shows, it is possible to allow immigrants at the helm of companies and still succeed.
As Karen Ho says in her book, people in Wall Street believe that they deserve the global influence that they have because of the “culture of smartness” that exists there. Unfortunately, this “smartness” is typically perpetuated by only involving white, male, Ivy-League educated individuals. Only once Wall Street becomes truly diverse would I be willing to listen to its claims that attempt to justify its global dominance.
REFERENCES
Alden, W. (2014, September 30). Wall Street’s Young Bankers Are Still Mostly White and Male, Report Says. Retrieved from https://dealbook.nytimes.com/2014/09/30/wall-streets-young-bankers-are-still-mostly-white-and-male/
Anderson, S. (2011, October 25). 40 Percent of Fortune 500 Companies Founded by Immigrants or Their Children. Retrieved April 04, 2017, from https://www.forbes.com/sites/stuartanderson/2011/06/19/40-percent-of-fortune-500-companies-founded-by-immigrants-or-their-children/#8e8a3aa4a590
Bureau of Labour Statistics (2016). Women’s earnings 83 percent of men’s, but vary by occupation. Retrieved April 06, 2017, from https://www.bls.gov/opub/ted/2016/womens-earnings-83-percent-of-mens-but-vary-by-occupation.htm
Gallup, I. (2014, January 20). The Business Benefits of Gender Diversity. Retrieved April 05, 2017, from http://www.gallup.com/businessjournal/166220/business-benefits-gender-diversity.aspx
Griswold, D. (2002). This article appeared in Insight on February 18, 2002., D. (2002, February 18). Immigrants Have Enriched American Culture and Enhanced Our Influence in the World. Retrieved April 04, 2017, from https://www.cato.org/publications/commentary/immigrants-have-enriched-american-culture-enhanced-our-influence-world
Jones, M. (2015, October 20). Wall Street has a problem with women. Here’s why you should worry. Retrieved from https://www.weforum.org/agenda/2015/10/wall-street-has-a-problem-with-women-heres-why-you-should-worry/
Kiersz, P. C. (2015, August 25). These charts show just how white and male Wall Street really is. Retrieved April 04, 2017, from http://www.businessinsider.com/wall-street-bank-diversity-2015-8
Littleton, C. (2016, April 12). Women on Wall Street Face Steep Climb to the Top. Retrieved April 04, 2017, from http://variety.com/2016/biz/features/women-wall-street-gender-balance-1201745001/
Roth, L. (2015). Selling Women Short Gender and Money on Wall Street. Princeton Univ Pr.
The “New American” Fortune 500 (Rep.). (2011). Partnership for a New American Economy.
The Pew Charitable Trusts (2015). Immigrant Employment by State and Industry. Retrieved April 04, 2017, from http://www.pewtrusts.org/en/multimedia/data-visualizations/2015/immigrant-employment-by-state-and-industry
Women in S&P 500 Companies (Rep.). (2014). Catalyst.
