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Salvo 04.19.2022

Woke Racism

Low angle shot of an unrecognizable group of businesspeople standing together and holding each others arms in a circle

Corporate America has embraced discrimination on the basis of race.

Since the death of George Floyd nearly two years ago, the largest American corporations have made massive spending commitments to support racial justice. According to the consulting company McKinsey & Company, initial corporate investments in racial justice initiatives have now topped $200 billion.

Initially, most of these expenditures, in support of education, affordable housing, healthcare, job training, charitable non-profits, and criminal justice reform, seemed relatively benign, if not necessarily in line with maximizing shareholder value. But then there were other, more overtly political initiatives, such as making Juneteenth a paid holiday, opposing election integrity bills, or matching employee donations to the Black Lives Matter Foundation. Most of these forays into social justice could be shrugged off as simply the cost of doing business in the wake of the racially charged summer of 2020.

But now several Fortune 500 companies are crossing a dangerous line. In the name of equity, a group of large publicly traded companies have decided to engage in explicit race discrimination against their own customers.

Equity is all the rage now among the woke institutions. According to the popular theory of systemic racism, racial disparities are all caused by mostly hidden racism “baked into” the  American system. To fight systemic racism, institutions must pursue equity to level the playing field. In practice, equity involves targeting benefits directly to minority groups suffering the effects of systemic racism. As Facebook puts it, “we are committed to advancing equity and racial justice by investing in the Black community, elevating Black voices, and directly funding racial justice organizations.” 

This is where the legal problems begin. Targeting money to one racial group necessary means excluding other racial groups because of their race. This is race discrimination, and, in most circumstances, illegal under federal, state, and local laws.

Cable giant Comcast sponsors a program called Comcast RISE. According to Comcast, minority-owned and women-owned businesses have suffered disproportionately during the pandemic. Comcast’s proposed solution is to target these businesses with free consulting, media, advertising, and technology assistance, along with up to $10,000 in grants. Businesses owned by white males cannot even be considered for the program. They are excluded because of their race and gender.

Earlier this month, small business owners from Indiana, Pennsylvania, Massachusetts, and Tennessee sued Comcast in federal court. Represented by the Wisconsin Institute for Law and Liberty, where I serve as deputy counsel, these business owners allege they have been excluded from Comcast RISE on account of their race. And this is a violation of federal law. The Civil Rights Act of 1866, passed in the aftermath of the civil war, prohibits private parties from discriminating based on race in the creation of contracts. And that’s exactly what Comcast is doing with Comcast RISE.

Comcast is not alone. Amazon offers a program called the Black Business Accelerator. This program offers cash, advertising credits, imaging services, and business coaching services to Amazon sellers identified as a “minority-owned business.” White-owned businesses need not apply. This program is facing a class action lawsuit in federal court in California based on California’s Civil Rights Act.  

These programs are found across major businesses. BMO Harris offers a 0.25 percentage point interest rate reduction for minority-owned businesses seeking a line of credit. Mastercard offers “financial tools, investment and partnerships to bring Black women-owned businesses into the digital economy.” Microsoft operates a program called “Black Partner Growth Initiative,” which provides “personalized guidance and support” to minority owned businesses, along with a range of special financing programs. 

These programs all discriminate based on race. White customers are ineligible for benefits that minority-owned businesses may receive. As such, these programs may face significant legal challenges based on a variety of federal, state, and local nondiscrimination laws.  

Why is corporate America engaging in such explicit racial discrimination? The companies appear to have calculated that the good will generated by being woke outweighs any possible downside, including lawsuits.

Why does America put up with this? If the shoe was on the other foot, and these new corporate initiatives were “Whites Only,” no one would stand for such blatant race discrimination. But because corporations create these programs in the name of “equity” to fight “systemic racism,” they seem to be a tolerable or benign form of race discrimination to some.

Widespread tolerance to race discrimination is a dangerous shift in American culture. If our nation’s struggle to live up to its founding principles has taught us anything, it’s that race discrimination should never be tolerable or ever be considered benign. There are no caveats to equality. To paraphrase Justice Clarence Thomas, when racial groups are singled out for special treatment, it “demeans us all.” Corporate American would do well to consider that caution and recommit their companies to the foundational principle of nondiscrimination. 

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