President Trump says he is taking aim at a key mechanism by which many companies are essentially forced to practice racial discrimination in hiring. The “key tool” for transforming “America’s promise of equal opportunity into a divisive pursuit of results preordained by irrelevant immutable characteristics” he is targeting in an Apri 23 Executive Order is the disparate-impact standard.
Although all people have different abilities and backgrounds, disparate-impact holds that generally, when job applicants or employees are looked at in racial or other identity-based categorizations, the groups should all be equal, and any disparities among the categories are presumed to be discriminatory and therefore illegal.
According to the EO, disparate-impact liability “holds that a near insurmountable presumption of unlawful discrimination exists where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved…. Disparate-impact liability all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability. It not only undermines our national values, but also runs contrary to equal protection under the law and, therefore, violates our Constitution.”
Under disparate impact, job-related evaluations or testing are presumably illegal if they result in different results on a racial or gender basis among those people who choose to apply for the job. Because of the legal risks such testing would bring, most employers choose to rely on proxies for aptitude, such as college degrees, leading to the proliferation of job listings that unnecessarily require various levels of academic degrees. This “credential inflation” is one of the factors driving ballooning college debt—now over $1.5 trillion in the U.S.
