Minnesota diversity index shows companies have made progress — but still have a ways to go

While Minnesota employers made progress in diversity goals, senior leadership is still lagging population demographics and only 14% pay all employees a family-sustaining wage.

Those are among the findings of the second Center for Economic Inclusion's Racial Equity Dividends Index, which was released Thursday.

The 22 companies in the 2023 report have 415,000 employees, including more than 95,000 in Minnesota, the majority in the Twin Cities. The metro area's population is 25% Black, Indigenous, Hispanic or Asian; only 14% of senior leaders at the companies are people of color, the study found.

Of supervisors, 16% at the companies are people of color.

Still, that's progress. Last year's index found 8% of the surveyed firms paid "family-sustaining" wages and only 5% had leadership representing the demographics of the population.

The center also noted that 95% of the companies have analyzed employee pay by race and took action to close pay gaps. More than 80% of them have intentional recruiting from diverse talent pools. And half set enterprise-wide goals for hiring, retaining and advancing people of color and are holding company leaders accountable for reaching the goals.

The St. Paul-based nonprofit center was founded in 2017 to strengthen public and private-level civic infrastructures. The index has evolved some from last year, adding seven additional racial equity standards to those measured, said Tawanna Black, the center's chief executive.

The private-sector companies now report on 43 different racial equity standards in areas such as leadership, hiring, culture, retention, procurement and philanthropy.

Goals of the index and follow-up work by the Center for Economic Inclusion are to help companies make diversity, equity and inclusion initiatives and racial equity an ingrained part of a company's infrastructure.

"It's not good enough to have a policy if you don't have accountability," Black said.

The progress is important: In the report, the Center for Economic Inclusion points to multiple studies showing that racial equity and inclusion translates to economic gains.

The center's annual report presents aggregate data from the companies that participated. Black said some of the companies who participated in the report last year are still working through their initial findings.

Urging transparency, the organization encourages participating companies to share the findings of individual company assessments.

"The public wants to know this," Black said.

The Center for Economic Inclusion is planning to build on the Racial Equity Dividends Index by expanding participation to up to 100 companies, Black said.

It also is adding a program this fall for public sector organizations, including city and regional governments and state agencies. It will help them measure and track their progress on racial equity.

The center also has plans to bring the project to six additional cities in the future.