African Americans constitute approximately 13 percent of the U.S. workforce. Since the passage of the Civil Rights Act of 1964, the number of African American officials, managers, technicians, and skilled craftspeople has tripled while the number in clerical positions has quadrupled and the number in professional jobs has doubled.43 However, a significant percentage of African Americans (perhaps as high as 15%) are among the “hardcore” unemployed.

African Americans face two major problems in organizations. First, explicit, intentional racism still exists 50 plus years after the first civil rights victories, even though we now have the first African American president and six of the Fortune 500 CEOs are black, something that not long ago would have almost been considered science fiction.44 The movie The Butler, which came out in 2013, does a great job of illustrating for younger generations how much things have changed in the treatment of African Americans and how difficult the change process has been. African Americans are not the only group to suffer from blatant racism, but it is safe to say that they are the group that suffers the most. The persistence of the Ku Klux Klan and other white supremacy organizations serves as a constant reminder, to both African Americans and U.S. society as a whole, that the struggle for civil rights is not over. This is part of the reason why in 2008 the Florida Legislature formally apologized for the state’s “shameful” history of slavery, joining five other states that have expressed public regret for what President Obama calls America’s “Original sin.”45 Managers need to be careful to reassure their African American employees, and the entire organization, that racist views will not be tolerated in the workplace. Marriott International, for instance, relies on the film 42, about Jackie Robinson breaking major league baseball’s color line, to make this point. Marriott launched a major campaign in 2013 involving Facebook content, special screenings of the movie, and the showing of “42” (Robinson’s number) on hotel rooms and employee lounges.46

The second problem African Americans face as a group is less educational preparation than whites.47 This is not an issue unique to blacks. Both blacks and Hispanics showed approximately half the college graduation rate of whites. Because of the increasing importance of technology and information in the U.S. economy, the discrepancy between the wage rates of college-educated and non–college-educated workers is growing. Therefore, the differential in educational preparation between African Americans (and Hispanic Americans) and whites puts the former at a major disadvantage in the labor market.

There is, however, reason for optimism. An analysis of 291 metropolitan areas indicated that all but 19 were more integrated than in 1990. Whereas in 1972 relatively few whites reported regular interactions with blacks, by 2008 almost two-thirds of whites said they had personal contacts with blacks often or daily.48 Over the past 50 years, the number of black households at or near the poverty line has fallen by almost one-third, controlling for inflation. Approximately 41 percent of blacks are now solid middle class, making between $42,000 and $108,000 a year, with almost 20 percent considered prosperous (earning more than $108,000 more a year).49 These positive figures are tamed by a faster dip in median black family income relative to whites following the deepest recession since World War II and the first such significant decline since the 1940s.50 In 1980, barely one of two blacks over age 25 held a high school diploma. In 2011, nearly four out of five, or just under 80 percent, had a high school diploma; for blacks in the 25–29 age group, it was 86 percent, which was the same as for whites. And in less than 20 years, the number of black college graduates has doubled.51 African Americans’ share of management jobs has increased at least fivefold since 1966.52 For all of these reasons, a 2008 front-page article in the Wall Street Journal concluded that “The growth of the black middle class and integration of the workplace didn’t only reshape the black community, it transformed the attitudes of many whites as well.”53

Americans of Asian descent constitute approximately 5.6 percent of the U.S. workforce. Their representation in the labor force increased by approximately 63 percent from 1990 to 2014 and is projected to double by 2050.54 Just as the term “Hispanics” applies to a range of people, “Asian Americans” include a wide variety of races, ethnic groups, and nationalities (for instance, Japanese, Chinese, Koreans, Indians, and Pakistanis).55 Although Asian Americans have done well in technical fields and are very well represented in institutions of higher education, they are underrepresented in top corporate positions. Employer discrimination probably accounts for this to some extent, because Asian Americans are often stereotyped as being too cautious and reserved to lead.56 They also suffer from the belief held in some quarters that, because of their educational attainments, they are an advantaged group and, therefore, do not deserve special consideration in hiring and promotion decisions. As a result, they are less likely to benefit from programs intended to improve the employment conditions of women and other minorities. Finally, one survey found that 40 percent of African Americans and Hispanic Americans and 27 percent of whites saw Asian Americans as “unscrupulous, crafty, and devious in business.”57 For all these reasons, some Asian Americans are relegated to technical and support positions that require minimal interpersonal interactions and offer limited opportunities for advancement.

John Yang, a vice president at Hewlett-Packard, notes that although Asians are well represented in the high-technology industry, they seldom make it to the upper echelons. Those Asians who are at the top rung of high-tech companies often started their own companies, like Charles Wang, founder and ex-CEO of New York’s Computer Associates.58

Most Asian immigrants to the United States today are from the Philippines, Indonesia, Sri Lanka, and Thailand, with a growing number from mainland China. At least half of these immigrants are women, many of whom end up working for very low wages in high-pressure industries such as the garment business.59 However, we should be cautious of making generalizations. For instance, most Indians who come to the United States are professionals whose average incomes exceed that of native-born Americans.60 One example is that of Indra Krishnamurthy Nooyi, who grew up in Chennai (formerly Madras) on the southeast coast of India and is now CEO of PepsiCo, a quintessential American company. According to one reporter, “As a vegetarian, she is not who you’d think would be leading the maker of sugary soda and salty snacks.”61 Inc. magazine, which focuses on small businesses, has developed a special category listing Indian entrepreneurs who have launched successful companies, many of them in the high-technology sector.

There are approximately 43.5 million people with disabilities in the United States, 15 million of whom are actively employed and 6 million of whom subsist on Social Security payments and disability insurance.62 At least 3.7 million people with severe disabilities are at work.63 The remainder are either unemployed (presumably supported by their families) or under working age. People who are physically disabled face four main problems at work.

First, social acceptance of disabilities has not advanced much since the Dark Ages.64 Many people still view people with disabilities with suspicion, even scorn, feeling that those who are physically impaired should stay away from the work world and let “normal” people assume their duties. At a more subtle level, coworkers may not befriend employees with disabilities because they simply do not know how to relate to them. Even extroverts can suddenly become shy in front of a person with a disability.

Second, people with disabilities are often seen as being less capable than others. This misconception persists even though people who are legally blind and deaf can perform many tasks just as well as those with normal sight and hearing, and modern technology allows many paralyzed people to run computers.

Third, many employers are afraid to hire people with disabilities or put them in responsible positions for fear that they may quit when work pressures mount. This myth persists despite the fact that absenteeism and turnover among such employees are only a fraction of those of other employees. For instance, Marriott International reports that turnover among employees with disabilities is only 8 percent annually, compared to 105 percent for workers in general.65 Pizza Hut has also found a huge difference in turnover rates: 20 percent for employees with disabilities versus more than 200 percent for employees without disabilities.66

Fourth, ever since the passage of the Americans with Disabilities Act in 1990, many employers have overestimated the costs of accommodating employees with disabilities. In fact, employers have found that accommodations are usually simple and cheap, costing on average between $200 and $500 across different firms.67 For instance, Griener Engineering, Inc., in Irving, Texas, installed a lighter-weight door on the women’s restroom and raised a drafting table by putting bricks under its legs.

The U.S. Supreme Court has established a clear distinction between a physical impairment and a disability under the Americans with Disabilities Act (ADA). For example, Ella Williams, an assembly-line worker at a Toyota plant, was unable to work with power tools after she developed crippling pain in her wrists, neck, and shoulders from repetitive motions. The Sixth Circuit Court of Appeals in Cincinnati said her injury was akin to having “damaged or deformed limbs,” and it ruled Toyota should have accommodated her by giving her work as an inspector. Toyota appealed the decision to the U.S. Supreme Court. Citing the so-called “toothbrush test,” the Supreme Court ruled that to be disabled a worker must have difficulties in doing everyday tasks. According to Justice O’Connor, “Even after [Williams’s] condition worsened, she could still brush her teeth, wash her face, bathe, tend her flower garden, fix breakfast, do laundry and pick up around the house.” This suggests that Williams did not have a true disability but rather a physical impairment. Thus, she was not entitled to the antidiscrimination protection of ADA.68

The Americans with Disabilities Act, passed almost 25 years ago, has succeeded in opening access to buildings and providing legal protection, yet significant employment barriers remain. A recent U.S. Bureau of Labor Statistics report covering the recent 2008–2011 recession reveals that, at any one point during the recession, the percentage of disabled people actively looking for work but unable to find employment was almost 70 percent higher than for their nondisabled counterparts.69

Approximately 14 percent of the U.S. population is foreign born, although in some areas, such as California, southern Texas, southern Florida, and in New York City, the proportion reaches close to one-third of the population.70 Reliable statistics are hard to find, because of illegal immigration and census undercounts (fearing legal reprisal, many undocumented workers wish to remain incognito), but at least 30 million immigrants have come to the United States over the past 30 years.71 U.S. Census Bureau data estimates the number of non-naturalized immigrants, both legal and illegal, currently living in the United States at 21.8 million.72 In addition, half a million foreign students on temporary visas are attending U.S. universities at any one time, spending about $11 billion a year on tuition and living expenses.73 Many of these people remain in the United States after obtaining their degrees. Although the rate of illegal immigrants seemed to have slowed down considerably during the recent recession, the Pew Research Center estimates that if current trends continue, 19 percent of the U.S. population will be foreign born by 2050.74

Regardless of their parents’ legal status, all children born in the United States are automatically U.S. citizens under the U.S. Constitution. However, American children of undocumented immigrants face an uncertain future.75 As noted by one analyst, “As the government steps up its enforcement of immigration laws, the fate of American children is often an afterthought.”76 As of 2014, there are probably about 12 million undocumented immigrants in the United States, compared with 8.4 million in 2000 and 3.5 million in 1990. Mexicans account for about 57 percent of undocumented immigrants, with an additional 24 percent coming from elsewhere in Latin America.77 A high proportion of these undocumented workers are of childbearing age and they have four children on average (in comparison to two for the rest of the population). This means that a growing percentage of young Americans are raised by parents with few legal rights and who could be subject to immediate deportation. Another major issue that remains unresolved is the legal status of people who came to the United States as children (through no fault of their own) and think of themselves as Americans. President Obama launched a controversial executive order preventing deportation of this group, but nevertheless at the time of this writing they remain in a legal limbo, and some states (such as Arizona) will not issue state-sanctioned IDs to them.

Partly because of security concerns after 9/11 and partly because of a growing belief that our “borders are out of control,” public policy has tended toward tightening immigration laws, making it more difficult, for instance, for illegal aliens to obtain a driver’s license or even temporary jobs. In one of the largest public-works projects in history, the United States is erecting miles of new fences along much of the Mexican border. Despite these restrictions, it appears that undocumented workers (those who, by definition, cannot achieve legal status) will continue to enter the United States as long as there is demand for their services. In the past, obtaining a “green card” (legal permanent residency) has been an arduous process, and for unskilled workers, a nearly impossible dream.

As of 2014, federal immigration policy is in disarray, and states and local jurisdictions are rushing to fill in the gap. Since the last edition of this book , state legislatures have passed several hundred pieces of immigration legislation. In Arizona, for instance, an employer can lose its license if it knowingly hires an illegal alien.78 In 2010, Arizona also approved a highly controversial law (being fought in court at the time of this writing) defining all undocumented aliens in the state as “criminals.” In Connecticut City (which boasts a population that is 34% foreign born), the Common Council requires local police to work with U.S. Immigration and Customs Enforcement in rounding up workers who are in the country illegally. On the opposite side, a handful of states (such as Illinois, New Jersey, Massachusetts, and Washington) have passed humanitarian legislation that makes integration of immigrants a priority, focusing on language, job, and citizenship training, as well as access to services such as health care and public safety.79 Likewise California (which hosts at least 3.5 million undocumented people within its borders) recently enacted legislation allowing all residents regardless of immigration status to be jurors and to qualify for state-issued driver licenses. Because many employers find it difficult to do business without access to an immigrant labor force (particularly in agriculture, the hospitality industry, the food and beverage industry, and construction) this confusing situation is creating hardships for firms and foreign workers alike.

Although Americans tend to see immigration as a problem limited to the United States, it has become a major issue in a globalized economy, where approximately 200 million people work outside the country where they were born, with a high percentage living in a legal limbo . In many Western European countries, for instance, which until a few decades ago were largely homogeneous, the proportion of foreign-born residents exceeds 10 percent of the population. Moroccans alone amount to 4,000,000 of those foreign-born residents. A similar situation can be found in Asia (for instance, in Taiwan); in the Middle East (for instance, in Saudi Arabia); in Africa (where, for example, 2 million Indians live); and in Latin America (for instance, in the Dominican Republic where 1 million Haitians live).80 Recently, the civil war in Syria has provoked the exodus of millions of people into neighboring countries.

Controversial actions by foreign governments in response to immigration pressures are becoming more common. For instance, France has deported hundreds of Romanian Gypsies back to Romania, even though Romania is part of the European Union (EU) and, legally, all citizens of EU member states presumably have the right to settle anywhere they choose within the 27-country EU territory.

The United States has always depended on skilled immigrants to staff science and engineering jobs. In fact, foreigners now account for about 40 percent of all science and engineering PhD holders working in the United States, and more than 50 percent in math and computer fields. In several business fields, 30 percent or more of faculty and doctoral students are foreign born. Fifty-two percent of Silicon Valley startups had immigrant founders. Much of the space program, including the trips to the moon, would not have been possible without teams of German scientists who immigrated to the United States after World War II. For a complex set of reasons, including visa restrictions in the United States, multiyear delays in processing visa applications, and attractive opportunities in other countries (such as Germany, China, India, Korea, and Brazil), a substantial number of highly skilled immigrants are going elsewhere. Unless this trend is reversed, this is likely to create a talent vacuum for the United States in the upcoming decades.

Although early research dating from the 1940s suggested that about 10 percent of the population is gay, there is considerable debate about the true percentage, with estimates ranging from 1 to 2 percent to 10 percent.81 In recent years, gay advocacy groups have become very outspoken about their rights, arguing that sexual preference should not be a criterion for personnel-related decisions. But open homosexuality is still taboo in many workplaces.

Federal legislation in the United States offers little legal protection based on sexual orientation at present. Although no federal law prevents overt discrimination against homosexuals, a growing number of states and local jurisdictions have such antidiscrimination laws on their books. An interesting phenomenon is the voluntary decision on the part of a growing number of organizations to embrace employees that do not have a heterosexual orientation (often referred to as lesbian, gay, bisexual and transgender employees, or LGBT). A large number of blue-chip firms and public institutions sponsor gay/lesbian groups in their workforce (including American Express, Deloitte LLP, Prudential, Novartis, General Motors, and Xerox); provide benefits to “domestic partners” (such as Arizona State University, Wachovia Bank, Monsanto, and Microsoft); or do both (such as Microsoft and Monsanto).82 Even some mainstream religious denominations and organizations, such as the Episcopal Church and the Jewish Theological Seminary, are now accepting openly gay individuals to the ministry and into the seminary.83 The same is true for the British military. The U.S. military has also abolished the “don’t ask, don’t tell policy” that was put in place during the Clinton administration. The IRS now allows homosexual couples to file joint tax returns even if their state does not allow gay marriage. Several predominantly Catholic countries (such as Spain, Mexico, and Argentina) now allow weddings for people of the same gender, giving them the identical legal rights, including the same access to fringe benefits, as heterosexual couples. When the first edition of this book was published in the mid-1990s, much of this would have been unthinkable. The Manager’s Notebook, “Employee Inclusiveness and Sexual Orientation,” addresses this dramatic change.

People from Latin America have traditionally used cultural self-definition to distinguish their cultural identity from that of non-Latino North Americans. The label Hispanic, the official name used by the U.S. government, is “essentially a label used by administrative agencies and researchers.”84

Latinos include people of European descent (there are at least 70 million of them in Latin America) and people of African descent (there are at least 25 million living in the Spanish-speaking Antilles and the Caribbean basin), as well as Latin Indians (who make up a very large proportion of the Mexican and Andean population); Asians (there are probably 10 million Asians of Hispanic descent); and a very large number of people of mixed origin. In fact, over half of Latinos identified themselves as “white” when it came to race in the 2010 Census (which allowed for two separate choices, one on ethnic status and one on race), probably reflecting the fact that in most countries south of the border racial lines are blurred.85

There are at least 50 million Latinos in the United States, with some estimates as high as 60 million.86 The boom in the Hispanic population, 60 percent of which is native born, continues to be the driving force in U.S. demographics.87 Latino immigrants have birth rates twice as high as those of the rest of the U.S. population. The United States is now the largest Spanish-speaking country in the world except for Mexico.88 Between now and 2030, Latinos are expected to account for about half of the growth of the U.S. workforce.89 Many Latinos are professionals and entrepreneurs; others are unskilled laborers and farmers. At the high end of the scale are upper- and middle-class Cubans who came to the United States in the aftermath of the 1959 Cuban Revolution; on the low end are migrant workers.90

Latinos face a number of problems in the U.S. workplace. One is language.91 Second, cultural clashes may occur because of value differences. Some Latinos see non-Latino North Americans as unemotional, insensitive, self-centered, rigid, and ambitious. Meanwhile, non-Latinos often complain that with Latinos “Scheduling, planning, punctuality and attendance might be less rigid than among other employees.”92

Third, Latinos of African or Latin American Indian descent (many of whom migrate to the United States because of their extreme poverty at home) often face an additional hurdle: racial discrimination because of their skin color. Latinos in the United States have become the target in recent years of anti-immigrant feelings, which are often fueled by politicians who see this as an issue that can win votes for them.

These challenges do not negate the noteworthy progress that Latinos have made in recent years. The largest 500 Latino-owned firms in the United States export more than $1 billion worth of goods each year, generating many U.S. jobs in the process.93 Almost a quarter of the Fortune 1000 firms have some Latino senior executives, with 70 serving as executive officers and seven who are now CEOs of Fortune 500 firms. Latinos occupy approximately 200 board seats in these companies, double the 1993 number. Hispanic middle-class households (those earning $40,000 to $140,000 annually) have grown 74 percent during the past 23 years, with 15 percent of Latino families reporting incomes of more than $75,000. Total Hispanic purchasing power now exceeds $500 billion. The proportion of college graduates is now over 20 percent, an increase of 45 percent over two decades.94 There are in excess of 1.5 million Hispanic-owned businesses, and they are forming at a rate three times faster than the U.S. national average.95

To quell the fears of those who believe Latinos do not assimilate as well as prior European immigrants assimilated, the evidence shows that the first generation is mostly bilingual and English becomes dominant in the second generation.96 For this reason, marketers are now starting to focus their attention on the second generation. For instance, Microsoft’s MSN Latino, a Spanish-language Web site with about 11 million monthly visitors, now offers marketers an ad service in English that targets second-generation Hispanics.97 Furthermore, most Latinos do not live in densely packed, highly homogeneous, Spanish-language communities. Rather, most live in neighborhoods with non-Hispanic majorities.98 Contrary to stereotypes of lack of assimilation, a high proportion of Hispanics marry and establish families with spouses of a different ethnic group, particularly starting in the second generation. As has always been the case throughout history, cultural elements tend to blend, with the dominant culture absorbing what originally was viewed as “foreign.” For instance, Mexican restaurants are now common in most neighborhoods and Mexican dishes (with an Americanized twist, sometimes called Tex-Mex) are now part of the American diet. And by the second generation, English rather than Spanish often becomes the main language spoken at home.

The U.S. workforce is getting older. The average U.S. worker is close to age 39 and is expected to reach close to 43 by the year 2020. Forty-seven percent of employees are currently over the age of 40. This is not unique to the United States; in fact, this trend is more pronounced in other developed countries. For instance, in the European Union, close to 40 percent of employees are now over the age of 50.99 Older workers face several important challenges in the workplace. First, the United States is a youth-oriented culture that has not yet come to terms with its changing demographics.100 Starting around the age of 40, but particularly after the age of 50, employees encounter a number of stereotypes that may block their career advancement. Partly because of this, the number of age bias claims against private sector employers filed with the Equal Employment Opportunity Commission increased dramatically in recent years.101 In 2005, the U.S. Supreme Court opened a new door for older workers to sue for age discrimination. The Court ruled that workers over 40 years old could bring charges when the firm’s action has a “disparate negative impact” on their age group; they do not have to meet the tougher standard of proving that the employer actually intended to discriminate.102 Apart from legal considerations, one of the growing ethical issues in human resource management is the extent to which older workers have become easy targets for efforts to reduce salary and health insurance costs.

The economic crisis during 2008–2011, tepid economic growth in subsequent years, and the aging of the baby boom generation (most of whom do not have enough saved for comfortable retirement) have pushed age to the forefront of diversity issues. Most retirement plans are linked to the fortunes of the stock market and few firms now offer a guaranteed monthly payment when an employee reaches retirement age. High rates of divorce and remarriage mean that more and more people start new families in middle age. Because of all of these factors, millions of older workers have changed their minds about quitting their jobs, and some who had already retired decided to reenter the labor market.

To take advantage of this experienced labor pool, a group of employers, including Home Depot, Principal Financial Group, and MetLife, created the National Employer Team, together with the AARP (a national association for people over 50), to endorse “older worker friendly policies.” AARP members can access open positions at the companies through the association’s Web site.103 In other words, age is becoming one of the main concerns in human resources when it comes to diversity and inclusiveness (see Manager’s Notebook, “The Rise of the Older Worker”) .

At the same time, the so-called “generation gap” is creating a challenge for many firms.104 Citing research at companies such as IBM and Lockheed Martin Corp., one observer notes that “companies worldwide are grappling with generational differences in their workforces. Managers and consultants say they see new workplace problems arising from differing mindsets and communication styles of workers born in different eras. The frictions are aggravated by new technology and work patterns that mix workers of different ages in ever-changing teams.”105 A 2008 survey by the World at Work Association showed that one-third of companies responding now have “generational initiatives” in place to promote better interaction “among the four different generations currently in the workplace.”106

Among the most common negative assumptions about older workers are that they are less motivated to work hard, that they are “dead wood,” that they are resistant to change and cannot learn new methods, and that they are “fire proof.”107 These negative characterizations are not supported by research. Some recent research shows that the absenteeism rate for those 55 and over (4.2 days per year) was almost identical to the absenteeism rate of other age groups (3.9 per year).108 Recent studies also show that older workers are just as committed to their jobs as younger workers.109 Many successful companies have implemented programs to use the knowledge and wisdom of older workers to mentor employees. That way they can leverage senior workers as knowledge champions.110

Although the Jewish population as a percentage of the total population has remained relatively stable in both the United States and Europe, other non-Christian minorities have grown rapidly. In the United States, approximately 4 million Americans profess Islamic, Hindu, Taoist, or other non-Christian beliefs. In Western Europe, the Muslim population represents the largest minority group, hovering somewhere between 6 and 15 percent of the population in such countries as France, Holland, Spain, Germany, and the United Kingdom .

The tragic events of September 11, 2001, in New York City and Washington, D.C.; the bombings in Boston, Madrid, and London; and multiple other actual or alleged terrorist incidents in the United States and Europe have severely tested tolerance toward people of certain religious backgrounds. The fact that some well-publicized terrorist acts have been carried out by Western-born religious extremists (such as the 2013 attack on a shopping mall in Kenya) adds to this problem. A survey by the Society for Human Resource Management revealed that so-called “ethnic religions” such as Islam now come just after race and gender in U.S. perceptions of “otherness.”111 A 2010 survey conducted by Time magazine in the United States revealed that, while only 37 percent of Americans know a Muslim American, 46 percent believe that Islam is more likely than other faiths to encourage violence.112 In Europe, with a much higher Muslim representation and a short history of immigration, blaming Arab minorities for crime, unemployment, and government budget deficits has become commonplace.113 In Europe, for example, it is not unusual even for mainstream politicians to use language to refer to religious minorities that in the United States probably would be considered as hateful. Rising intolerance is likely to fuel discrimination in the workplace (see the Manager’s Notebook, “Religious Differences Moving to the Forefront of Inclusiveness”).

Some of this tension has exploded into violence, as in various cities in France and southern Spain. Turkey, which is overwhelmingly Muslim but officially secular, experienced a number of skirmishes during 2010–2014 on the issue of whether women are allowed Islamic head scarves in Turkey’s universities.114 And in 2008, the Vatican publicly condemned physical attacks against religious minorities in Italy, in particular Muslims. On this side of the Atlantic, two issues of Muslim practice—whether the call to prayer should ring out across Harvard Yard and whether the university should grant women separate gym hours—have unleashed small waves of controversy over how Harvard practices tolerance.115

Some of this tension may also be found within the Islamic community itself as it tries to adapt to Western society. For instance, there are now more than 200 Muslim student association chapters on U.S. college campuses. One expert notes, “Gender issues, specifically the extent to which men and women should mingle, are the most fraught topic as Muslim students wrestle with the yawning gap between American college traditions and those of Islam.”116

Unfortunately, as noted by Helen Sanhan, executive director of the Arab-American Institute Foundation, “often the Arab community is negatively displayed in the media.”117 Security fears due to terrorist threats in the United States and Europe have led to many complaints of “racial profiling” and discrimination lodged by people of Arab descent, as well as those who may be mistaken for Muslims, such as some people of East Indian background. Many firms on both sides of the Atlantic are now grappling with policies to cover such issues as permissible garments at work, religious holidays, potential harassment or ridicule based on one’s faith, and the display of religious symbols on company premises.118 The bombing of the Boston Marathon in 2013 by two white Chechen Islamists who had become naturalized American citizens brought the point home that stereotypes based on physical appearances can be misleading.

The projected participation rate for women in the workforce is expected to be about equal that of males.119 Unfortunately, women’s earnings have not mirrored their rising participation trend. After falling to a low of 59 percent of male earnings in 1975, the female-to-male earnings ratio rose slowly and is now approximately 73 percent, just 10 points above its level in 1920, when only 20 percent of women were in the labor force.120 Over three-quarters of people who earn over $120,000 a year are men.121

There may be reason for optimism, however . Women’s share of top-management jobs has increased at least threefold during the last three decades.122 In the past edition of this book, 13 women were CEOs of Fortune 500 firms; at the time of this writing (2014) there are 21. These include some of the most important companies in the world such as Margaret Whitman at Hewlett Packard, Virginia Rometty at IBM, Indra Nooyi at PepsiCo, Marilyn Hewson at Lockheed, Phebe Novakovic at General Dynamics, and Ursula Burns at Xerox.123 And 55 percent of employed women bring in half or more of their total household income,124 a trend that has accelerated during the hard economic times of 2008–2012 because many men have lost highly paid jobs in the manufacturing and construction sectors.

Approximately 52 percent of women now hold managerial positions, up from about 12 percent in the early 1970s.125 Outside the corporate arena, we now have many powerful female role models who were almost totally absent a generation ago. These include, for instance, Oprah Winfrey (one of the richest persons in the world and a very successful entrepreneur), House Speaker Nancy Pelosi, former Secretary of State Hillary Clinton, German Chancellor Angela Merkel, and Janet Yellen, Chair of the Board of Governors of the U.S. Federal Reserve System.126 In some countries, such as Spain, Norway, and Finland, the cabinet has more women than men,127 and in the United States it has gone from zero in the 1960s to almost a fourth in recent years. Even in South Korea, which did not ban gender discrimination until 2000, many senior positions in the judiciary, international trade administration, and startups are now held by women.128

Still, there is no doubt that most women continue to earn considerably less than their male counterparts, and that 50 years after the women’s liberation movement started in the 1960s, males still occupy more than 90 percent of positions on boards of directors, on top management teams, in CEO roles, and other key places in Fortune 1000 firms, even though the gap in educational achievement by gender has largely disappeared. Accordingly, a 2010 large-scale survey of 1,834 business professionals by consulting firm Bain and Co. reveals a huge gap in perceptions as to who has more opportunities in business: men or women. Eighty-one percent of men said that there is no discrimination by gender when it comes to promotions to managerial ranks, compared to 52 percent of women. Similarly, 66 percent of men said that, given equal backgrounds and performance levels, women have an equal chance to be promoted to the top executive levels, versus 30 percent of women.129 Other than overt sex discrimination (which is, of course, illegal), several factors may account for the earnings differential between women and men and women’s lack of upward mobility. These include biological constraints and social roles, a male-dominated corporate culture, exclusionary networks, and sexual harassment.

Exclusionary Networks

Many women are hindered by lack of access to the old boys’ network , the informal relationships formed between male managers and executives. Because most high-level positions are filled by men, women are often left out of the conversations that help men get ahead.135