The Diverse States of America — and American Business

In an increasingly diverse country, the data demonstrates the impact of diversity in our lives and in our workplaces. The companies that best embrace and leverage, rather than resist, diversity will be the real winners in the years to come.

“Strength lies in differences, not in similarities.”

— Stephen R. Covey

Introduction

Let’s talk diversity. I know! I know! If the truth be told, many folks would rather not! In fact, diversity training is typically one of the most dreaded of corporate training programs. Likewise, in college courses, many times, the diversity chapter is scheduled for the last week of classes — meaning that for many semesters, it just won’t get covered. No, diversity training/education and fun rarely go together. However, diversity is a vital subject to cover and discuss everywhere today, as America is undoubtedly and unfailingly becoming a much more diverse country each and every year. And if you are engaged in any way in business today (and almost all of us are), you need — really need — to be engaged with diversity!

The Data on Diversity

The data on all of this is quite clear. According to the nonpartisan group USA Facts, who put together their recent report, “How Has the Population Changed in the US?” based on data from the Census Bureau, there is a quite marked racial shift occurring in the United States today. Consider the difference a little over a decade makes in the demographic makeup of the country. Figure 1 (USA Facts: Racial Makeup of the US, 2010 vs. 2022) shows the profound shifts taking place in America today. Indeed, while whites still constitute the majority of the American population, the share of the U.S. population that identified as white (non-Hispanic) fell from 63.8% in 2010 to 58.9% in 2022, a decline of 4.9% over this decade plus. In fact, this was the largest aggregate and percentage decrease of any ethnic group over this time frame. At the same time, the Hispanic/Latino population increased the fastest, rising by 2.7 percentage points, from 16.4% in 2010 to 19.1% in 2022. Over this twelve-year period, the Asian (non-Hispanic) portion of the U.S. population rose from 4.8% to 6.1%, and likewise, the black (non-Hispanic) population also grew from 12.3% to 12.6%. At the same time, those who identify as being multiracial rose from 1.8% of the American population in 2010 to 2.4% in 2022! So, in the aggregate, ethnic minority populations are rising, concomitant with the decline in the majority white, non-Hispanic population.

Figure 1 — USA Facts: Racial Makeup of the US, 2010 vs. 2022

Source: USA Facts, “How Has the Population Changed in the US?,” January 2024 (Used with permission).

As you can see, though, in Figure 2 (USA Facts: Population by Race and Ethnicity in the US, 2022), the white, non-Hispanic population of the United States is still predominant, with 58.9% of the aggregate population. This is less, though, than ever before in our nation’s history! In terms of the country’s population as a whole, as of 2022, there were:

White (non-Hispanic): 196,225,966 (58.9% of total)
Hispanic/Latino: 63,664,346 (19.1% of total)
Black (non-Hispanic): 42,070,471 (12.6% of total)
Asian (non-Hispanic): 20,276,025 (6.1% of total)
Multiracial (non-Hispanic): 7,993,849 (2.4% of total)
American Indian/Alaska Native (non-Hispanic): 2,420,972 (.7% of total)
Native Hawaiian and Other Pacific Islander (non-Hispanic): 635,928 (.2% of total).

Figure 2: USA Facts: Population by Race and Ethnicity in the US, 2022

Source: USA Facts, “How Has the Population Changed in the US?,” January 2024 (Used with permission).

The Diversity Index

How often do we encounter diversity today? The Census Bureau has a very way of quanitying the impact of diversity with its Diversity Index. This is a very simple, but very powerful measure. In short, according to the Census Bureau’s definition of the Diversity Index (DI):

“It is the chance that two people chosen at random will be from different race and ethnicity groups. A value of 0% indicates that everyone in the population has the same racial and ethnic characteristics. A value close to 100& indicates that almost everyone in the population has different racial and ethnic characteristics.”

The diversity index — representing the chance of encountering a race or ethnic group other than your own in any given interaction between two individuals in a given population — holds that “a value closer to 0% means that a population is more homogenous, while 100% means that a population has more racial diversity.”

The diversity index in the U.S. as of 2020 stood at 61.1%. This represented an increase of 6.2% — more than 10% — from a decade earlier, as in 2010, the diversity index was 54.9%! As you can see below in Figure 3 (Racial Diversity Across America, as Represented by the Diversity Index), the data journalists at Visual Capitalist put together a very informative chart showing the Diversity Index across the United States, displaying the score for each state and the District of Columbia for 2020 (this does exclude Puerto Rico and other U.S. territories). As you can see, Hawaii was the most heterogeneous state, with a Diversity Index of 76%, while the most homogeneous state was Maine, with a Diversity Index of 18.5%.

Figure 3: Racial Diversity Across America, as Represented by the Diversity Index

Source: Marcus Lu, “Mapped: Racial Diversity by U.S. State,” Visual Capitalist, January 2024, (Used by permission)

The Diversity Index in each state (and the District of Columbia) is presented below in Table 1 (States Ranked by Their Diversity Index Score, 2020), with the states ranked from the most to least diverse. As you can see, Hawaii (76%), California (69.7%), and Nevada (68.8%) are the states that

Table 1: States Ranked by Their Diversity Index Score, 2020

Hawaii (76.0%)
California (69.7%)
Nevada (68.8%)
Maryland (67.3%)
Washington, D.C. (67.2%)
Texas (67.0%)
New Jersey (65.8%)
New York (65.8%)
Georgia (64.1%)
Florida (64.1%)
New Mexico (63.0%)
Alaska (62.8%)
Arizona (61.5%)
Virginia (60.5%)
Illinois (60.3%)
Delaware (59.6%)
Oklahoma (59.5%)
Louisiana (58.6%)
North Carolina (57.9%)
Washington (55.9%)
Mississippi (55.9%)
Connecticut (55.7%)
South Carolina (54.6%)
Alabama (53.1%)
Colorado (52.3%)
Massachusetts (51.6%)
Arkansas (49.8%)
Rhode Island (49.4%)
Tennessee (46.6%)
Oregon (46.1%)
Kansas (45.4%)
Michigan (45.2%)
Pennsylvania (44%)
Indiana (41.3%)
Nebraska (40.8%)
Missouri (40.8%)
Utah (40.7%)
Minnesota (40.5%)
Ohio (40.4%)
Wisconsin (37%)
Idaho (35.9%)
South Dakota (35.6%)
Kentucky (32.8%)
North Dakota (32.6%)
Wyoming (32.4%)
Iowa (30.8%)
Montana (30.1%)
New Hampshire (23.6%)
Vermont (20.2%)
West Virginia (20.2%)
Maine (18.5%)

Source Data: US Census Bureau, “Racial and Ethnic Diversity in the United States: 2010 Census and 2020 Census,” August 2021

when two people meet, there is the highest likelihood that one of them will be a member of a racial or ethnic minority group. On the other hand, New Hampshire (23.6%), Vermont and West Virginia (tied at 20.2%), and Maine (18.5%) are the states where there is the least likelihood that people encountering one another are likely to be meeting a person from a racial or ethnic minority group.

Overall, the dramatic shift that is occurring today in the racial makeup of the United States can be best captured in the graphic below. As you can see in Figure 4 (Diversity Index for U.S. States, 2010 vs. 2020), the United States as a whole is becoming more diverse, with large states like Texas and New York rising significantly in their Diversity Index scores (enough to jump categories!). At the same time, no U.S. state has become less diverse over the most recent 10-year census period.

Figure 4: Diversity Index for U.S. States, 2010 vs. 2020

Source: US Census Bureau, “Racial and Ethnic Diversity in the United States: 2010 Census and 2020 Census,” August 2021 (Used with permission)

“A diverse mix of voices leads to better discussions, decisions, and outcomes for everyone.”

— Sundar Pichai, CEO of Google and Alphabet

Analysis and Discussion

So, in sum, the numbers are clear. Diversity is happening. The United States is demographically shifting — in real-time! This is, no doubt, causing growing pains across our society, as with progress inevitably comes disruption and controversy — along with emotional reactions, from pride and hope to fear and anger. While there is much, much to be said about the impact of the growing diversity of America and how that impacts the politics, economics, and social fabric of the United States, I will leave that to others to make their informed commentaries. I am a strategic management professor and business consultant by trade, and so I will speak to the business implications of all of this demographic change.

In brief, diversity pays! Study, after study, after study, after study on the impact of diversity in business shows that, to summarize the results with a twist on the famous speech delivered by Micheal Douglas as Gordon Gekko from the classic 1987 movie, “Wall Street:”

“Diversity, for lack of a better word, is good! Diversity is right. Diversity works.”

Today, embracing diversity can be a controversial approach for companies, as some have gotten caught up in the controversy surrounding DEI (Diversity, Equity, and Inclusion) efforts. However, the evidence is plain and clear — diversity is just smart business today! And in reality, being on the right side of not just history — and the marketplace — is the only real strategy for businesses today, no matter how large or small a firm is, no matter what their line of business, and no matter what their present customer mix, their employee mix, and their supplier mix look like demographically at present. Companies that look more like America will be able to sell more to America, attract better and brighter talent to come and work for them, and in the end, be better positioned to grow — and yes, make money!

That basically summarizes the past 20–30 years of hard-nosed, results-based academic research in the area of corporate diversity. And with the demographic shift that will indeed take place over the ensuing decades, the smart business people are betting that a more diverse America will indeed be a better America — and an America in which we will all be enriched not just by racial and ethnic diversity, but diversity across all aspects of our existence, as we become a more diverse population based on any number of factors, including our ages, our gender, our spirituality, our economic status, and our social outlook. The companies that best innovate to serve a far more diverse American population — and thus be best positioned to attract customers, clients, and, yes, talent in the America of tomorrow — will win in the long term!

Finally, as we know, in today’s age of instant and unfiltered communications, there are those who are virulently fighting against the rising tide of diversity. Therefore, in closing, I feel that it must be said that I do hope that none of them will scrape and twist what is presented here in this article to try and bolster their arguments for things like White Nationalism and the notion of the Great Replacement, though I do fear that one could well take the graphics that I have presented here that are based on census numbers (i.e. facts) and twist them to help fashion their arguments. I would ask that if you see my article cited or my graphical case used by anyone espousing a hateful position on racial and ethnic diversity, you will know that I in no way endorse any such advocacy and do not condone it.

About David Wyld

David C. Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld. You can subscribe to his Medium article feed at https://davidwyld.medium.com/subscribe.

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