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Illustration: Eniola Odetunde/Axios

As problematic as the tech industry's diversity statistics are, activists say the focus on those numbers overlooks a more fundamental problem — one less about numbers than about power.

What they're saying: In tech, they argue, decision-making power remains largely concentrated in the hands of white men. The result is an industry whose products and working conditions belie the industry rhetoric about changing the world for the better.

Why it matters: In this view, unless the tech industry finds a way to reform its power discrepancies, its fundamental inequalities won't change, even if the industry manages to improve its poor track record on diversity.

  • Too often, experts say, workers from underrepresented groups, regardless of their numbers, aren't in positions to effect real change at tech companies and face enormous structural barriers in trying to rise to the upper ranks.

It's not enough to just "have the right people in the room," says Color of Change head Rashad Robinson. A "rainbow oligarchy" is still an oligarchy, he adds.

  • "If we end up with diversity for diversity's sake, that doesn't actually change the nuances, the structures, the contours, and in particular, the rules," Robinson said in a recent panel I moderated.

Between the lines: The power dynamics play out in a variety of different ways, from questions over worker pay and promotions to problems with products that exacerbate inequality or lead to harassment.

On the pay front, there have been a slew of complaints by women and people of color that they were paid less or denied promotions offered to white male counterparts.

  • "That's generational wealth we are essentially being cheated out of," says Ifeoma Ozoma, who left Pinterest earlier this year and settled claims she was underpaid for her work.

The industry's power imbalance also contributes to failures involving products and services that end up marginalizing non-white users or promoting hate speech.

  • Even when there are one or two people from underrepresented groups in the room, they often lack the authority to have an impact.

"Representation is not enough and is easily tokenized," says Aerica Shimizu Banks, who also left Pinterest earlier this year, claiming discrimination. "It’s not like you have the presence of one person from a different background or gender and you have equality. They must have the ability to meaningfully make an impact and contribute."

Of note: To win power, of course, people of color and other underrepresented groups first need to get inside the companies — and right now most of the industry has failed to improve its poor record.

  • Despite bold pronouncements, sometimes accompanied by large investments, the major tech companies have barely made a dent in the underrepresentation of Blacks and Latino employees.
  • Ozoma said the tech industry isn't alone in these problems, but deserves added scrutiny both because of the influence its products have on society and because the industry holds itself up as a meritocracy.

Two companies' recent records illustrate the depth of the industry's troubles.

At Pinterest, racial issues came to the forefront after Ozoma and Shimizu Banks left the company in May.

  • Then, former COO Francoise Brougher said in an August blog post that she was forced out of her job for calling out the "rampant discrimination, hostile work environment, and misogyny that permeates Pinterest." An employee walkout followed.
  • This week, a shareholder class-action suit was filed, alleging that Pinterest had created a toxic environment, hurting the company's reputation and causing financial harm.

At Coinbase, Black employees, after leveling a number of complaints about the cryptocurrency company in recent years, have left in droves, according to a New York Times story.

  • Coinbase is the same company that earlier this year announced it would shun politics as much as it could by avoiding taking stands on issues and by discouraging political talk at the office.
  • That move came after Black employees criticized CEO Brian Armstrong for not speaking out publicly about the Black Lives Matter movement.
  • It's also worth noting that Armstrong is still speaking out on issues important to him and the business, such as how cryptocurrencies are regulated. "What he did was incredibly political — it was just his politics," Ozoma notes.

The problems at Pinterest and Coinbase are just examples of a broader industry-wide failure.

  • Many of the largest names in tech have faced allegations of harassment and discrimination as well in recent years.
  • "You could go to any company in Silicon Valley and find this," Shimizu Banks said.
  • Often these conflicts are settled in ways that hide them from public view — although, in a measure of progress, some large companies have stopped making employees sign non-disclosure agreements in such cases.

Go deeper

Updated Jan 12, 2021 - Technology

A tale of two Jacks

Photo illustration: Sarah Grillo/Axios. Photos: Costfoto (Barcroft Media), Phillip Faraone/Getty Images

In China, President Xi Jinping has silenced Alibaba founder Jack Ma and launched an antitrust investigation into his company after the e-commerce tycoon publicly criticized state regulators. In the U.S., Twitter CEO Jack Dorsey has suspended President Donald Trump's accounts after the president used the platform to incite violence.

The big picture: The juxtaposition of two almost perfectly inverse situations reveals how differently China and the U.S. have approached the management of tech giants and digital information.

Updated Jan 13, 2021 - Axios Events

Watch: Recovery and resilience after COVID-19

On Wednesday, January 13, Axios' Dan Primack and Dion Rabouin hosted a conversation on the future of equitable economic recovery, featuring Rep. Ro Khanna (D-Calif.) and chef and World Central Kitchen founder José Andrés. They unpacked the pandemic's impact on small businesses and minority communities and spotlighting efforts to create an inclusive economy.

José Andrés discussed the impact of the pandemic on the hospitality and food industry, stressing the survival of restaurants as a critical part of the U.S. economic recovery.

  • On the food industry's need for federal support: "Restaurants will open again, and the issue is: how many are we going to lose from today until the next three, six months, or one year until everything goes back to normal? We have to make sure that the federal government is behind those businesses that are badly affected by this pandemic."
  • On ensuring living wages for workers: "We need to make sure that ... the food industry is not an industry that lives on the fringe of almost poverty, but that every American employee, every restaurant worker will make a decent living."

Rep. Ro Khanna unpacked the pandemic's impact on rural and minority communities and outlined a strategy for the Federal Reserve Board to better target their efforts.

  • On having the Fed scrutinize how they've been lending: "[We need] to make sure that lending isn't concentrated just to financial institutions and large corporations, that they're using their regional banks to be regional economic development banks considering rural and minority communities."
  • On taking a long-term approach to economic recovery: "We need to infuse [the Small Business Administration] with loans. I would do $10 trillion over 10 years to have 200,000 more loans to small businesses across America."

Axios co-founder and CEO Jim VandeHei hosted a View from the Top segment with Mastercard's strategic growth Vice Chairman and President Michael Froman who discussed the role of the private sector in times of crisis.

  • "The private sector can do a lot. And by this I mean not just philanthropy or corporate social responsibility or ESG efforts. As important as all of those are, the key is really getting companies to look at their products and services, technology and expertise and explore what they can do to have a positive social impact on a commercially sustainable basis."

Thank you Mastercard for sponsoring this event.

José Andrés: Restaurant industry survival is key for economic recovery

Photo: Axios screenshot

José Andrés, the founder of World Central Kitchen and celebrated chef, said during an Axios event that survival of restaurants is a crucial part of the U.S. economic recovery as the coronavirus pandemic continues to ravage the industry.

Why it matters: The hospitality industry has faced an existential crisis since the beginning of the pandemic. "With new rounds of state-mandated restaurant and bar restrictions, and winter weather limiting outdoor dining, food services accounted for 372,000 job losses in December," the Washington Post writes.