Wikipedia defines “startup accelerators” as “fixed-term, cohort-based programs that include mentorship and educational components and culminate” in a “demo day” on which hopeful entrepreneurs make pitches to prospective funders. On August 4, President Obama hosted his own demo day, recasting it to serve a policy goal—that of advancing “inclusive” entrepreneurship and employment. In the East Room he met “a diverse group of entrepreneurs . . . including those underrepresented in entrepreneurship like women and people of color,” as the official fact sheet clumsily described them. He heard their startup stories. And in his own remarks the president discussed what government and the private sector, and the high-tech industry in particular, are doing on behalf of this great goal of inclusion.
Seeking to ensure the event’s importance, Obama aides christened August 4 the “First-ever White House Demo Day” and promised the second one next year. But without substantial reconstruction, the first-ever demo day deserves to be the last.
What was wrong with Obama’s demo day? That it encouraged precisely what the federal civil rights laws prohibit. Which is, of course, discrimination.
Consider the so-called Rooney Rule (first adopted by the National Football League), which requires a company filling a vacancy to interview at least one woman and one “person of color”—meaning an “underrepresented” minority. The president was evidently pleased with the number of companies that have adopted some version of the Rooney Rule, among them Greenspring Associates, Scale Venture Partners, Amazon, Box, Microsoft, Xerox, Intel, Pinterest, and Zest Finance. But to make race or sex a ground for deciding among applicants such that someone of the “wrong” race or sex is denied further consideration is illegal discrimination.
The pertinent law is Title VII of the Civil Rights Act of 1964, which applies to both the public and the private sector. Title VII makes it unlawful for an employer “to fail or refuse to hire . . . any individual . . . because of such individual’s race, color, religion, sex, or national origin” or to “classify his employees . . . in any way which would deprive or tend to deprive any individual of employment opportunities . . . because of such individual’s race, color, religion, sex, or national origin.”
Those provisions also prohibit preferential or quota hiring designed to correct a statistical “imbalance” of some kind. And yet business practices held up as worthy during the White House demo day include those of Intel, which seeks a workforce that represents “American demographics” by 2020; Global Accelerator Network, which wants in five years to increase the share of women holding executive roles at both GAN accelerators and GAN startups to “parity,” and also to have “the ethnicities of GAN startup founders match the diverse makeup of the United States population”; and NY Tech Meetup, which seeks to increase the “diversity of its membership and of New York’s technology sector as a whole so that it mirrors the population of New York itself.”
Reaching those goals could entail using preferences for women and underrepresented minorities, with white men and Asian Americans (though perhaps not Asian Americans who are women) being discriminated against—in violation of Title VII. Unlike for university admissions, the federal courts have never recognized a “diversity” exception for Title VII, and are unlikely to do so.
You would think that someone bumped from an opportunity because of a company’s or government’s use of race or sex in the quest for “inclusion” might file a complaint with the Equal Employment Opportunity Commission or the Justice Department.
And you would hope, too, that the president of the United States, charged in Article II of the Constitution with taking care that the laws “be faithfully executed,” would not be leaning, as Obama has, on companies to count and benefit by race and sex in order to get their numbers “right,” according to some dubious statistical measure.
That kind of pressure can easily lead to discrimination, and it’s hard to imagine given the tenor of demo day that the Obama administration is not perfectly okay with that.
There will have to be an election with the right result before we have a president who faithfully executes one of the nation’s greatest civil rights laws.