Trump administration claims DEI reduced productivity

The 2026 Economic Report of the President, released on April 13, 2026, continues the Trump administration’s attacks on diversity, equity, and inclusion (DEI). Chapter 10 is titled “The Economic Consequences of DEI” and “quantifies the GDP cost of distortive, non-merit-based, DEI hiring.” The report argues that the rapid increase in the hiring of minorities after 2015 as a result of DEI decreased productivity in the industries that adopted the programs. The report admits that the enactment of the Civil Rights Act of 1964 led to “reductions in discrimination [that] served as a boon to the U.S. economy” but argues DEI reimposed discriminatory practices, reversing those gains. 

The authors stated that because most companies don’t explicitly state how they use DEI in hiring, they had to use a proxy by tracking the representation of minority individuals in management ranks using federal data by industry, state, and year. Interestingly, the authors didn’t track representation by sex, sexual orientation, or Asian national origin. Through the use of this proxy, the authors found that while the representation of minorities between 2005 to 2015 rose less than 1 percentage point, it rose four times that amount from 2015 to 2023. The report then argues that DEI is the likely reason for the increase. The report then goes on to argue that because of DEI, productivity was 2.7% lower in industries that heavily invested in DEI than in those which did not. The report goes on to extrapolate the results and argues DEI cost the US 0.34% of annual output in 2023 or an average of $1,160 per family.