Study: What if you knew how much your boss makes?

A hand holds up a bundle of dollars while many other hands do the same in the background
Credit: RapidEye for iStock/Getty Images

More states are requiring employers to disclose information about their workers’ salaries with the hope it will reduce gender and racial pay gaps. But increasing pay transparency can also have some surprising impacts on worker productivity, according to a new large-scale study that is the first to examine how employees respond when they find out how much both their peers and bosses make.

The study, co-authored by Assoc. Prof. Ricardo Perez-Truglia, asked over 2,000 employees at a large commercial bank in Southeast Asia to guess their peers’ and managers’ salaries, then monitored their work habits after they were given the salary information. The main findings: Employees became less productive when they discovered their peers were making more money than they thought, but they worked harder when they discovered their bosses were earning more than they estimated.

“It was not uncommon for employees to find out that some of their bosses got paid three, four, five times as much as they do, sometimes 20 times as much,” said Perez-Truglia, whose study is forthcoming in the Journal of Political Economy. “What shocked us was that when you compared yourself to your peers, small pay differences demotivate you. But when you find out your bosses make an obscene amount more than you make, you don’t care. If anything, you become more productive.”

The productivity boost was strongest for manager positions that were just a few promotions away from an employee’s current job, but the effect faded when it came to high-level, unattainable positions. This suggests workers believe, “If I work hard and get promoted, I will get paid an obscene amount myself,” Perez-Truglia said.

He and co-author Zoë Cullen of Harvard Business School also found that employees were better at guessing peer pay than manager pay. Employees also wanted the company to release more salary information—as long as it wasn’t their own.

The researchers did not study pay disparities by race or gender, but said their evidence relates to the growing debate on pay transparency laws. “There is a widespread view that forcing firms to be more transparent would reduce pay inequality,” they wrote. “Our findings suggest that these policies may be effective, but in a narrow sense: While transparency may pressure firms to reduce horizontal inequality (between peers), employees are unlikely to exert the same pressure to reduce vertical inequality (between employees and managers), which constitutes the bulk of pay inequality.”

The experiment

The research was conducted at an unidentified Southeast Asian bank in 2017, when Cullen was working there as chief economist. The researchers asked employees to guess the average base salaries of their managers and peers. Then, they conducted an experiment: half of the subjects, selected at random, would get to see an estimate of how much their peers or managers actually get paid.

The researchers then measured the behavior of these employees for 90 days after they saw, or did not see, what others were making. They found that employees worked harder–spending more hours at work, sending more emails from their company account and making more sales—when they found out their managers earned more than they thought. But those who found out their peers made more than they had estimated slacked off.

For example, they estimated that a 10% increase in manager salary over what employees had guessed increased the average hours employees worked by 1.5%, while a 10% increase in peer salary over what employees had guessed reduced the hours they worked by 9.4%.

The end of the survey included questions related to employee morale, such as job and pay satisfaction, and attitudes toward pay inequality. “When we tell them their peers get paid more, they say inequality is an issue. But when we tell them their bosses get paid more, they say they don’t care,” Perez-Truglia said.

On average, employees underestimated their bosses’ salaries by about 14%, but when it came to their peers’ pay, about half guessed too high and half guessed too low.

Would companies benefit?

Finding out how much peers earn “would positively affect some people and negatively affect some people,” with the net result for the company being about zero. “They cancel each other out,” Perez-Truglia said. Disclosing manager pay, however, would have a small positive impact on productivity.

On balance, the researchers concluded that companies and their employees could benefit from greater pay transparency.

Their results are consistent with previous research that found employees become demotivated when they find out their peers make more than they do. A 2012 study of University of California employees by UC Berkeley economists David Card, Emmanuel Saez, and Enrico Moretti along with Alexandre Mas of Princeton University showed that employees who found out they were earning less than the median for their unit were less satisfied with their job and more likely to look for a new one, while above-median earners were unaffected.

This new study is the first to look at the impact on employees who discover their boss’ pay, Perez-Truglia said.

He and Cullen also found that employees were hungry for salary information, and many were willing to “pay” for it. In the experiment, some employees gave up a chance to win almost $200 to see their boss’ or peers’ salaries. Employees may feel they need pay information “to decide whether to work harder to get promoted, or to use it as a bargaining chip in future salary negotiations,” they wrote.

Separately, in response to two survey questions, 65% of the employees said they would like their company to disclose to all employees the same type of average pay data provided in the experiment. However, 75% opposed disclosing everyone’s exact salary. “One plausible interpretation,” the authors wrote, “is that while employees value the salary information a lot, they may value their privacy even more.”

 

Patty Juarez, BS 94
Executive Vice President & Head of Diverse Segments–Commercial Banking, Wells Fargo Bank

Head and shoulders shot of Patty Juarez, BS 94.

Patty Juarez planned on being an accountant at a major firm, but her passion for helping minority entrepreneurs has resulted in a slightly different endpoint. As the highest- ranking Latina in Wells Fargo’s 268,000-person organization, she oversees diverse segments for commercial banking.

Juarez joined Wells Fargo right after graduating from Haas, initially in commercial banking. “I got to meet some Hispanic business owners, and then they would refer me to their brother and their cousin, to the point where I’d made a name for myself in that business community,” she says. Growing that portfolio over the years, rounding out her banking skills, and progressing up the management ladder led to what Juarez calls her “Shark Tank” moment in 2016.

“Ten years ago, a little over a quarter of businesses nationwide were owned by a minority, but that is rapidly changing,” she explains. “I thought, what if we had a really great strategy around growing women- and diverseowned companies? Wells Fargo could be part of their growth and success.” Juarez compiled a business case to present to the head of commercial banking, and the diverse segments group was born.

Juarez’s team now includes those who oversee outreach to women, Hispanic and Latino, Asian, Native American, and Black business owners across the nation, bringing specialized knowledge and cultural competency to relationship building. “I’m particularly proud of how long many of our diverse clients stay with us,” she says, mentioning that she still talks regularly with clients she first met in the ’90s. “It means we’ve built a rewarding relationship where clients are getting what they need.”

linkedin.com/in/patty-juarez-00320910

‘Driven by our own mission’: Blackbook University builds community and belonging

Blackbook’s co-founders and supporters attend a pre-launch presentation. From L-R: Maya Hammond, former BSU president; Farhiya Ali; Imran Sekalala; Ibrahim Baldé; Nahom Solomon; Hana Baba, NPR; Joy Dixon, Salesforce; Marco Lindsey, associate director of DEI at Haas; Nicholas Brathwaite; and Chase Ali-Watkins. Photo courtesy: Ibrahim Baldé.

As an undergraduate, Ibrahim Baldé, BS 20, said he faced many challenges on top of managing a rigorous course load. They included battling imposter syndrome, experiencing microaggressions from peers, and feeling pressured in class to be the spokesperson for his race as he was often the lone Black student.

After speaking with friends and classmates who also identified as Black, Baldé learned that they faced the same hurdles. A 2019 campus-climate report published by UC Berkeley’s Division of Equity, and Inclusion also confirmed Baldé’s experience, which found that many Black students experienced exclusionary behaviors from peers, including being stared at or singled out to represent their race.

Wanting to improve the Black student experience at Berkeley, Baldé co-founded Blackbook University, a website and mobile app that provides educational and professional resources to help Black undergraduate and graduate students navigate their journey at Berkeley. Blackbook’s other co-founders include Nicholas Brathwaite, Chase Ali-Watkins, both BA 20, Nahom Solomon, BA 21, Farhiya Ali and Imran Sekalala, both BA 23.

The app, which launched Nov. 18 and is a revival of a Black student handbook published in the 1980s and 1990s, includes a calendar with extracurricular and career-related events, a student-alumni-faculty directory, a live chat feed for users to interact, and a scholarship and internship database. The website features student profiles and an internship program for students interested in entrepreneurship and tech. 

Brathwaite manages product development, Ali and Sekalala handle data analysis and design, Solomon serves as the director of operations, Ali-Watkins is the chief marketing officer, and Baldé is CEO.

Student Profile – Adaeze Noble from Made By Chase on Vimeo.

The journey

The son of an imam, Baldé was instilled with a “beyond yourself” mindset at an early age. Growing up in Alameda, Calif., Baldé knew that he wanted to combine his three passions: social impact work, business, and tech. Once at Haas, Baldé took Haas Lecturer Alex Budak’s leadership class called Becoming a Changemaker

“That class allowed me to think about my mission and purpose and to understand that leadership isn’t a defined trait,” Baldé said. 

Following that class, Baldé began to lay the groundwork for Blackbook University. He teamed up with his co-founders and formed an advisory board of faculty and staff across campus, including Budak, Marco Lindsey, associate director of Diversity, Equity, and Inclusion at Haas; Miya Hayes, BA 92, associate director of Campus Partnerships & Engagement; and staff from the African American Student Development Office. 

Baldé surveyed about 150 Black Berkeley and Haas students to assess if he had a winning idea. The answer was a resounding yes. 

While Slack and GroupMe are useful networking tools, 90% of surveyors reported that it was important to have a tool that was designed for them.

“Students can’t take ownership of Slack and GroupMe, but they can take ownership of Blackbook,” Baldé said.  

A copy of the original UC Berkeley African American Student Handbook published in 1996.

Successes and challenges

Baldé and his team have had some successes. They participated in UC Berkeley’s Free Ventures pre-seed accelerator, allowing them to test and tweak their business model. They also were one of the Big Ideas Contest grand prize winners, earning $10,000 in prize money. 

But they’ve also had some setbacks, including finding the best developer who could deliver the app they envisioned. Another setback was validating their business model to potential investors. Currently, Blackbook is free to download. 

“We just tune out the noise,” Baldé says. “We’re driven by our own mission and that is to build community and to make our resources and networks available to Black student communities.”

Despite the hurdles, the team continues to press on. Their goal is to make customized versions of the app for Black student communities at colleges and universities nationwide. 

Faculty and staff advisors praise Baldé and his team for creating a sense of belonging on campus.

“I’m inspired by how Ibrahim can readily imagine a better future and then rally the people and resources needed to turn these ideas into reality,” said Budak. “We talked about how one of the greatest acts of changemaking is creating the opportunities for others that we wish we had for ourselves and Ibrahim is doing just that.”

Hayes agreed. “I’m in awe of their innovation–taking both the best and most challenging aspects of their time at Berkeley to create something that sustains and nourishes our sense of belonging,” she said. “They’re giants in their own right.”

Why Black and Latino homeowners profit less than whites

Credit: Leslee for iStock/Getty Images

New research has found Black and Latino homeowners make significantly lower returns on buying a home than whites, on average. But surprisingly, it’s not because of differences in home prices or appreciation rates in their neighborhoods.

In fact, when it comes to regular home sales, minority sellers realize about the same returns on average as whites. The study found instead that almost all of the disparity is driven by higher rates of foreclosures and other distressed home sales among Blacks and Latinos, which wipes out a huge chunk of potential wealth and lowers average returns.

Amir Kermani
Assoc. Prof. Amir Kermani

“Most of us think of home ownership as an excellent way to build wealth, so I think it’s natural for politicians and policymakers to believe that the best way to reduce the wealth gap is to promote home ownership among minorities,” said Berkeley Haas Assoc. Prof. Amir Kermani, study co-author. “What’s striking is that we found that equalizing rates of first-time home ownership would have almost no effect on the housing wealth gap, whereas helping people keep their homes would make a huge difference.”

The National Bureau of Economic Research (NBER) working paper, co-authored with Francis Wong of NBER, has important implications for housing policy, and also identifies the disturbing and deep-seated disparities in job stability and liquid wealth that underlie the higher foreclosure rates for Blacks and Latinos—even those with higher incomes.

The persistent wealth gap

In the United States, the median white household holds ten times the wealth of the median Black household. But although Black home ownership has increased from 23% in 1920 to 45% in 2021, the wealth gap has barely budged. Kermani was curious as to why decades of policies to increase homeownership hadn’t made more of a difference in closing the wealth gap.

He and Wong harnessed massive datasets linked together by the Fisher Center for Real Estate and Urban Economics, capturing 6 million home ownership spells from 1990 to 2017. The data includes Home Mortgage Disclosure Act records with self-reported race and ethnicity from loan applicants, real estate transaction records from data provider ATTOM; credit reports and loan-servicing data from Equifax-McDash; plus loan information from several other government and private sources. The study is the first to estimate the gap in returns on home ownership for Blacks and Latinos using data on individual transactions.

Across the housing market, discrimination has been well-documented, from redlining to unequal tax assessments to unfavorable loans and refinancing deals. And historically, minorities have often faced lower house price growth in their neighborhoods. That’s why Kermani was surprised to find that for regular home sales over the last two decades, average returns were very similar across racial groups—within neighborhoods with many minority homeowners and those that are primarily white. While some individual Black and Latino sellers sold their homes for much lower prices, gentrification pushed prices sky-high in other neighborhoods, bringing up the average. 

Yet averaged across all types of sales annually, Black and Latino homeowners make 3.7 and 2.0 percentage points less than white homeowners, the researchers found. Compounded over ten years, that’s a 44% lower return for Blacks and 22% lower for Latinos. These disparities in returns on home investments exist across all income levels, even the richest one-third of minority homeowners. (The magnitude is greatest among lower-income and single-parent families.)  

Averaged across all types of sales annually, Black and Latino homeowners make 3.7 and 2.0 percentage points less than white homeowners. Compounded over ten years, that’s a 44% lower return for Blacks and 22% lower for Latinos.

Distressed sales

It’s among distressed sales where the chasm emerges. Distressed sales include foreclosures, where a borrower stops making payments on their mortgage and the lender sells the home to recover the balance, as well as short sales, where a lender forces the homeowner to sell for the outstanding mortgage balance. 

Minority homeowners are 5% more likely to experience a distressed sale, and to live in neighborhoods where forced sales carry a steeper price discount, likely because there are fewer buyers, Kermani said. Distressed sales usually carry a price penalty, but even within distressed sales, Black and Latino homeowners make 3.8 and 2.7 percentage points lower returns than white homeowners, respectively. 

“If we could equalize the rate of return on homeownership for Blacks and whites—without any increase in home ownership—we would reduce the Black/white housing wealth gap by about 40% at retirement,” said Kermani. “If we were able to equalize both home purchases and the rate of return on ownership, we’d reduce the gap by 50%.”

Less job security, fewer assets

So why are minorities so much more likely to lose their homes in forced sales? It’s not because they take on more debt to buy them, and although differences in income and overall wealth play a role, they’re not the primary driver, the study found. For Blacks in particular, the researchers found a huge gap in liquid assets—cash or its equivalent—that accelerates from age 50 on. They also found that Blacks and Latinos are much more likely to lose their jobs than whites, across all sectors, education levels, geographic locations, and income levels.

“That was what surprised me the most: Even Black households with income over a hundred thousand dollars are still about 5% more likely to experience a layoff,” Kermani said. “The combination of higher job instability and fewer liquid assets makes people very vulnerable to a temporary shock, and increases the chances of losing all the wealth they’ve accumulated in their house.”

The researchers found that controlling for liquid assets and income shocks explains one-third of the higher mortgage delinquency for Blacks, and nearly half the difference for Latinos. Kermani said he hopes to dig deeper into the causes of the layoff disparities in future research.

Policy implications

“What’s clear is that the main problem seems to be rooted in the labor market, and the main fix has to be creating more stable jobs and ways to build liquid assets,” he said. “But in the short term, one solution is more flexible mortgage contracts and more mortgage modifications.”

The researchers estimated that receiving a modification after three months of failing to make mortgage payments can reduce the likelihood of a foreclosure by 37 percentage points, and increase a homeowner’s average annual returns by nearly 9 percentage points.

Black MBA Association partners with Haas on EWMBA fellowships

The Berkeley Haas Evening & Weekend MBA Program will host a kickoff event Nov. 9 for a new fellowship program aimed at increasing access to business leadership and scholarships for historically underrepresented groups. 

The program, launched through a partnership between Haas and the SF/Bay Area chapter of the National Black MBA Association (NBMBAA), includes networking and mentorship, as well as the opportunity to be selected for a $50,000 scholarship. The scholarship award is more than 50% higher than most scholarship awards to students in part-time MBA programs.

 Joe Handy, president of the National Black MBA Association
Joe Handy, president of the National Black MBA Association, will speak at the Nov. 9 kickoff.

The kickoff event, to be held in Chou Hall’s Spieker Forum from 6-8 p.m., will feature guest speakers Joe Handy, president of the National Black MBA Association; Myisha Robertson, president and CEO of the San Francisco Bay Area Chapter of the National Black MBA Association; and Élida Bautista, Chief Diversity, Equity & Inclusion Officer at Haas. A panel discussion with Berkeley Haas alumni and members of the SF Black MBA Association will follow.

Elida Bautista
Elida Bautista, chief DEI officer at Haas, will speak at the NBMBAA event.

“We’re so excited to be partnering with the local chapter of the NBMBAA,” said Jenny Clare, senior associate director of admissions for the Berkeley Haas EWMBA Program. “The Berkeley Haas Equity scholarship will help us to continue to increase the diversity of the applicant pool, and, as a result, increase the diversity of student enrollment in our program.”

As an SF Black MBA Fellow, students will:

  • Become a member of the SF Bay Area Chapter of the NBMBAA and be assigned a mentor who will provide counsel, connections, and guidance throughout their MBA study. 
  • Join a cohort and community of other fellowship recipients and their mentors in the inaugural class of SF Black MBA Fellows, which will begin in Fall 2022 and extend through their time in the Berkeley Haas EWMBA program and beyond.
  • Meet regularly with other SF Black MBA Fellows and mentors, network with the SF chapter and Haas leadership, and have exclusive opportunities to connect with Bay Area business leaders.
  • Be considered for one of the $50,000 Berkeley Haas Equity Scholarships, which will be awarded to SF Black MBA Fellows who exemplify commitment to increasing opportunities and access for underrepresented groups. The number of awards will depend on the applicant pool, and is estimated at two-to-four scholarships of $50,000 each, distributed over three years.

Funding for the new scholarships was provided by Jamie Breen, assistant dean of the school’s MBA Programs for Working Professionals. 

“We’ve been thinking about scholarship support to increase the diversity of our working-professional student population for a while, but it’s hard to get these things started,” she said. “I have the capability to do it, so this seemed like a great place to use my philanthropy.”

Jamie Breen
New scholarships will help increase applicant diversity, according to Jamie Breen, assistant dean of MBA Programs for Working Professionals.

Interested new applicants should apply for the fellowship at the time they apply to Berkeley Haas, well before the final deadline of May 2, 2022, as fellowships are awarded throughout the admissions cycle, Clare said. (The scholarships are not open to current EWMBA students)

Applicants commuting to campus from outside the Bay Area, or who join the Flex EWMBA cohort, are also welcome to apply to be a SF National Black Fellow. 

The fellowship application includes a 250-word essay about how an applicant demonstrated an ongoing commitment to increasing opportunity and access to people from racial/ethnic groups who are historically underrepresented in business (specifically Black/African-American, LatinX, and Native/Indigenous communities).

Berkeley Haas has long been an NBMBAA educational partner, and sought to further this relationship with the local chapter, where some Haas alumni are already active. 

The San Francisco Bay Area chapter of the National Black MBA Association is open to Haas MBA students as graduate-level members. Visit their website or contact president@sfnbmbaa.org to learn more.

 

‘A place where people can see themselves’: Élida Bautista, Chief Diversity, Equity & Inclusion Officer

Chief DEI Officer Élida Bautista.

When Élida Bautista arrived at Berkeley Haas as director of diversity, equity, and inclusion in 2018, she found a community “ready to do the work and not just pay lip service” to diversity.

Since then, she’s worked alongside that community, building the school’s first five-year DEI strategic plan and creating a culture shift toward one of greater belonging—or, as she puts it, “a place where people can see themselves.” This week, Bautista—who came to Haas after spending 15 years developing programs focused on social justice, diversity, and inclusion for  UCSF’s Department of Psychiatry—became the first woman and Chicana/Latina to be named chief DEI officer at Haas.

We spoke to her about her most pressing priorities, how the pandemic impacted her work, and the diversity-related initiatives she plans to work toward over the next five years.

What are you most proud of accomplishing during your interim DEI chief role at Haas in the past year?

One of the accomplishments I am most proud of is getting input from the community to implement our DEI strategic plan. Last year, the Diversity, Equity, and Inclusion (DEI) team started off with listening sessions across Haas.

We wanted to learn what teams were accomplishing, how they were integrating DEI in their work and to give people a space to feel heard. Those listening tours helped us refine and implement a Haas-wide DEI strategic plan and positioned us as thought partners in helping teams carry out their own DEI initiatives.

As we launched, it was important to be transparent with our community. We publicly shared the plan on our website, and shared regular updates about progress on our deliverables on our website, something that had not happened before. That was meaningful to our community because it allows everyone to get involved and to see our progress as well as any delays.

Beyond the DEI plan, what broad initiatives are you working on that dive deeper into DEI?

We are looking to continue creating a DEI culture shift at Haas. But we’re not just thinking about diversity as scholarships and increasing admissions and representation. That’s an important part of it, but we must simultaneously build a place where people can see themselves. We’re thinking about how we get more diverse folks in the door, but also about their experiences once they’re here in the classroom or the workplace. 

We must…build a place where people can see themselves.

We are creating a sense of belonging through a variety of offerings, including co-curricular educational and professional development activities, as well as community social events. 

We also need to invest in pathways toward making our faculty more diverse. One way we’re doing this is by creating a postdoctoral fellowship through a gift from Allan Holt, MBA 76. Postdocs offer the opportunity to bring scholars into the faculty pipeline who might not otherwise pursue a faculty career at a university where there is a very high level of research activity. We also set aside part of the funds to integrate DEI into the curriculum. 

What are your most pressing goals in the new role? 

As a chief diversity officer who sits on the management team, my pressing goals are focused on partnering with our associate deans of academic affairs to increase diversity in faculty hiring, support retention and promotion efforts for our underrepresented faculty, and support DEI curricular offerings. At a strategic level, my goal is to support our dean and our senior managers in effectively addressing diversity, equity, inclusion and belonging-related challenges, and collectively continuing to make progress on our strategic plan. Additionally, I will be involved in providing feedback to the chairs of the search committees about the diversity of our faculty candidates. Over time, our postdoctoral fellowship will be an additional source for increasing the diversity of the faculty pool.

How has COVID impacted your job during the pandemic?

COVID magnified a lot of existing disparities and social injustices—everything from who had to keep going to work in-person to who had access to health insurance to treat COVID if they got sick. We also saw a rise in visibility of violence targeting some communities. This increased the sense of vulnerability that needed to be integrated into our team’s offerings and approach. 

Initially during the pandemic, a lot of our work was about holding space for community members to reflect, as well as offering managers tips to understand how to support staff who might be having a different experience during this time. We asked: How do we extend empathy at a time when everybody is feeling overwhelmed and stretched? 

How does it feel to be back on campus?

Now that we’re back on campus, there’s a renewed sense of connection that we all need. Being back allows people to engage in a more authentic way with each other, which makes my work a little bit easier when we’re talking about learning across differences. Being online made these connections more challenging. For example, if everyone is off camera and one person is talking and nobody’s clapping or smiling or affirming, it’s unclear if your message has resonated with anyone.

What would be a major achievement for Haas in the next five years in DEI?

I think we’re well on our way, but a major achievement would be to make Haas the leader among business schools in reputation regarding diversity, equity, inclusion, and belonging, based on our robust offerings, the skills our students gain while at Haas, and the type of leaders we produce.

Another major achievement would be to make meaningful gains in the representation of women among our students across degree programs and among our faculty, including more women of color, LGBTQIA+ women, women veterans, and women with disabilities.

Also, as UC Berkeley continues to advance toward becoming a federally designated Hispanic Serving Institution (HSI) by 2027, a major achievement would be to  align Haas with the recommendations of the HSI task force and position ourselves to serve the needs of Latinx/Chicanx and underrepresented communities on campus.

Om Chitale, MBA 18, receives first Equity Fluent Leadership Award

Om Chitale, MBA 18, receives the Kellie A. McElhaney Equity Fluent Leadership award.


Om Chitale, MBA 18, has won the school’s first Kellie A. McElhaney Equity Fluent Leadership award for championing diversity and inclusion initiatives at Haas and beyond.

Chitale, the former director of diversity for Berkeley Haas’ Full-time MBA Admissions, received the award at the Center for Equity, Gender & Leadership’s “EGALapalooza” diversity celebration last Friday. 

The award, named for and funded by EGAL’s founding director Kellie McElhaney, recognizes members of the Haas community who have made significant contributions toward building an inclusive and equitable community at Haas and beyond.

“Om walks through life with a halo of light and love and acceptance and has left a profound impact on our community,” McElhaney said at the event, which brought together about 75 students, faculty, and staff, at Spieker Forum in Chou Hall. 

“Om walks through life with a halo of light and love and acceptance and has left a profound impact on our community.” — Kellie McElhaney

While a student at Haas, Chitale and classmate Liz Koenig, MBA 18, co-founded the student-led class called Dialogues on Race. He also led the charge to create EGAL’s first Investing in Inclusion Pitch Competition. After graduation, he founded startup Teachers of Oakland, with the aim of sharing first-person stories from the city’s public school teachers to social media. He later joined the full-time MBA Admissions’ team as its first director of diversity.

McElhaney noted that Chitale was “a real thought partner” who encouraged cross-campus collaboration between students, faculty, and staff on DEI initiatives.

“It’s incredible to be part of this [Haas] community with people who are pushing the envelope, questioning the status quo, and taking action,” said Chitale, who recently left Haas to serve as LinkedIn’s senior program manager of Inclusion Recruiting Partnerships. “This work [DEI] has ripples of impact and so I encourage everyone to continue to take action,” he said.

Other notable EGALapalooza guest speakers and performers included Derek Brown, PhD 23; Ashley Rabinek, director of merchandising at Old Navy; Verse Gabrielle, associate director of full-time MBA Admissions; and singer and songwriter Dominique Gomez.

Haas Voices: ‘Fighting for healthcare equity in my community’

Portrait: Adilene Dominguez, EWMBA 24
Adilene Dominguez, EWMBA 24, is determined to make healthcare more equitable.

Haas Voices is a first-person series that highlights the lived experiences of members of the Berkeley Haas community. In honor of Latinx Heritage Month, we spoke with Adilene Dominguez, EWMBA 24, who’s determined to create a new business model that will provide equitable health care to everyone, regardless of economic status. She shares her story below.

Growing up in Waukegan, Illinois, a suburb north of Chicago, I lived in a world with many blessings. My parents weren’t millionaires, they were migrant workers who worked 80 hours a week. But the opportunities afforded to us–access to public schools, tutors, health insurance, the ability to find work–were privileges that many Latinos in my community, including my extended family members, did not have.

I began to notice inequities, specifically in healthcare, when I was about five years old. I often accompanied friends and family whenever they needed to see the doctor. They spoke little English, so I translated on their behalf. I noticed that they’d have to stand in line for hours at the local clinic to get medical treatment, whereas if I needed medical care, my parents would take me to a hospital because I had health insurance. It just didn’t seem fair to me that our friends and family couldn’t get the same quality health care as I did.

family portrait featuring a mom, dad, 2 girls and 1 boy.
Dominguez’s family portrait. Dominguez, (center), began translating for friends and family when she was five years old.

Observing those disparities early on, coupled with a natural aptitude for science and math, led me to Beloit College where I joined the pre-med program. As a pre-med student, I interned with doctors and volunteered at hospitals, but quickly realized that I didn’t want to be a doctor. I thought that I’d have a greater impact if I could find a way to bring equitable health care to my community.

After college, I landed at Becton Dickinson (BD), a medical device company, working as a research and development (R&D) technician. I moved up the ranks from a technician to a scientist and eventually transitioned from R&D to global marketing and strategy. 

I also lead the Hispanic Organization for Leadership and Advancement (HOLA) at BD. Through my work with HOLA, I help raise awareness within my industry about health disparities that impact the Latino community. When the pandemic hit, access to testing was limited, especially in Latino communities in California, Arizona, and Texas. I, along with marketers across eight HOLA chapters, decided to advocate for the distribution of Veritor, a rapid antigen test that can detect the COVID-19 virus, to health clinics servicing Latino communities. Through our efforts, we helped the Family Health Center of San Diego, which provides care to more than 215,000 patients a year, 91% of whom are considered low-income and 29% are uninsured. 

It’s been gratifying to help my Latino community as it’s been disproportionately impacted by the COVID-19 pandemic. But I need to do more. The pandemic magnified health disparities that have long existed in Black and Brown communities. Whenever there’s a hurricane, earthquake, or any natural disaster, health care seems to be the primary resource that’s out of reach for these communities.

The pandemic magnified health disparities that have long existed in Black and Brown communities.

That’s why I’m at Haas. I want to acquire the skills needed to disrupt the healthcare system in the U.S. I want to design a profitable business model that will provide equitable health care for everyone, regardless of socioeconomic status.

What does disruption look like? It’s putting the patient first and profit last. Currently, the way healthcare works in the U.S. is that whoever or whichever entity has the most influence or paying power gets access to the best medical supplies. Typically government contracts are fulfilled first. Thereafter, private institutions and public institutions get priority, and community health centers are served last.

But what if we flipped the funnel? If we help community clinics first, which serve people like farmers and hourly-wage workers–the people who are growing our food and working at grocery stores and other service industries–we can prevent the spread of any disease.

For too long, our approach to providing health care has come from the top down, when we really need to flip the funnel and think about the process much differently. We can’t keep doing business as usual when there are hundreds of people filling up the emergency room because they don’t have access to COVID-19 testing or vaccines.

Creating a new business model for the healthcare system is a lofty goal. But someone has to do it, so why not me? 

Creating a new business model for the healthcare system is a lofty goal. But someone has to do it, so why not me? 

I know that I’m putting a lot of pressure on myself, but it’s my responsibility to help my community. That philosophy has been ingrained in me since I was a little girl. My family, who migrated from Tonatico, Mexico, made enormous sacrifices so that my siblings and I could have a better life. So I must move forward and be a role model for younger generations. If I don’t help my community, who will? 

Bolstering the Board

Haas diversifies pool of advisors

The courtyard of Berkeley Haas seen with trees in fall colors.

Three new Haas School Board members are adding diversity and depth of corporate experience to the group of advisors helping the dean and senior leaders strengthen the brand and reputation of Haas. “I’m proud that our Haas Board has become more representative with the addition of new board members, including those from underrepresented minority groups,” says Dean Ann Harrison. “These voices will help us achieve our audacious vision to forge business leaders who will work to create a more innovative, inclusive, and sustainable world.”

Monica Stevens, MBA 96“Equity fluency and leadership excellence go hand in hand. As a board member, I’m thrilled to serve with Dean Ann Harrison and others to help meld and magnify those tenets for Haas and the broader community. We can expand the pie so everyone gets a meaningful and fulfilling slice—there is enough for everyone to enjoy and benefit.”

Monica Stevens, MBA 96
Senior Vice President and Credit and Risk Leader, Wells Fargo Merchant Services

Frank Cooper III, BS 86“Excellence requires help. That simple fact has motivated me to provide whatever support and guidance I can give to help students thrive. I saw the potential to contribute to advancing diversity, equity, and inclusion (DEI), promoting activities that expand student capability in sustainability, and continuing to elevate the reputation of Haas.”

Frank Cooper III, BS 86
Senior Managing Director and Global Chief Marketing Officer, BlackRock

Eric McKissack, BCEMBA 04“I’m very interested in Haas remaining in the top rank among its peers in all key measures. My hope is also that I will be able to contribute to the ongoing and developing activities regarding DEI. As a Black American, DEI is a topic of particular resonance and interest to me.”

Eric McKissack, BCEMBA 04
Founder and Former CEO, Channing Capital Management LLC; Independent Board Director

 

Foul Language

How prejudice spreads

Survey with the question: Are you sure you're not racist? and yes/no boxes. A pen is poised to select "no."
Photo: ©Richelle/stock.adobe.com

When you insist you’re not racist, you may unwittingly be sending the opposite message.

That’s the conclusion of a new study by Berkeley Haas researchers who conducted experiments with white participants claiming to hold egalitarian views. After assessing their underlying racial attitudes then asking them to write statements explaining why they weren’t prejudiced against Black people, they found that other white people could nevertheless gauge the writers’ underlying racism.

“Our results suggest that the explicit goal of appearing egalitarian might blind people to the possibility that they could be communicating, and perpetuating, prejudicial attitudes,” says Asst. Prof. Drew Jacoby-Senghor.

What were those linguistic cues? The most powerful indicator, they found, was language that dehumanized or objectified African Americans—for example, “I have a great relationship with the Blacks.”

Co-authored by Derek Brown, PhD 23, and Michael Rosenblum, PhD 20, the research also found that white readers reported greater racism toward Black people after reading statements from self-avowed white egalitarians who scored high on underlying prejudice. In other words, the readers mirrored the attitudes of the writers, even when they reported they were ideologically dissimilar (conservative vs liberal).

Pride Month profile: Verse Gabrielle on the revolutionary act of being a proud Black queer woman

One, light-skinned black girl and a dark-skinned Black woman sitting in car.
Verse Gabrielle (with daughter Lyric Assata Gabrielle) is an associate director for the full-time MBA admissions program.

Haas Voices is a first-person series that highlights the lived experiences of members of the Berkeley Haas community. 

Born and raised in Chicago’s South Side, Verse Gabrielle is an associate director for the full-time MBA admissions program at Haas. Gabrielle, who uses “shey, sheir, shem,” pronouns that are preferred by some nonbinary and trans people, is also a poet, a playwright, a wife, and mom to four-year-old daughter Lyric Assata. In this Haas Voices interview, Gabrielle talks about growing up, being queer, and the healing power of intellectual curiosity and the spoken word.

I knew from as early as six years old that I was queer. But queerness was not celebrated in my family. I enjoyed having male friends and playing sports with boys my age, but I was never interested in the male gaze. I despised wearing dresses, playing with Barbie dolls, and never considered myself overly feminine, which was met with a lot of disdain.

When I was a freshman in high school, I told a family member that I liked girls. I was advised to keep the secret and not to disclose it to anyone. So I did. I suppressed my queerness until I deemed it safe to come out. Unfortunately, I was forced back into the closet until I turned 18. 

Book smarts and intellectual curiosity are what saved me. 

I graduated as valedictorian of my elementary school. Instead of attending my neighborhood high school, I went to De La Salle Institute-Lourdes Campus (DLS), one of the top private schools in Chicago. After completing my freshman year, I transferred into the honors program at DLS. I was ranked #6 in my class, graduating with a 4.667 G.P.A.

In my senior year of high school, I applied for and was awarded the Bill and Melinda Gates Scholarship. I felt like I had secured my financial future and could leave behind all the drama. I decided to go to the University of Minnesota, where for the first time in my life, I could be my authentic self. I started dating women, joined the LGBT student union. It was freeing. 

While my intellect saved me, my spoken word helped heal me. I started writing poetry when I was about 10 years old, performing at talent shows and school assemblies, but it wasn’t until the summer before I went to college that I started performing at open mics in Chicago. 

In college, I joined a student club called Voices Merging and later established the group Poetic Assassins. We’d travel and perform at different universities and colleges around the U.S. My poetry spans topics of internalized homophobia, racism, sexism, misogyny, the prison industrial complex, and gender roles. 

Spoken word was my therapy: it helped me escape and process all the trauma I endured in Chicago. That’s where I let out all of the anger, rage, and pain. It also opened many doors for me. My poetry has been published in a few anthologies, including “When We Become Weavers: Queer Female Poets on the Midwestern Experience.” I’ve also written and collaborated on a spoken-word play, and facilitated poetry workshops focused on the intersectionality of race, class, and gender through a hood-feminist lens (i.e. Black feminist critique of traditional feminism).

I’ve been called dyke, bulldagger, male-woman, he-she, and chi chi man, which was hurled at me as I walked the streets of Kingston, Jamaica. 

My artistry allowed me to move and operate in different spaces, but it didn’t shield me from bigotry, homophobia, and microaggressions on and off campus. I remember going to a rally almost every other weekend to protest against police brutality and crimes against Black and Brown people. I’d go to these protests to show solidarity because I am Black and I’m absorbing the pain like everyone else, but I’d also face homophobia from members of the Black community because my physical appearance and queerness didn’t fit the mold of what an “ideal Black woman” looks like. I’ve been called dyke, bulldagger, male-woman, he-she, and chi chi man (which was hurled at me as I walked the streets of Kingston, Jamaica).

A Black woman wearing dark sunglasses and pink shirt
Portrait: Verse Gabrielle

Being queer and masculine-presenting has affected my relationship with straight men and women. I get weird looks and sometimes I’m questioned when I enter the female restroom, which is where I am most comfortable. I have had verbal altercations with men who’ve had issues with how I express my queerness being masculine-presenting. I’ve also had women express their discomfort with my presence in professional and communal spaces because they feared I was romantically interested in them.

I have many identities, however the core of my identity is my unapologetic Blackness: Black Buddhist, Black mother, Black queer, Black wife, Black woman, and so on. I am proud of my heritage and culture. I embody the beauty and duality of masculine and feminine traits without denying either. I demand the world see me the way I want to be seen. As a result, my identities have evolved from strikes against me to badges of honor that I wear proudly. To walk this earth against society’s expectations of what womanhood looks like is revolutionary.

A black woman and her daughter sits on a blue-and-white checkered blanket.
Gabrielle’s wife, Dominique, and four-year-old daughter Lyric Assata.

As parents to a four-year-old daughter, my wife, Dominique, and I strive to be the best parents. We have taken parenting classes and joined groups to prepare and round out our parenting techniques. It’s important for us to not only model Black queer love, good communication, and healing, but also to support and celebrate our daughter’s Blackness, femininity, intellectual curiosity, athleticism, and spunk. We support our daughter, Lyric Assata, in everything she does. We take the time to listen to her and truly understand her love languages. Dominique and I are just two Black queer womyn who’ve shared their visions and created the family we always wanted to have—and that’s revolutionary.

I’ve had an amazing experience since joining Haas in 2019. By far, Haas has been one of the best communities that I’ve joined. As a Black queer woman, I feel heard, my identities are celebrated, and I’m part of a diverse staff who support me. My colleagues and I regularly participate in Courageous Conversations where we discuss difficult topics like race, gender, and class. It’s rare to find a work environment where I can be my authentic self and I think much of that has to do with Haas’ Defining Leadership Principles (DLPs). Students Always is my favorite DLP because I’m an intellectual at heart and will forever be a student. 

Now that I have transitioned from an admissions manager to an associate director, I feel like I have a seat at the table, I can make admissions decisions, and I can serve as a support system to all of our students, especially those who have similar backgrounds to me. When I was applying to college and graduate school, there was neither a blueprint nor a support system for me; I had to figure out everything on my own. But now, I can be of service to others.

News coverage of racial incidents lowers support for Black entrepreneurs, study finds

Black Lives Matter demonstrators march in St. Paul
Black Lives Matter demonstrators hold signs during a march in St Paul, Minnesota on March 19, 2021. REUTERS/Nicholas Pfosi

One might expect that black entrepreneurs are receiving some long-deserved recognition. After the murder of George Floyd last summer, calls to #SupportBlackBusinesses and #BuyBlack soared. Top U.S. companies vowed to invest $50 billion in promoting racial equity, including support for communities of color, according to Fortune.

A year later, anecdotal reports from Black business owners suggest that the uptick in sales during the Black Lives Matter protests didn’t last. As of May 2021, U.S. companies had spent or made specific pledges worth only $250 million, or 0.5% of their total commitment.

Andreea Gorbatâi, an assistant professor in the Management of Organizations group at Berkeley Haas, is not surprised. Her latest research—forthcoming in Organization Science—paints an even bleaker picture: Black entrepreneurs have an even harder time finding support when racial discrimination is top of mind. In her paper, she estimates that the overall success rate for Black founders raising money through Kickstarter fell 21% after racially charged deaths of African Americans topped the news.

“This confirms what sociologists have long known: When people are reminded of how they differ from others, they often become more inclined to identify—and side—with their own group,” Gorbatâi says.

When people are reminded of how they differ from others, they often become more inclined to identify—and side—with their own group. —Andreea Gorbatâi

Calling attention to differences

Gorbatâi’s article explores the social mechanisms behind the drop-off in support. When news reports call attention to acts of racism, potential crowdfunding investors who self-identify as white are more likely to question the quality of Black founders’ idea or ability to succeed, she found.

This shows, says Gorbatâi, that discriminatory behavior is not just a function of individual dislikes for a particular group, nor is it what economists call “statistical” discrimination—a function of the information one has about that group. Rather, the extent to which people engage in discriminatory actions is also influenced by changes in their environment, even when those changes are unrelated to the action at hand. “Reading about racial discrimination occurring elsewhere in the United States seems to affect one’s likelihood of shopping from an African-American-owned local business—completely unrelated to the event in the news,” Gorbatai says.

This change in preferences is not limited to whites. Gorbatâi and her co-authors found evidence that Black participants were also more likely to favor Black entrepreneurs after reading about highly publicized incidents of racism. Yet at the societal level, deep-rooted systemic racism, the resulting differences in cumulative net worth between Blacks and whites, and the fact that Black Americans constitute just 13.4% of the U.S. population translate into greater economic discrimination against Black entrepreneurs.

“These research results add to the painful picture of pernicious and multifaceted discrimination against Black people in the U.S.,” says Gorbatâi, who is set to become an associate professor at the Vlerick Business School in Belgium in August.

Reacting to news reports

Gorbatâi and her collaborators, Peter Younkin, PhD 10 (Sociology), an assistant professor at the University of Oregon, and Gordon Burtch, an associate professor at the University of Minnesota, confirmed their findings across three online experiments and one real-world experiment that examined the impact of Black Lives Matter media coverage on Kickstarter campaigns.

In their first study, 323 U.S. adults—most of whom were white—were given one of two Associated Press articles to read. The first group read a neutral account of plans by Starbucks to provide racial bias training to employees after two Black men were arrested for asking to use a Philadelphia store bathroom. The second group read about a snowstorm in the Midwest. All participants were then asked to review a crowdfunding proposal for a waterproof speaker, being told that it was either led by either a Black or white founder. The researchers found a significant difference between the groups: Those who read about the snowstorm rated the two proposals similarly, in terms of quality of the idea and abilities of the entrepreneur, while those who had been primed to think about race judged the white-led project to be better than the Black led-one.

Because the first study had very few Black participants, the researchers repeated it, recruiting equal numbers of people self-identifying as Black or white (400 each). In this experiment, they found that after reading about the Starbucks incident, both white and Black participants favored entrepreneurs of their own race—despite the fact that everyone evaluated virtually identical projects.

A third experiment sought to understand what role political affiliations and the tone of media coverage play in people’s attitudes. Specifically, the researchers wanted to assess whether party affiliation is a better predictor of how individuals respond to a Black entrepreneur than racial identity, and whether the tone of media coverage changed their reactions. They asked 500 Republicans and 500 Democrats to read versions of the Starbucks article that had been modified to portray either the police, or the Black men arrested, as behaving disrespectfully and aggressively. These articles were meant to simulate left- or right-leaning media reports, in contrast to the more neutral Associate Press tone.

To Gorbatâi’s surprise, political leanings and media tone were not a significant factor in people’s reactions, with no significant differences between liberals and conservatives. They did, however, note that reading an article that placed blame on either party led the readers to give even lower evaluations of Black founders than the original, neutral article. This was true even for those who read articles that put the police clearly at fault.

“Instead of greater empathy, there was a greater penalty for Black founders,” says Gorbatâi.

Instead of greater empathy, there was a greater penalty for Black founders.

Drop in crowdfunding support

The fourth study examined 2012-2015 Kickstarter data from nearly 22,000 crowdfunding projects. The researchers coded the founders’ perceived race based on their profile photos, and then examined fundraising success rates. Consistent with the experimental results, they found that the percentage of perceived-Black founders who met their funding goal fell from 19% to 15% in the 30-day periods following a series of widely publicized, racially charged deaths—a 21% decline compared to the month before each episode. The cases started with George Zimmerman shooting teenager Trayvon Martin in 2012 and ran through Sandra Bland’s 2015 suicide in jail following a traffic stop arrest.

Gorbatâi says these findings are ripe for further research, including whether positive media coverage involving African Americans leads to less discrimination, even though racial awareness is heightened, and whether other events than the Starbucks incident would yield different responses. For now, it sheds some light on why the empathy that Black Lives Matter inspires is often fleeting.

“We post memes with hashtags like #BLM and write messages of support on social media profiles, but it doesn’t necessarily translate into shopping at, or investing in, Black-owned businesses,” she says. “It’s important to understand why that is and learn how we can challenge and change this pattern of inequity and inequality in a durable fashion.”

Why insisting you’re not racist may backfire

Close up of white man in suit holding a poster that says "no racism"
Credit: Yacobchuk for iStock/Getty Images

When you insist you’re not racist, you may unwittingly be sending the opposite message.

That’s the conclusion of a new study by three Berkeley Haas researchers who conducted experiments with white participants claiming to hold egalitarian views. After asking them to write statements explaining why they weren’t prejudiced against Black people, they found that other white people could nevertheless gauge the writers’ underlying prejudice.

“Americans almost universally espouse egalitarianism and wish to see themselves as non-biased, yet racial prejudice persists,” says Berkeley Haas Asst. Prof. Drew Jacoby Senghor, one of the authors. “Our results suggest that the explicit goal of appearing egalitarian might blind people to the possibility that they could be communicating, and perpetuating, prejudicial attitudes.”

Co-authored by Derek Brown, PhD 24, and Michael Rosenblum, PhD 20—a post-doctoral scholar at NYU Stern School of Business—the study builds on past research finding people’s racial prejudice “leaks out” through nonverbal behavior, such as facial expressions or physical distance. In a series of experiments published in the Journal of Experimental Social Psychology, the researchers looked at perceptions based solely on written content.

They selected a group of white participants, screening out the small percentage who expressed overt prejudice, and scored subjects’ racial attitudes with two widely used assessments. The subjects were then asked: “Do you believe that all people are equal and should have equality of opportunity? Why or why not?,” and “Are you prejudiced toward Black people? Why or why not?” A second group of white participants, asked to read the written responses, accurately estimated how the writers had scored on the prejudice scale.

Linguistic cues

In a second experiment to parse out whether people were signaling racial attitudes intentionally or inadvertently, they asked one group to answer as honestly as possible and another group to answer “in the least prejudiced way possible.” There was no difference to the readers, who accurately scored both groups’ answers—indicating that the writers were unaware of how they came across.

“That gave us some confidence that people are naturally trying to come across as egalitarian, but something about the language they choose is betraying them,” Rosenblum said.

What were those linguistic cues? The most powerful indicator, they found, was language that dehumanized or objectified African Americans—for example, “I have a great relationship with the Blacks.” Other characteristics such as defensiveness, references to personal responsibility, or a belief that equal opportunity exists were strongly associated with higher levels of prejudice, and cues such as focus on equity or an acknowledgement that inequality exists were associated with lower levels of prejudice. Interestingly, references to being colorblind or mentions of personal contact with Black people weren’t indicative of the white participants’ attitudes.

“This demonstrates that peoples’ use of the cues are meaningful not only for how prejudice is expressed, but also how egalitarianism is perceived,” said Brown.

Contagion effect

A third experiment had a sobering result. The researchers found that white participants reported greater prejudice towards Black people after reading statements from the self-avowed white egalitarians who scored high on underlying prejudice. In other words, the readers mirrored the attitudes of the writers, even when they identified themselves as ideologically dissimilar (conservative vs liberal).

“We don’t know whether reading other people’s views gave them permission to express more prejudice, or whether they thought that this is the norm and their actual prejudice level changed, but there seemed to be a sort of contagion effect,” Rosenblum said. “One of the lessons here is that words carry weight. It does seem that this is one way that prejudice is unwittingly spread.”

 

 

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