The overlooked contributions and hidden challenges of Asian Americans

Asian Americans play a key role in creating a more sustainable and inclusive economy. A new report explores the challenges this group faces and how companies can better support them.

Asian Americans represent the fastest-growing ethnic group in the United States, one that is projected to almost double in the next 40 years. Although often stereotyped as so-called model minorities who achieve above-average levels of socioeconomic success, Asian Americans have varied economic and employment outcomes and require specific support from their companies, according to a new McKinsey report, Asian American workers: Diverse outcomes and hidden challenges.

In this episode of the Future of America podcast, host Kweilin Ellingrud, a McKinsey senior partner and coauthor of the new report, joins fellow coauthors Michael Chui and Jackie Wong to discuss their latest research, which focuses on the challenges that Asian Americans face in the workplace. The authors share a behind-the-scenes look at the report and key findings that surprised them. They debunk some of the well-known myths about Asian Americans, explore the challenges they face, and identify opportunities for companies to create more inclusive work environments for this demographic. The following transcript has been edited for clarity.

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The overlooked contributions and hidden challenges of Asian Americans

Kweilin Ellingrud: Welcome to McKinsey’s Future of America podcast, where we explore how we can build a future that drives sustainable and inclusive growth. Join us in conversation with leaders who are accelerating progress to grow, broaden, and sustain prosperity for more Americans.

I’m Kweilin Ellingrud, your host for today. I’m a McKinsey Global Institute director and a senior partner based in Minneapolis. I coauthored the report that we’ll be discussing today: Asian American workers: Diverse outcomes and hidden challenges.

My coauthors, and our guests for today, will also be joining us: Michael Chui and Jackie Wong. Michael is a McKinsey Global Institute partner and a partner at McKinsey. And Jackie is a consultant at McKinsey. Before we start, I want to give our listeners a little bit of background on this episode.

This episode is going to be a bit different from our other episodes. Our discussion this week will focus on giving you, our listeners, an inside look at our latest research on Asian American workers. We’ll share some of the key learnings from our recent report, as well as the insights that came from our research, with the hopes that it will spur conversations in your organizations and spark an interest to learn and do more. Michael and Jackie, welcome and thank you for joining me in discussing this very important report.

Michael Chui: Thanks for having us on.

Kweilin Ellingrud: Michael, I’ll start with you. Can you tell our listeners a bit more about your background, your role at McKinsey, and what made you get involved in this research?

Michael Chui: I started at McKinsey after grad school, after getting a PhD. I started in McKinsey Digital. I’ve been at McKinsey for a while, and a lot of us have had multiple careers. I’m now a partner at the McKinsey Global Institute, which is McKinsey’s research arm. And you’re a director of that part of our firm.

I’ve been privileged to be able to do research on a number of topics and have done an increasing amount on diversity topics. I actually cosponsor our affinity group Asians at McKinsey. It was a little bit of a natural transition to working this report—when Jackie came to talk with me, to do research on Asian Americans—because I identify as an Asian American.

Kweilin Ellingrud: Wonderful. Jackie, you’ve got one of the most eclectic backgrounds I’ve heard of, at least for a consultant, perhaps. Can you tell us a little bit more about yourself?

Jackie Wong: Oh, boy. It’s going to take a long time, isn’t it? No, I’ll do the short version. I am a retired architect and also a figure-skating analyst in addition to being a consultant with McKinsey. I am a first-generation Chinese immigrant, born in Hong Kong, raised in LA, and spent the greater part of my life and the entire part of my career in the US.

Getting into this research was, in a lot of ways, a natural thing for me because I have been doing a good bit of research on the diversity, equity, and inclusion front, starting with our Race in the Workplace study a year ago, which looked at the experiences and representation of Black workers in the US. 1 That spurred my thought that we should do one of those for every major race and ethnicity group.

I feel like I am in a unique position in that sense, to be able to put together something that is for Asian American workers, especially given the challenges over the past couple of years. And also, a nod to our report, the hidden challenges that we face as a group—our being labeled as a monolith a lot of times ends up masking a lot of these challenges.

Digging into the research

Kweilin Ellingrud: I can absolutely relate to both of your backgrounds in different ways. As a Chinese American and Asian American woman, I absolutely relate to some of the challenges you discussed. Let’s dig into our report: Asian American workers: Diverse outcomes and hidden challenges.

For some context for our listeners, the report was based on 2019 and 2020 data from the US Bureau of Labor Statistics and the US Census Bureau. We also used data collected from McKinsey’s latest Race in the Workplace and the 2021 Women in the Workplace report. 2

Jackie, you’ve been deeply involved in both of those reports and in leading our Race in the Workplace work. This topic is especially critical, because over the last few years, we’ve seen a lot of challenges in the Asian American community. Many of these challenges have been long ignored or unaddressed. As we wrote about in the report, the Asian American population is the fastest-growing population among ethnic groups and racial groups in the US.

I was surprised in our research that the population of Asian Americans is projected to almost double in the next 40 years. As we have more and more Asian Americans joining the workforce, it’s important that we have policies in place to make sure they are supported, that they are getting the most out of their careers, and that companies are getting the most out of that talent. Michael and Jackie, what specific insights really stood out to you in this research?

Jackie Wong: For me, the magnitude of the numbers is something that really stood out. When you said the Asian American population is going to double in the next 40 years, we can look back at the last 20 years, and it’s doubled in the last 20 years.

I was particularly struck because I immigrated to the US in 1991. In 1991, Asian Americans were 3 percent of the US population. Now, we are 6 percent of the US population. In 40 years, we’ll be almost 10 percent of the population. The fast-growing nature of this population has automatically or naturally led to a very wide range of people because of the different countries of origin, the different cultures, and the different immigration statuses.

One of the things that we found in the report was that 75 percent of current Asian American workers are foreign born. I am one of those people. It really shows how vast this population is and how much more varied and diverse this population is given credit for, because we often talk about this population as a monolith.

Michael Chui: What I’d add, too, is we’re a community which often suffers from being invisible in many ways. As Jackie was saying, there are 20 million Asian Americans now and growing very quickly. The increasing diversity within our community is something interesting that I found as we were doing this research, as we were looking at East Asians, South Asians, and Southeast Asians who are here, and at the different waves of immigration that brought people here.

When we look at history, Asian Americans have been in this country for well over 100 years. There are generations of families that have been here, as well. We can get into the economics of it also. Asian Americans are doing well in many cases, but we have almost two million people living below the federal poverty line who are Asian American. There’s a lot going on here. Again, I think in many cases, we’re invisible to other folks, and many Asian Americans are invisible to one another. Hopefully this report will start a conversation.

Asian Americans are doing well in many cases, but we have almost two million people living below the federal poverty line who are Asian American.

Michael Chui

Dispelling the harmful myths about the Asian American community

Kweilin Ellingrud: Both of you have talked about Asian Americans often being spoken of or thought of as a monolith, a single, uniform group of people. And we know that that characterization is harmful. It’s also inaccurate, right? It ignores the different experiences and outcomes and the diversity across Asian American subgroups.

In our research, we had some interesting and, I think, inspiring findings around educational attainment and economic outcomes. Asian Americans have some of the highest rates of intergenerational economic mobility. As we looked at it, one out of four Asian American children born into families in the bottom quintile of household income actually joined the top quintile of household income as an adult. That’s much higher than any other subgroup.

Another figure that really stuck with me from the research showed how different each subgroup is in terms of their attainment of education. For South Asian foreign-born noncitizens, nearly 80 percent of them achieve their bachelor’s degree or higher. However, for Southeast Asian foreign-born noncitizens, only 34 percent of them did.

So on the one hand, four out of five in some subgroups achieve a degree. On the other hand, only about one out of three do. Those are pretty dramatically different educational outcomes across Asian American subgroups. Michael and Jackie, how do you think about understanding the diversity of these subgroups across the Asian American community?

Michael Chui: We have to be humble about what we’ve found in the research and how much more work there is to be done. We’ve observed a number of these great variations in outcomes for different people, whether it’s between different subgroups in terms of where they came from or where their family backgrounds are from, as well as in terms of gender intersectionality—as you noted, East Asian women versus South Asian women or Southeast Asian women versus Southeast Asian men in those categories.

But why is it important? Take it from a public-policy angle. If you’re thinking about trying to address disparities in COVID-19 response, we’ve heard stories about people saying, “We don’t have to worry about Asians.” If you actually look at who was disproportionately affected, in some cases, those were Asian Americans.

I mentioned poverty before. There are more subgroups or ethnicities of our Asian American community that are below the White poverty line and the overall national poverty rate than there are above it.

What this means is you have to pay attention if your goal is to try to help advance people. You have to pay attention if your goal within an enterprise is to be able to take advantage of the talent that’s available to you, whether it’s in recruiting, whether it’s an advancement, whether it’s supporting people.

If you’re running a company, you want the best talent. And if you’re going to compete for it, you want to be competing for Asian talent, as well. But we do see some real challenges in the workplace. That’s detrimental, not only to those workers but to our companies’ performances, as well.

Jackie Wong: To Michael’s point, this is really the tip of the iceberg. Every single time something about Asian Americans comes out in research form, it’s, like, “OK, this should be the start of a conversation.” I feel like we’re restarting the conversation a lot.

I hope that, yes, we restart the conversation but also that we continue to grow the conversation and be able to have more data, be able to look into these different groups and intersectionalities more. If you look at it, Asian Americans are fairly well off on average, then you look at the disparity of income, and you see that the Asian American population actually has the largest income disparity among any of the races and ethnicities in the US.

So you can’t take it at face value. If we—we as in the collective society—are unable to get the larger set of data and be more granular about how we look at this population, we’re never going to be able to continue to look into the challenges that we keep talking about.

Michael Chui: Kweilin knows this from our work together at the McKinsey Global Institute. I often say to our teams, “Don’t just look at the summary statistic. Look at the full distribution.” Because the same average can mean very, very different things if you look at the entire distribution. And that’s definitely true of Asian Americans.

Challenges facing the Asian American community

Kweilin Ellingrud: One of our goals in this research was to explore some of the biggest challenges facing Asian Americans today. Exactly to the point that you’ve both spoken about, the distribution of income is quite broad. On average, Asian Americans are overrepresented in higher-wage occupations. One out of three Asian American workers makes more than $75,000 a year compared with about one in six for White workers.

But even when you look at those Asian Americans who are earning relatively more, they are in high-paying professions, there is still a significant wage gap: about seven cents on the dollar for those earning a median wage of $100,000 and above. That’s one of the gaps and challenges facing Asian Americans. In your view, what do you think are the largest challenges facing Asian Americans today?

Jackie Wong: That’s a broad question. I do think it’s a combination of many things. The drop-off in representation in more-senior leadership levels—that was something that we found when conducting interviews with Asian American workers across all different types of job levels.

A common theme that we heard, and something that resonates a lot with folks, is the fact that Asian American employees in the US just don’t see themselves in their leaders, especially in senior-executive leaders. If you disaggregate that population even more than just “Asian,” you’re seeing that disparity quite a bit.

Part of what you were talking about is being overrepresented in high-wage occupations. That often ends up being in the entry-level or the sort of earlier manager level folks in the corporate pipeline. So how do you think about supporting and advancing Asian American workers and encouraging folks to be able to advance and not feel like they are just good at doing but also good at leading? Because they actually are good at leading. So that’s something that is a huge challenge and continues to be, based on all the research that we’ve seen over the past ten, 15, 20 years.

Michael Chui: I want to highlight one other thing. We do talk about these advancement challenges. We talk about this pay equity even for these higher-earning occupations, whether it’s in healthcare or STEM fields, where, often, Asian Americans are represented at higher levels than their overall representation in the population.

But there’s a complementary fact, Kweilin, which we found in the research, which is that there are a number of lower-paying occupations where Asian Americans also are represented more highly than their share of the population. If you look at personal care, or if you look at food service occupations, those are, in some cases, very low-paying occupations, very challenging occupations, ones that, in many cases, are made up of essential workers, were very affected by the pandemic.

Those are also places where Asian Americans are overrepresented. You do have this bit of a barbell, where you have overrepresentation of workers in some higher-paying occupations who, despite that, are being paid less than their White colleagues are in the same occupations.

You also see overrepresentation in a number of lower-paying occupations. If you look at the full distribution, you could have this same kind of average but very different distributions within it.

Kweilin Ellingrud: Absolutely. The other thing related to representation across the entire talent pipeline is that in companies across the US, there is a 40 percent drop from the entry level all the way to the C-suite—to the direct reports of the CEO. That significant of a drop for Asian Americans is much, much more dramatic than for their White peers.

It’s even worse—in fact, almost doubly worse—for Asian American women. Looking at the cross-industry average in the United States, we see a 70 percent drop in terms of representation for Asian American women from the entry level all the way to the C-suite.

In fact, for every two Asian American men who are promoted to manager or senior manager, only one Asian American woman is. For the promotion rate to the C-suite level, it’s one Asian American woman for every six Asian American men. Significant gaps are there in terms of gender promotion rates for Asians and Asian Americans.

One surprising finding for me was that Asian Americans have the largest level of income inequality across races in the United States. In fact, Chinese Americans account for almost a third of all Asian Americans living in poverty. Would love to hear your thoughts on what’s driving this wide range of economic mobility and opportunity distribution across Asian Americans.

Michael Chui: I don’t think we know all the answers for why poverty exists, but a number of things come to mind. For instance, as you described, it was a surprise to me, as a Chinese–Canadian American, to see such a high percentage of the Asian Americans living in poverty being Chinese.

Many of these folks are elderly. When you think about that, if you’re dealing with some of the challenges of just being low income and older, and you add on top of that some of the challenges that are associated with being an ethnicity in the minority, and then you walk around Chinatown in many of our large cities, you realize, “Yes, in fact, I see that now. And it was invisible to me before.”

That might be someone who has been here for generations or is an immigrant, but an immigrant who, in many cases, maybe came from a higher-paying occupation in their home country and had to take on lower-paying work here because they were trying to look out for their children.

We also know other subgroups within the Asian American community, among some Bangladeshi, some Burmese, for instance, who came here as refugees. Their starting point was simply lower, and it is more challenging for them. Some folks might be living in the experience of poverty. I think there are lots of reasons why someone might have those outcomes. The question is, how do we support people moving forward?

Organizational approaches to improving representation

Kweilin Ellingrud: What can organizations do to better foster inclusion, promotion, better representation across the entire talent pipeline?

Jackie Wong: A couple things on that. We talk about sponsorship a lot. It is quite the buzzword these days in the corporate environment. When we talk about sponsorship, it really is about leaders who actively create opportunities, whether those are skill-building opportunities or actual promotions or things that folks can do to set themselves up for a promotion.

Those are types of things that companies are really focusing on, especially for people of color. The thing that’s been interesting to me, looking at this data, is that there is a sort of silver lining in that more junior- and entry-level, early junior-manager type—Asian employees tend to feel that they get a good amount of sponsorship at this level and that their sponsorship is effective.

As you get more senior as an Asian American employee, both the level of sponsorship relative to White employees and the feelings of effectiveness of your sponsors actually drops. And that is the case not only for sponsorship but also for inclusion.

You’ve got this sort of inverse relationship of higher job levels and feelings of inclusion and feeling like you don’t have the support, feeling like you are having this sort of perpetual foreigner perception that makes you feel like an outsider.

A lot of the things that a company can do is to really be more inclusive, which is the general way of saying you have to make sure that folks are doing the active allyship and sponsorship and calling out bias, calling out discrimination, and doing those things that allow people to feel like they can be themselves. For Asian Americans, even those who are actually born in the US, being inclusive means not making them feel like they are foreigners in their own country.

For Asian Americans, even those who are actually born in the US, being inclusive means not making them feel like they are foreigners in their own country.

Jackie Wong

Solutions for more sustainable and inclusive growth

Kweilin Ellingrud: Michael and Jackie, we’ve explored Asian Americans’ experiences, economic opportunity, and inclusion in the workplace and how that differs both by subgroup and by gender. I’d like to shift our discussion to potential solutions that organizations and allies can use to shrink the opportunity gaps and drive better inclusion.

We know that inclusion requires all of us to work together to create better outcomes for the Asian American community. I’d love to hear your thoughts on how organizations can apply insights from our research to create actionable solutions that are going to make a difference in the lives of Asian Americans.

Jackie Wong: I’ll start with the fact that everybody needs to collect more data and collect it in a more granular fashion. I alluded to this earlier. A lot of the data that we see, from companies, especially, is not disaggregated for the Asian population.

When you look at the differences, or when you try to look at the differences among the different groups within the Asian American population, you can’t find them, because you actually don’t know who is who. Especially as the Asian American population continues to grow, especially as folks who identify as multiracial continues to grow, those are really important distinctions to get ahold of. Because you can’t see these hidden challenges without having the granularity of that data. That is a big part of looking at the experiences and looking at what trends are happening in each organization and for the US private sector and public sector as a whole.

Michael Chui: A couple things that I’d add. We experienced this challenge in terms of data just doing the research, that, in fact, it was hard to find disaggregated data to be able to look at the entire distribution. Having that data, now an organization actually has to apply it.

Thinking through some of those critical moments in a person’s professional journey, whether it’s recruiting, whether it’s time for performance assessment, whether it’s making a promotion or an advancement decision—do look at things.

Look at promotion rates for different groups, for different subgroups. Try to understand—if you do see differences, why is that the case? And are those good reasons? Collect data about inclusion. What we saw broadly across the thousands of employees in the service that Jackie manages was that some Asian Americans at more junior levels feel lots of great sponsorship, but at senior levels, there are a lower number of sponsors and a lower perceived effectiveness of the sponsorship that Asian Americans are receiving.

If that’s the case, can you take action in order to support inclusion? Of course, as a cosponsor of an affinity group or an ERG [employee resource group], that’s another avenue through which you can promote inclusion, through which you can promote the ability for people to feel authentic at work.

Some of the survey research shows that Asian Americans, in many cases, experience less feelings of fairness within their organization, feel less feelings of being able to bring their full selves to work—that perpetual foreigner feeling that Jackie mentioned. Organizations have all kinds of levers to try to address those things. I think those are some other areas where an organization can take action.

Kweilin Ellingrud: Jackie, any other solutions or actions you think could help in leveling the playing field for Asian Americans?

Jackie Wong: I just want to add on to Michael’s point about employee resource groups. What we’ve seen in the work that we’ve done with clients is that Asian American ERGs are somewhat new in their existence, in a lot of ways and in a lot of organizations.

The fact that they are still sort of starting up and creating their own missions and figuring all that stuff out—it’s actually really useful for these ERGs to learn from each other, learn from the ERGs that have existed and thrived before them, and not feel like they’re starting from scratch.

That often just leads to a lot of reinventing of the wheel, so that’s a big part of it. I’ve also seen Asian American ERGs be disaggregated into sub-ERGs, within the greater umbrella of an Asian American ERG, that address the different backgrounds, cultures, and experiences of the different groups within that group. For a large organization, that is certainly something that folks can consider doing.

Kweilin Ellingrud: Along the lines of microaggressions, it’s important to be deeply aware of the conscious and unconscious bias that happens. How do we think about leadership? And what does leadership look like in our mind? We’ve been socialized to think that it looks like, perhaps, White male, maybe more aggressive. That could be countercultural for many. How do we think about people’s individual, real impact as opposed to sort of socialized concepts that may be less advantageous for certain groups?

So really digging into the conscious and unconscious bias there can help us all be better allies, especially in our people reviews, and with progression, and in promotion conversations.

Being open to learning

Kweilin Ellingrud: Michael and Jackie, thank you for sharing your insights with us today. I was struck by both the variability in economic outcomes for Asian Americans and also their lack of inclusion and the high poverty rates that we see in some subgroups. We’re wrapping up each of our Future of America episodes with a rapid-fire Q&A. Michael, I’ll start with you. Is there a book or an article you’ve read recently that excites you about a more sustainable and inclusive future?

Michael Chui: Oh, that’s a super hard one. Sorry. This is terrible. I’m not going to give you a good answer. I’m a Twitter user. I find inspiring stuff there all the time. Even stuff that’s challenging. The fact that people are raising the issue, whether it’s a semifunny story about a microaggression—someone wanted to raise that. The ability for people to not be invisible in that way, I find that incredibly inspiring.

Kweilin Ellingrud: Michael, what makes you optimistic that we can achieve sustainable and inclusive growth?

Michael Chui: That we’re all talking about this. That when it comes up, people actually think about it. When they think about it, they realize, “Actually, you need all three. They’re mutually supporting. You can’t have inclusion, you can’t have sustainability, without growth, and all vice versa.” And that makes me very encouraged.

Kweilin Ellingrud: What’s one thing that listeners can do today to help promote sustainable and inclusive growth for Asian Americans?

Michael Chui: Keep listening to this podcast. But, again, be open to learning.

Kweilin Ellingrud: Absolutely. Jackie, over to you. Is there a book or an article that you’ve read recently that excites you about a more sustainable and inclusive future?

Jackie Wong: I love that I’m going after Michael so I can take all his answers. When we were writing this report, I kept referring to a book called So You Want to Talk About Race. 3 It’s a great read that covers a whole lot of stuff and a whole lot of things that you didn’t even necessarily think about.

I think we as Asian Americans talk and think about the model minority myth a lot. And there’s a good part of the general population who maybe have heard that term but who don’t really understand what it means and why it’s harmful and why pigeonholing an entire population into one particular area is not a good thing. So I would encourage folks, if they are interested in reading more about race, to have that as a starting point.

Kweilin Ellingrud: Jackie, what makes you optimistic that we can achieve sustainable and inclusive growth?

Jackie Wong: A little bit different than maybe what you would expect my answer to be, which is that there is more Asian American representation in the media these days, whether it is in sports or other media. I’m fresh off of watching the Emmys last night, and there was, maybe for the first time, real Asian American representation—whether it’s Squid Game or it’s Bowen Yang from Saturday Night Live—there are actually more people who look like us who are in the mainstream media. That’s something that I couldn’t say was the case when I was growing up. And that makes me hopeful that we are moving in a good direction there.

Kweilin Ellingrud: What’s one thing that listeners can do today to help promote sustainable and inclusive growth for Asian Americans?

Jackie Wong: I would say read our report and share it. That would be a great way for us to promote sustainable, inclusive growth. And, like Michael said, keep learning. That’s something that, being in this role, doing the things that I do with DEI [diversity, equity, and inclusion], has opened my eyes to a whole lot of things that I was not privy to before this. So keep learning, keep reading, keep going after the data.

Kweilin Ellingrud: Thank you, Jackie. Thank you, Michael. That was Michael Chui, a McKinsey Global Institute partner and McKinsey partner, and Jackie Wong, a consultant at McKinsey. I’m Kweilin Ellingrud, and the three of us coauthored the report Asian American workers: Diverse outcomes and hidden challenges. You’ve been listening to McKinsey’s Future of America podcast series. Thank you for joining us.

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