Intersection: Asian Americans speak out

DELIVERING ON DIVERSITY, GENDER EQUALITY, AND INCLUSION

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In this issue, we look at a bold move by Asian American executives, the origins of Asian American and Pacific Islander Heritage Month, and the pandemic's outsize toll on older entrepreneurs of color.

THE ZEITGEIST

Putting plans into action

person talking on the phone and looking at her laptop, next to a child.

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Laying the foundation. Last week, a group of leading Asian American executives launched the Asian American Foundation, an organization aimed at increasing opportunities for Asian Americans and Pacific Islanders (AAPI) and putting a stop to anti-AAPI violence and discrimination. The foundation's board pledged $125 million—the biggest philanthropic commitment ever made in support of AAPI groups and causes—and a range of partners (including McKinsey) together pledged another $125 million. A 2019 McKinsey analysis showed that Asian leaders made up just 3 percent of Fortune 500 CEOs—half the Asian American share of the US population. To advance workplace equity, organizations should start by tracking representation along the promotion pipeline, identifying where there are drop-offs, and asking why those drop-offs are occurring. Experiences can vary significantly across subgroups—which means collecting disaggregated data can yield important insights.

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A month years in the making. Asian American and Pacific Islander Heritage Month started when one woman saw a problem: in 1976, Jeanie Jew attended the US Bicentennial and found that AAPI contributions, achievements, and history were not recognized. This mattered to Ms. Jew on a personal level; her grandfather, M.Y. Lee, had immigrated to the United States from China and had helped build the first transcontinental railroad. He was later killed during a period of heightened attacks on Asian Americans. Ms. Jew came up with the idea for a heritage month and cofounded an organization to push for its establishment. More than a decade later, in May 1990, Ms. Jew finally achieved her goal. Today, AAPI leaders are renewing the call for their history to be taught and for their communities' diversity to be recognized. One potential starting point for those looking to learn more: Asian Americans, a film series on how Asian Americans have shaped—and are continuing to shape—the history of the United States.

THE FACTS

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The pandemic has taken an outsize toll on older Asian American entrepreneurs. Active business ownership among those 45 and up fell by nearly one-fifth between January 2020 and the start of this year. And many more businesses may be in trouble: four in five Asian-owned small employers said in the fall that they were struggling financially. Asian American-owned businesses employ more than five million workers and contribute more than $900 billion to US GDP each year. Business ownership can also be an important source of upward financial mobility. It will take quick action from decision makers across sectors to prevent more closures and shore up business owners of color—including Black, Hispanic, and Latinx entrepreneurs, who have also experienced disproportionate losses. Two things large companies could do: seek out minority-owned suppliers, and pay them early.

Chart of declind in business ownership among older US entrepreneurs from Jan 2020 to Jan 2021

— Edited by Julia Arnous, an editor in McKinsey's Boston office

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