Indians in the USA unfairly get jobs set aside for minorities
Yesterday, at the annual meeting of Berkshire Hathaway, the New York City (NYC) Retirement Systems sought shareholder support for its resolution asking Berkshire to adopt a policy that “qualified female and racially/ethnically diverse candidates,” be included among candidates considered for nominees for directors and chief executive officers. “Berkshire appears to have no people of color among its directors and CEO,” the resolution stated.
In its defense, Berkshire stated that in 2018, a male manager, who “is ethnically diverse,” was promoted as one of two Vice Chairmen and added to the company’s board of directors. Berkshire was referring to Ajit Jain, its head of insurance operations.
The NYC system’s resolution failed, getting less than 10% of the shareholder votes. It oversees the management of around $200 billion in retirement savings for about 350,000 current and retired city employees, teachers, fire and police staff. Link.
An “ethnic” IIT graduate who has generated billions for Berkshire
Berkshire, with a market value of $444 billion, is a highly reputed American companies run by Warren Buffett, one of the most successful investors. Its businesses range from insurance to railroads, energy, jewelry and candy stores. The company “considers integrity to be an essential for any board candidate. Equally important, we seek business savvy, an owner-responsive mindset and a deep personal interest in Berkshire.”
Jain, 67, who has been at the company since 1986, more than meets the description of a Berkshire director. He has 32 years of experience in managing the reinsurance operations, overseeing the assessment and pricing of many of the largest and most complex risks ever insured. As a result, he has generated billions of dollars of capital for deployment by Berkshire. (In photo, Jain, left, with Buffett.)
In 1972, Jain graduated with a B.Tech. in Mechanical Engineering from IIT Kharagpur. Six years later he got an MBA from Harvard University. Before joining Berkshire, he held various positions at the management consultancy, McKinsey & Co. Link
Jain, who owns about $123 million in Berkshire stock, was paid a total compensation of $19 million in 2019 and $18 million in 2018. Link
Goal was to help disadvantaged Asians not Indian professionals
Jain, like chief executives of Google, Microsoft, IBM and other successful Indian professionals in America, deserves his success at Berkshire. So, given his skills and meritocratic achievements, it may be embarrassing for him to be displayed as evidence of an ethnically diverse leadership and board at the Berkshire Hathaway.
Since the 1970’s, Democratic and Republican administrations and the courts have supported setting aside jobs and business contracts for minorities: African Americans, Hispanics, Native Americans, Asians as well as women.
The original goal for including Asians among minorities was to help uplift the historically disadvantaged people from Hawaii, Guam, Samoa and other U.S. jurisdictions in Asia and the Pacific, descendants of nineteenth century Chinese railroad workers and Japanese Americans in internment camps during World War Two.
Hired for skills or for being a minority?
Due to political, legal and lobbying efforts, the category of Asian minorities has expanded to include recent Asian immigrants, especially Indians and Chinese. A wide range of employers, from large companies like Berkshire to local contractors, colleges, schools and governments, facing pressure to prove ethnically diverse hiring, show case Indians on their staff.
As in the case of jobs, business contracts are also set aside for minority and women owned small firms by federal and state government agencies, train and road transport services, airport and port operators, educational institutions and several private companies, especially in government regulated businesses like phone, gas and electric utilities, construction, banks and financial services.
Unfairly getting minority business contracts
The total value of business contracts set aside for minority and women owned small companies is quite large, likely well over $100 billion a year. In 2018, for instance, the New York City administration alone publicized that it was purchasing $17 billion of goods and services from minority business owners during that year.
Many Indians seek and secure jobs and business contracts set aside for minorities, because it is relatively easy to qualify compared to competing with the general pool of applicants. Publicly available data shows that most Asian Americans getting minority business contracts are recent immigrants from Asia, who suffered no historical discrimination.
In 2016, for instance, a study done on behalf of the Ohio Department of Transportation found that companies owned by those from India and nearby Asian countries got more than twice the amount of minority contracts than they ought to have gotten, based on the number of such applicants. In contrast, African Americans got less than a third of the contracts that they should have received and Hispanics only a fifth. The study examined 22,000 contracts and sub-contracts totaling $7.6 billion awarded by the Ohio department between 2010 and 2014. Link
Minorities due to geography of origin
In 2015, according to another study, 29 of the 45 minorities who got business contracts from the New York City region’s Metropolitan Transport Authority were from South Asia, mostly Indians. That year the MTA awarded $50 million in contracts to minorities. Link
As in the above cases, greater disclosure of data will likely reveal that it is mostly recent immigrants who get the jobs and contracts given to Asian Americans. They compete unfairly against Blacks and Hispanics. The only reason they qualify as a minority is due to geography, namely their being from Asia.
Given their economic, education and social background, most of the Asian minority business contract winners will fail a social and economic eligibility audit. Their businesses will not meet the American government’s definition of a minority business as being "small disadvantaged businesses…owned and controlled by socially and economically disadvantaged individuals.”
Photo: IIT Kharagpur Alumni Association, Link
