Public-Private Split on Who to Hire

California companies stress diversity on job even as state jettisons hiring preferences.

A new dualism is emerging in America society on the sensitive issue of race.

As Congress and a dozen states push measures that would follow the recent lead of California in barring affirmative action in public employment, corporate America - which hires the vast majority of US workers - shows signs of embracing diversity more than ever before.

The apparently divergent trends are indicative of a growing ambivalence in America on how to best embrace one of the founding principles of the melting-pot republic: equality for all.

"I don't see corporations in America responding to the public sentiment of California to throw out affirmative action," says Martin Wymer, a Cleveland-based lawyer specializing in employment discrimination. "For most of the 1990s, virtually every American corporation has launched initiatives in the other direction."

The reasons companies are sticking to and expanding such programs, say business leaders, may have less to do with equality than with the fact that they make business sense.

"People often look at diversity as something we are doing because 'it's the right thing to do,' " says David Coulter, chairman and CEO of BankAmerica Corp., which has about 50,000 employees in California. "But we are running a business and diversity is a business issue."

There is also the fear factor. Recent lawsuits against national companies such as Texaco Inc. for racial discrimination have generated not only bad press, but a threat of boycotts.

"Corporations do recognize that there is a heavy price to be paid if they don't give opportunities to minorities," says Lawrence Otis Graham, author of a book ("Proversity") on diversity in the workplace who regularly surveys company hiring practices.

As with other social and political trends from property taxes to immigration, California will offer a test of how much society may be diverging on affirmative action.

By a wide margin (54 to 46 percent), Golden State voters last fall adopted Proposition 209, ending government programs giving minorities and women preferences in employment, schools, and government contracts. The measure took effect last week, although many universities and others affected say they are delaying implementation until possible rulings by the US Supreme Court.

But while many analysts saw the measure as a sign of changing sentiment, others say Americans harbor more conflicted feelings on affirmative action than the vote suggested - as is evidenced by some corporate actions.

To be sure, many companies are coming to the diversity game late. Others do more talking than promoting. But their diversity actions are widespread and varied.

The initiatives come in the form of outreach programs such as MESA, an idea of Hewlett Packard Corp. in California to encourage young minorities to consider careers in high tech industries by training them in math, engineering, and science while still in junior high.

THEY come in the form of active policies to seek contracts with minority-owned businesses, and in the formation of employee associations for Asians, blacks, and Hispanics.

At more and more corporations, they also come in the form of executive education and development for minorities. At Pacific Gas and Electric, for instance - one of the nation's largest utilities - three corporate vice presidents are minority graduates of such an in-house program.

"My sense is that California voters' formal rejection of preferences and set asides will in no way affect the commitment by corporations in this state to reach out to minorities and embrace a diverse work force," says Gary Fazzino, state government affairs manager for Hewlett Packard. "As this state continues to become more diverse, corporations are searching for better ways to reflect that diversity in their own hiring practices."

Those efforts may end up having far more practical effect than the highly-visible debate over Prop. 209. According to Robert Arnold, associate director of the Center for the Continuing Study of the California Economy, only 1.8 million of California's 13.7 million workers are employed in state and local government, including education.

"There is no question that the far higher percentages of hiring are in the private sector and may reflect what are more widely held values," says Mr. Arnold.

One reason corporate attitudes may be different, and hidden, is the politically volatile nature of the affirmative-action debate. Business leaders have seen the public-relations and economic problems that can result from such an emotional issue.

"Affirmative action is not a subject that our corporate members are anxious to get into," says Bill Hauck, president of the California Business Roundtable. Part of the problem, he and others say, is the potential for misunderstanding. If the practice is framed as "racial preferences," polls show most Americans are against it. But if it is called "affirmative action," most favor it.

Some observers explain the apparent divergence of public and private affirmative-action policies - and voter versus corporate attitudes - as an aberration resulting from California's initiative system. Highly vocal minorities, they say, can set agendas and control public policy debates in ways that obscure and confuse.

"It is very curious to me that we seem trapped in this apparent paradox where government is going one way and corporate California the other," says Jere Jacobs, assistant vice president of Pacific Telesis Group, which has 50,000 employees in California. "It says to me that trying to put a terribly complex issue such as affirmative action on a citizen's ballot is a mistake."

Despite the visible programs in some corporations, experts caution that true corporate attitudes are hard to gauge beneath the public-relations hyperbole.

"Whatever corporations want to do is between them and their shareholders," says Joel Kotkin, a business analyst at Pepperdine University. "They would never say they are backing off [affirmative action] even if they wanted to."

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