'Having diversity in the workforce and among leaders isn’t just about doing the right thing, it also makes economic sense, according to analysts at Bank of America Corp.'
If U.S. business and government leaders had decided more than 30 years ago to take action on diversity and inclusion, about $70 trillion would have been added to the nation’s economic output, said Haim Israel, the bank’s head of global thematic investing research, in a report published Tuesday.
Gender and racial biases lead to persistent labor market disparities and limit the economy, Israel said. Companies in the S&P 500 Index with above-median gender diversity on their boards generally report a 15% higher return on equity, and those with ethnically and racially diversified workforces tend to show an 8% higher return on equity, according to Bank of America’s research. More diverse companies also encounter lower earnings risks relative to less-diverse peers.
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