President Donald Trump's Council of Economic Advisers said that diversity, equity, and inclusion policies have reduced productivity and economic output.

The White House 2026 Economic Report of the President stated that expected economic benefits from DEI efforts "did not materialize," citing research that found no statistically significant relationship between diversity measures and firm performance, including metrics such as return on assets, return on equity, and total shareholder return.

Instead, the analysis links increased DEI-focused hiring to declining productivity, concluding that such practices "had negative effects on aggregate productivity."

The report tracks a sharp rise in minority representation in management roles after 2015, noting the increase accelerated significantly in the years that followed as DEI programs expanded across corporate America.

It attributed that shift to widespread adoption of DEI initiatives, stating references to DEI became "ubiquitous in American industry" as companies invested heavily in programs, consultants, and new executive roles.

The report noted that the chief diversity officer position, once rare, became the "fastest-growing C-suite executive position" during that period.

Economists involved in the study used federal labor data and statistical modeling to isolate what they described as increases in minority management share beyond expected levels, using that measure as a proxy for DEI-driven hiring.

The report concluded that these increases coincided with declining output per worker and rising inefficiencies in management allocation.

It stated that DEI promotion "has led to inefficient management, raising the cost of doing business," which in turn resulted in companies hiring fewer workers and paying lower wages.

The report added that these effects translated into reduced economic output, stating that "a reduction in output per hour implies a reduction in aggregate output."

The analysis also raised concerns about workplace effects, stating DEI policies can "do a disservice to these qualified minority managers" by contributing to perceptions that hiring decisions are not based on merit.

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