Wall Street is Too White and Too Male
BY EMMA XIANG '22
Home of the New York Stock Exchange, Wall Street serves as the emblem of America’s financial services industry. It’s characterized by skyscrapers, overworked Ivy League graduates, and white men donning Patagonia vests. If The Wolf of Wall Street got one thing right, it’s this: white men run it. In major investment firms and banks like Goldman Sachs, Wells Fargo, and JP Morgan, over 80% of executives are white, and over 70% are men. Women and racial minorities own fewer than 10% of asset management firms despite the firms’ historically similar performances. Wall Street is notorious for being a white men’s club, and this historical dynamic has hindered marginalized groups from succeeding in the industry. By diversifying financial workforces, companies will bridge wealth disparities, promote financial literacy, and deconstruct America’s skewed social hierarchy.
White men don’t control Wall Street through higher stock trading returns; they control it through violence and denying financial services to minorities. For example, in the 1920s, Tulsa, Oklahoma was home to the Greenwood District. Known as the Black Wall Street, this district supported many affluent, educated Black families. However, during the 1921 Tulsa Race Massacre, mobs of white residents attacked the district, robbing it of its wealth. The riots left 10,000 Black residents homeless and inflicted more than $2.25 million ($32.65 million today) in property damage. Further, banks have historically refused to lend money to low-income Black families through redlining; this practice prevents people living in “dangerous” neighborhoods (which often consist of racial and ethnic minority groups) from accessing financial services. If people lack access to the resources that help break cycles of poverty, they cannot be expected to cross the boundaries placed by more privileged, powerful groups. Moreover, financial literacy is predominantly taught in wealthy white families because they have the money to invest, while underprivileged families cannot partake in investments and consequently may not teach their children general financial knowledge, fueling the cycle.
Even when marginalized communities overcome the barriers to obtain economic knowledge, the social dynamic of their workplaces exclude them from promotions or executive positions. Financial services companies largely run on an apprenticeship model, which allows managers to favor trainees with similar backgrounds—that is, attending the same elite private school or having the same last name. This enables white men to be hired and promoted more frequently than disparaged groups. Within companies, social dynamics also heavily favor white men; networking and client meetings often occur in bars and on golf courses. These spaces cater to white men, allowing them to bond over similar interests. Making up the vast majority of executives, white men also control the boundaries of workplace culture. Women and minorities, especially those in higher positions, often find it difficult to break these boundaries: their ideas are dismissed and they are perceived as less intelligent than their male counterparts. Wall Street’s social hierarchy cements the white man’s position at the top, ultimately preventing qualified women and minorities from becoming executives and CEOs in finance. The lack of representation then discourages youth from joining the industry, as they see the lack of opportunities constantly shown to them.
The white man’s control of Wall Street has harmed racial minorities and women, and it will only exacerbate wealth gaps by delaying universal financial literacy. Indeed, discriminatory practices dismiss the efficacy of diverse management teams: an increase in perspectives allows investors to make more calculated and comprehensive decisions when cultivating portfolios. Fortunately, in recent years, many financial companies have begun diversifying their teams. Wells Fargo has pledged to double Black leadership over the next five years, and an all-female team of bankers from JP Morgan and Goldman Sachs brokered a major Spanx deal. The movement to increase female and minority representation in Wall Street must continue in order to reduce wealth inequality and create a new generation of diverse financial leaders.