Identity Tax Inflation: The Personal Costs of DEI Cuts

In 2020, major corporations pledged 50 million dollars to fight racial injustice and to increase the representation of diverse groups within their leadership teams. These commitments were affirmed with public inclusion statements denouncing bias and the immediate hiring of, in many cases, their first Diversity, Equity, and Inclusion professional.?

The first 12 months following the anti-racism social media blackout opened the door to conversations about intersectionality and the challenges people from historically excluded groups were experiencing at work.

In many cases, these discussions were led by under-resourced DEI practitioners tasked with managing a variety of complex responsibilities, including:

• Identifying gaps in diversity, equity, and inclusion within the organization
• Setting clear DEI goals and objectives that align with the organization's strategic plan
• Creating recruitment campaigns to attract and retain diverse applicants
• Implementing policies, procedures, and programs to foster inclusion
• Investigating employee complaints and addressing workplace discrimination

Now, as corporations reduce their DEI commitments, cut funding, and eliminate initiatives, the progress of the past four years is stalling.

This regression places the burden of advocacy and inclusion on those most impacted by discrimination.

"What is an Identity Tax?"

This work is referred to as "identity tax" or "cultural tax ," originally coined by Amado Padilla in 1994, which refers to the extra emotional, mental, and sometimes physical burden that individuals from historically marginalized backgrounds bear in organizational settings.?

This tax stems from dealing with microaggressions, biases, stereotypes, and the pressure to assimilate into dominant norms.

Examples of identity tax include when the only Black staff member is asked to educate their colleagues about racism by sharing personal experiences or when a wheelchair user is expected to speak on behalf of the entire disabled community.

In short, when organizations and institutions remove positions and programs meant to foster inclusion, their staff from historically marginalized backgrounds will ultimately pay the price through emotional labor and an increased workload.?

The Costs of Identity Taxes?

Organizations that do not have staff dedicated to advancing equity-centered policies place their workers in a precarious position to experience:

• Professional pressure wherein individuals are expected to educate others about diversity issues, adding unpaid labor that can distract from their primary responsibilities and hinder career growth.
• Performance and innovation impact whereby managing identity-related stressors reduces cognitive capacity, affecting job performance and limiting creative contributions.
• Decreased job satisfaction and engagement stemming from feeling undervalued or not belonging, leading to higher turnover rates.
• Isolation and emotional strain that causes stress, anxiety, and burnout.

While creating inclusive workplaces is a collective responsibility, organizations must continue (not cut) investments in DEI staff, policy development, and ancillary education to alleviate the identity tax paid by impacted groups.??

Within four short years, the magmatic endorsement of DEI programs in 2020 slowly devolved to disinterest in 2022 when related roles began being cut, to a full-on backlash in 2024 with the dissolving of entire departments.?

The result of these cuts sends the message that workplace inequity is not mission-critical, and the people harmed can only be of value if they uphold and normalize the exclusion of their identities.

Employees from marginalized groups have had to overcome the stereotypes and biased barriers to earn the positions they hold, and identity tax is a cost they should not be required to continue paying.

The Future is Inclusive - Are You Prepared?

Week after week, headlines trend with the names of companies who are ending their DEI initiatives to focus on more immediately lucrative endeavors. This decision is as irresponsible as it is short-sighted.?

Ignoring systemic issues does not make them go away, and organizations seeking a long-term competitive edge will continue this work, ensuring they can attract, secure, and retain the top talent of workers and consumers from diverse groups.?

Corporations committed to carving pathways of inclusion see and value their employees' perspectives and understand that inclusive contributions are necessary to navigate current and future global markets.

Raven Solomon Enterprises (RSE) is a Diversity, Equity, and Inclusion (DEI) education and consulting firm dedicated to helping organizations integrate DEI by fostering exploration, motivation, and activation. Offering a wide range of services—Keynote Speaking, DEI Learning and Development, Strategic Advisory, and Leadership Coaching—RSE empowers organizations to create more inclusive environments and drive meaningful change.