Giant retailer Costco who is expanding their Australian operation appear to be heading for a head on fight with the Trump administration, over their woke diversity, equity and inclusion programs.
Brands such as Amazon, Google, Microsoft, Harley-Davidson McDonalds, and Costco arch rival Walmart, have all moved to ditch their DEI programs but not Costco whose board appears to be taking a stance that could see them in a head on fight with the Trump administration in the USA.
Costco management have defended their DEI programs claiming they are legal, saying that “our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary.”
The left wing woke DEI programs, which were key business initiatives during the Biden Democrats time in office are being dumped right round the world by US Companies including here in Australia.
Observers claim that Companies are realising that they failed to deliver bottom line gains and were an “unnecessary cost.”
This week President Trump changed the laws in the USA claiming that the Biden Administration forced illegal and immoral discrimination programs, going by the name “diversity, equity, and inclusion” (DEI), into virtually all aspects of the Federal Government, in areas ranging from airline safety to the military. This was a concerted effort stemming from President Biden’s first day in office, when he issued Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” the White House Press Release read.
He then abruptly banned on all government DEI programs while standing down and then dismissing employees involved with them from their jobs.
Costco is run by a predominantly white, male executive team, who are fighting a proxy proposal from a conservative group asking Costco to detail the risks of its DEI efforts.
The support for a DEI program comes at a time when Donald Trump’s new administration is trying to root out DEI programs from business organisations and Federal Government departments.
Last night he reiterated his stance during an address to world leaders gathered in Davos describing DEI policies as “absolute nonsense.” He added: “America will once again become a merit-based country.”
Costco recommended that shareholders reject the measure put forward by the group who are backing Donald Trump policies.
The Costco fight comes as companies cut back on their DEI efforts after conservative activists mounted legal challenges against such programs in the wake of the Supreme Court’s decision to ban affirmative action in college admissions claims Bloomberg.
Anti-DEI activists are now targeting consumer businesses around the world with a Coalition Government in Australia tipped to back similar policies to Trump if they get elected.
Trump, has already asked department heads in the new Federal Government to identify large companies or institutions to investigate for DEI programs that might “constitute illegal discrimination or preferences.”
Costco “could have chosen to roll back as other companies did when approached by those groups. But they didn’t,” Nadira Narine, senior director of strategic initiatives at the Interfaith Centre on Corporate Responsibility, told Bloomberg.
Between 2020 to 2023, the share of Black employees at Costco slipped to around 9% as Hispanic workers rose to 32% of the workforce, what’s not known is how many of these workers were illegals from South American Countries.
In its defence of its policies, Costco said that diversity among its employees and suppliers helps support its increasingly diverse customer base, enabling members to have a shopping experience akin to a “treasure hunt.”
Members also prefer to see people “like them” working at Costco outlets, the firm said.
Costco Australia. Photo: ADCO.
Costco’s focus on membership plans has also historically insulated the company from macroeconomic conditions because its customers pay a membership fee and tend to be more affluent.
The US National Centre for Public Policy Research (NCCPR) is asking Costco to measure whether there is a business risk to having a DEI program now that such programs are confronting legal and social media challenges from conservatives.
NCPPR is taking similar proposals to other big companies including Apple, Hewlett Packard, and other major US consumer electronics Companies.
Costco claims that NCPPR was one of the very groups creating the anti-DEI sentiment.
They claim that the “proponent’s broader agenda is not reducing risk for the company but abolition of diversity initiatives,” Costco added.
Ethan Peck, deputy director for NCPPR’s Free Enterprise Project, said that Costco’s public stance is unusual.
Companies opposing NCPPR’s proposal don’t typically go so far as to directly question the group’s motives, he said.
Costco management in Australia have not commented for this story.
