US Overhauls Race Data to Add Middle Eastern, Hispanic Categories

(Bloomberg) — People of Middle Eastern and North African descent can place themselves in a distinct group for the first time in government data collection, the biggest change in how the US measures the races of its residents in at least a quarter century.

The moves will also change how Hispanic people are counted in the US so that they are a choice among Black, White and other races, rather than a separate ethnic category, according to a memo released Thursday by the Biden administration.

The shift may mean a more accurate count for Hispanic Americans, who make up an estimated 18% of the US population. Middle Eastern and North African, or MENA, Americans are about 1.5% of the population based on the latest Census estimates.

Individuals will be able to select multiple categories based on the revisions. Afro-Latino citizens, for instance, will be able to select both “Hispanic or Latino” and “Black and African American.” Office of Management and Budget officials, who requested anonymity to discuss the matter, said the changes should produce more accurate data. 

The decision comes as tension over the war between Israel and Hamas has spilled over into US politics and discourse. MENA includes many of the groups affected by the conflict in the region, including Palestinians, Iranians, Israelis, Kurds and people from other Middle Eastern countries, as well as Egypt, Morocco and other North African countries, according to the Census.

MENA would be added as a new category alongside White, Black, Latino, Asian, Native Hawaiian/Pacific Islander and American Indian/Alaska Native. The tallies are used by the Census and the US Equal Employment Opportunity Commission. The numbers determine levels of government funding, eligibility for minority business funds, as well as give a snapshot of diversity in companies and communities, which can also be used to detect discrimination and under-representation. 

The changes are overdue, former EEOC Commissioner Chai Feldblum said in an interview. They are a “good way of reflecting the reality of race and ethnicity in this country,” she said. During her nine years at the EEOC, there were repeated attempts to change how race and gender data were gathered, she said, and none reached final approval. 

The addition of a new minority category may also mean that individuals who identify as MENA could be counted as diverse directors under private programs, such as Nasdaq’s board diversity initiative. The stock index is requiring most member companies to either have one director who is diverse in gender, race, ethnicity or sexual orientation or explain why they do not have that level of diversity. Nasdaq declined to comment, but pointed to the criteria that was used to determine who would be considered a member of a diverse group, and government racial and ethnic categories were one of the criteria.

The boardroom is one area where the new MENA category may have a more visible impact because company boards usually have less than a dozen members. About 0.84% of S&P 500 directors identified as MENA in 2023, and that included 17 boards with multiple MENA directors, according to data compiled by ISS-Corporate, a Rockville, Maryland-based provider of data and analytics to corporations. Fresh Del Monte Produce Inc. and Aadi Bioscience Inc. were among companies with three MENA directors, the ISS data showed. Fresh Del Monte and Aadi Bioscience did not respond to requests for comment.

As an example, Danaher Corp., a medical equipment maker, has two MENA directors who would formally become members of a minority group under the new laws. Danaher has been pressured by shareholders in the past over the lack of racial diversity on its board. The company had no comment, but did not dispute the statistics. The company already points to the MENA members as among diverse directors in corporate filings.

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Shermin Kruse, an Iranian-born lawyer and Northwestern University law professor, said she’s optimistic that a reclassification of MENA as a minority group will help individuals like her more easily break into public company boards. “The current racial and ethnic classification system does mask the presence and contributions of MENA professionals in leadership and particularly in governance roles,” she said in an interview.

Including MENA residents in the White category means the public schools in Dearborn, Michigan, with among the highest population of Arab Americans in the US, are categorized as 90% White, said Rima Meroueh, director for the National Network for Arab American Communities. That makes it more difficult to get the necessary English language support and other services, particularly since a high percentage of the community came as refugees. The same misperceptions affect health-care research and resources, she said. 

Hispanic residents, who have also been counted as a subset of White, have suffered from some of the same classification issues, said Domingo Garcia, president of the League of United Latin American Citizens. He recounted the difficulty of proving a Mississippi police department was inordinately singling out Hispanic motorists because the police were able to classify the traffic stops as involving White motorists. Including Hispanic alongside all the other racial groups should make the count more accurate and that will be important for political redistricting and other government and business decisions, he said.

“It’s very important that we get an accurate number of the actual Latino populations in various cities and states,” Garcia said.

The government has given agencies 18 months to develop implementation plans for the new categories, with an ultimate deadline of five years to be fully compliant. It took companies 10 years to implement the previous revisions that were put in place in 1997, according to Mike Eastman, a partner at NT Lakis LLP and senior vice president of policy at the Center for Workplace Compliance. 

“I do think it would take some time,” Eastman said 

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