Ethnic-identity professional organizations, such as Unity: Journalists of Color, Inc., have become among the most prominent journalistic voices in contemporary US newsrooms. Supported by major foundations and media companies, this diversity journalism movement has focused on two primary goals: increased employment of non-white journalists and more news attention to ‘communities of color’. While these goals have been partially achieved, the movement has paradoxically also contributed - by providing ‘progressive’ political cover to marketing-driven transformations of the media industry - to actually reducing the diversity of ideological perspectives in the news. Drawing on research on US news coverage of immigration between the 1970s and 1990s, linkages are made between the increased journalistic valorization of ethnic/racial identities, the rise of multi-cultural marketing, and a sharp decline in media attention to economic inequalities and labor perspectives.