Economic Community Development

Advocacy for Minority Contractors

Dr. Lana Turner-Addison, November 27, 2012

Goal

Eliminating Barriers that prevent the growth of African-American owned and minority owned businesses.

Minority-owned businesses is defined as a business that is 51 percent owned and controlled by one or more members of the following minority groups (African Americans, Asian Pacific Islander Americans, Indian American, Hispanic American).

Economic Benefit of Building Wealth for Minorities

• Contributes to creating lasting, and higher-paying jobs.

• To provide a cost-competitive and highly capable human capital and supply base for consumers, corporations and government.

• Providing access to beneficial and sustained procurement opportunities for both smaller and larger minority-owned businesses.

• Fosters and develop future leadership to further support economic community well being and wealth building amongst minorities, specifically African Americans.

Economic Challenges facing Minority Business

1. Government pressures to dismantle set-aside programs have escalated.

2. Government pressure to dismantle Affirmative Action Programs.

3. Lack of commitment to support the creation and development of more MBE’s.

4. Global Competition5. Lack of Enforcement of

Contractor/Subcontractor Compliance (State, COT, Federal Contracts, Grants).

Capital/Financing

African-American firms are positioned least favorably compared to other subgroups in attracting capital:

• Poverty in the Black community made it difficult for proprietors to generate the cash-flow necessary for business growth.

• Potential Black entrepreneurs could not obtain formal business training.

• Black merchants were disadvantaged by limited access to capital due to discrimination in lending by White-owned banks and the underdevelopment of Black banking.

• Due to restrictive covenants in real estate and business licensing, Black store owners often were unable to acquire locations on main business streets.

COMMUNITY REINVESTEMTN ACT

Economic Development Strategic Goal 2013-2014

Small Business ParticipationImprove the ability of smallbusinesses to participate in theState contracting process:

• Promote and encourage the utilization of minority and female owned businesses.

• Increasing support of Minority and Business Enterprises (MBE) programs

• Certifications (Universal/Local).

Economic Development Strategic Goal 2013-2014

Contractor Compliance: •Monitor and track

compliance with law and/or regulations of business contracting within the State of Oklahoma (Local, state and Federal Equal Employment Opportunity)

•Accountability

•Enforcement

Responsibilities of Leadership and Advocacy Groups

• Minority and non-minority elected officials becoming highly supportive of promoting growth among small and larger minority businesses

• Black Caucus Leadership serving as principle advocate for MBE’s and challenging (internal/external) systems to address current / or potential contracting violations.

• Transperancy in reporting to ensure that Good Faith Efforts are being made to utilize MBE’s on Federal, Grant and State contracts.

• Recommending action to improve overall environment for MBE’s.

Establishing Accountability for Minority Participation

Oklahoma State Statute requiring that a ___ minimum of the total number of state contracts and/or dollar value of state contracts and purchase orders are to be allocated to small MFBE’s.

Require that all municipalities submit an annual “Minority Business Utilization Plan” outlining strategies to increase their spending with MFBE’s.

Minority Owned Business Court DecisionsAdarand Constructors v. Pena and Cityof Richmond v. J.A. Croson Co., havemandated that federal and stateprograms aimed exclusively at minorityowned business must now past the testof “narrow tailoring.”

• Under such a test, procurement programs are required to be race-neutral except when remedying specific instances of past discrimination toward a particular group. Moreover, quotas or “set-asides "are prohibited, and replaced with more ubiquitous goals and objectives. Consequently, certain state and federal agency guidelines have been modified.

Contracting Disparity Gap Challenges

1. The discriminatory conditions that previously existed were deep and pervasive and have not been fully reversed.

2. Even more damaging than blatant discrimination has been the negative effect of abuse and fraud in the programs established to help minority businesses grow and develop (So-called front companies continually raise concerns about the objectives and impact of supplier diversity programs and initiatives).

3. Some minority business have been unable or unwilling - to adjust to a changing global economy.

Economic/Community Well BeingNorth Tulsa Demographics Compared to State of Oklahoma Average

• Median house value below state average.• Unemployed percentage below state average.• Black race population percentage significantly below

state average.• Hispanic race population percentage below state

average.• Foreign-born population percentage significantly below

state average.• Renting percentage below state average.• Length of stay since moving in signifiicantly below

state average.• Percentage of population with a bachelor's degree

or higher below state average.

http://www.city-data.com/city/North-Tulsa-Oklahoma.html#ixzz1vQeWaMAj

Proposed Legislation Supporting MWDBE aka MFBE Utilization

Note: Additional Information Available

Minority Business Development, key to U.S. Economic Wealth Building

Supply Side Impact During the decade between 2002 and 2012, the U.S. Bureau of Labor Statistics (BLS) estimates that 70% of the approximately 17 million people who will enter the U.S. labor force will be ethnic minorities, equating to more than one-third of a total labor force estimated to be 162 million

Demand Side Impact

Minority consumers will drive demand over the next 20 years. The purchasing power of ethnic minority groups is growing by 7.2% annually

GROWING ~5% ANNUALLY, MINORITIES WILL ACCOUNT FOR 40% OF POPULATION BY 2050

Source: U.S. Census Bureau, National Estimates, Annual Population Estimates by Sex, Race, and Hispanic Origin, Selected Years From 1990 to 2000