Wendi C. Thomas: Black-, women- and Hispanic-owned businesses get tiny share of municipal contracting dollars Commercial Appeal//Wendi C. Thomas//May 31, 2014 Are black-owned companies being shut out of Shelby County government contracts? That’s the question that county commissioners Walter Bailey and Henri Brooks posed at a May commission meeting. Their legitimate concern was lost in the outrage over Brooks’ abrasive treatment of a Hispanic businessman. Shelby County government can’t easily answer the commissioners’ question because it doesn’t know. The county hasn’t tracked the share of contracts awarded to minority/women business enterprises (MWBEs) in more than 20 years. In the face of court rulings and legal challenges, it abandoned race-conscious programs in favor of race-neutral methods that favor locally owned businesses, methods that may not increase MWBE participation. But even when the county took pains to spend its dollars with minority vendors, the results were disappointing. From 1988 to 1992, MWBEs were woefully underutilized, receiving just 10.7 percent — or $4.5 million — of county government’s construction dollars, according to a 1994 intergovernmental disparity study. The remaining 89.3 percent, or $37.8 million, went to firms owned by white men. The 1994 study by D.J. Miller & Associates cost $894,540, which was shared by the nine-member Memphis/Shelby County Intergovernmental Consortium, which included county government and the City of Memphis. Disparities such as this and dozens more, the study found, showed that the consortium’s members “have passively discriminated against MWBEs in the Memphis community.” Then-Shelby County Mayor Jim Rout said he’d use the study to “eliminate economic inequality.’’ “Now that we have this information in hand, county government will continue to seek ways we can encourage and nurture development of minority and small businesses,” Rout said at an October 1994 news conference. Fast forward 20 years. At a May 12 commission meeting, Brooks, a Democrat,squabbled with fellow commissioners over the high percentage of Hispanic employees and low percentage of African American workers at a county roofing contractor. (The company, B Four Plied, was awarded the $1.7 million contract.) County Commission chairman James Harvey, a Democrat, has convened an ad hoc committee to accomplish what Rout, a Republican, promised back when President Bill Clinton was in his first term. “It’s incumbent on us to, number one, create the opportunity; number two, remove and or reduce the barriers; and number three, be fair to the community by and large, based on the demographic makeup,” Harvey said last month. The hurdles to creating intergenerational wealth for racial and ethnic minorities are many and persistent. And although the racial disparities are dismal in the public sector, it’s worse in the private sector, which faces less pressure to hire minority firms. In 2010, Griffin & Strong public policy consultants conducted a disparity study for the city of Memphis, which included private sector data provided by market research firm Reed Construction Data. From July 2003 through December 2007, the value of private-sector commercial construction projects awarded to prime contractors in the Memphis MSA was $1.16 billion. Of that $1.16 billion, $1.15 billion, or 99.24 percent, went to white male companies. White women received $8.78 million, or .76 percent. Blacks, Hispanics, Asians and Native Americans didn’t receive a single dollar — even though in 2012 African-Americans made up 46.1 percent of the Memphis metro area, Hispanics 5.2 percent and Asian 1.9 percent. White males made up 23.8 percent and white females 24.4 percent. (The totals add up to more than 100 percent because Hispanic is an ethnicity, not a race.) The active discrimination of the pre-Civil Rights era has been replaced by a partisan political climate quick to pounce on the messenger and ignore the message. Progress on some fronts — such as a shrinking racial gap in high school graduation rates — is erased by yawning divides in economic equality. In an area as poor as Memphis, where the poverty rate tops 27 percent, the gaps threaten the region’s future. Consider the black-white wealth gap, which has grown since 1984. Today the median household wealth for a white family is 20 times that of a black family. In 2010, the business equity for white households was 18 percent of a family’s average assets, or $142,969, up 106 percent in value between 1983 and 2010, according to the Pew Research Center. For black households, business equity makes up less than 4 percent of family assets on average, or $5,568, up just 37 percent during that same period. During the May spat over the diversity of the county roofing contractor, Brooks reminded fellow commissioners of a relevant section of the 1964 Civil Rights Act. “You can’t leave black folks out and say you’re compliant with Title VI,” Brooks said. “That’s why it was born, to make sure black folks did not subsidize their own discrimination.” But city and county data suggests that people of color — and women — are doing just that: They pay their share of taxes but their businesses don’t receive a proportional share of municipal contracts. While racial and ethnic minorities and women spar over the scraps, wealth is replicated in the hands of a few. Whether racial animus or benign apathy is to blame for the disparities doesn’t matter, said Rodney K. Strong, architect of the city’s 2010 disparity study. “The impact is the same.” Race conscious or race neutral? A 1989 U.S. Supreme Court ruling in the Croson case forced local governments across the country to conduct exhaustive, quantitative analysis of past discrimination before crafting any race-conscious programs. Shelby County retooled its methods, but a district court twice struck down those efforts. Around the same time, aggrieved white males took their indignation to court. “There were several instances of companies that were deprived of the opportunity to bid that brought lawsuits against the county,” said county chief administrative officer Harvey Kennedy. Now the county relies on a locally owned small business purchasing program that gives preference to such businesses, regardless of the race, ethnicity or gender of the owners. The hope, Kennedy said, is that this program will boost MWBE contract participation. Strong, a native Memphian, doubts that it does. “If you’ve had a race-conscious program and you go to a race-neutral program, the numbers will drop,” Strong said. The 1994 intergovernmental disparity study suggests he’s right. It measured the impact of a county race-conscious program in effect briefly in 1990 and 1991. The MWBE utilization in goods and nonprofessional services fell from 15.48 percent in 1989 to 1.68 percent in 1992. The county’s recent locally owned small business reports also support Strong’s claim. In January, the county department of public works awarded $560,945 to local small businesses. More than 50 percent went to firms owned by white females, who make up 24.4 percent of the Memphis MSA. At least 15 percent went to firms owned by black women, who make up 24.7 percent. Women and racial and ethnic minorities make up 76.2 percent of the population, but small businesses received 20 percent of the county’s January purchase orders. When municipalities aggressively work to ensure that women and people of color are full participants in contract spending, the efforts pay off. “The city that comes closest to parity is Atlanta,” Strong said. Elected Atlanta’s first black mayor in 1973, Maynard Jackson insisted on minority set-asides for public projects. Minority participation in municipal contracts climbed to 30 percent. “Atlanta consistently does 36 to 37 percent of minority participation. I’m not aware of another city that does numbers like that.” Construction of the Atlanta Falcons’ new stadium will cost $1 billion, which means around $350 million will flow to minority-owned firms, most of which are African-American, Strong said. The city is more than 50 percent black. Contrast that to the Memphis metro area, where African-Americans make up 46.1 percent of the population and women 52.5 percent. According to 2007 census data, black-owned businesses in the Memphis metro area received just 1 percent of business receipts. Viewed through the lens of history and hard numbers, Brooks could be considered the county’s conscience, not a bully. But if history is any indication, there’s little hope for change. “The results you get,” Strong said, “have to do with how much political will there is.”
Posted on: Sun, 01 Jun 2014 00:59:02 +0000
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