EconomicCommunityDevelopmentAdvocacy for Minority ContractorsDr. Lana Turner-Addison, November 27, 2012
GoalEliminating Barriers thatprevent the growth ofAfrican-American ownedand minority ownedbusinesses. 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 BuildingWealth 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 facingMinority Business1. 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/FinancingAfrican-American firms are positioned least favorablycompared 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 DevelopmentStrategic Goal 2013-2014Small 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 DevelopmentStrategic Goal 2013-2014Contractor 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 Leadershipand 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 Accountabilityfor 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 BusinessCourt 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
Contracting Disparity GapChallenges1. 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 toState 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 bachelors degree or higher below state average. http://www.city-data.com/city/North-Tulsa-Oklahoma.html#ixzz1vQeWaMAj
Proposed Legislation SupportingMWDBE aka MFBE Utilization Note: Additional Information Available
Minority Business Development, key to U.S. Economic Wealth Building Supply Side Demand Side Impact Impact During the decade between Minority consumers 2002 and 2012, the will drive demand U.S. Bureau of Labor over the next 20 Statistics (BLS) years. The estimates that 70% purchasing power of of the approximately ethnic minority 17 million people groups is growing by who will enter the 7.2% annually U.S. labor force will be ethnic minorities, equating to more than one-third of a total labor force estimated to be 162 million
GROWING ~5% ANNUALLY, MINORITIES WILL ACCOUNT FOR 40% OF POPULATION BY 2050Source: U.S. Census Bureau, National Estimates, Annual Population Estimates bySex, Race, and Hispanic Origin, Selected Years From 1990 to 2000