For decades, minority-owned firms have been trying to do business with New York City and New York state governments. And for decades, they’ve been told that, for varying reasons, they’re “just not good enough” to compete. The end result is while more than $1 trillion of business is conducted in New York City each year, our community has been shut out.
New York has it backwards. Although minority-owned businesses have made terrific strides across the county, government has failed our community on this issue. It has failed to nurture small businesses and entrepreneurs, failed to enforce against and penalize discrimination and simply failed to care.
In a majority-minority city, only a disgraceful 4 percent of city business goes to minority- and women-owned business enterprises. Looking closely at that 4 percent, it’s even worse: Blacks total 25 percent of New York City’s population but account for only 4 percent of city business. Latinos total 29 percent of the population but account for only 0.9 percent of city business.
Even with the most progressive mayor and City Council of the modern era, we have failed to make progress for MWBEs. In fact, we’ve stagnated. The city’s MWBE participation peaked at 5 percent in 2012, and it has only fallen since. Not good enough!
Passing Local Law 1 in 2013 was supposed to revolutionize the way MWBEs do business. But loopholes persist. The law only applies to the 34 city agencies under direct mayoral control, not to the other 72. It excluded MWBE requirements from “sole source” contracts, a category that grows each year. Not good enough!
Local Law 1 did nothing to create the support network that minority entrepreneurs need to thrive. MWBEs still struggle to access start-up capital from institutions that redlined our communities for generations. This problem is compounded by slow government payments that can take months to process. This leaves MWBEs without sufficient reserves, and many do not survive. Not good enough!
Legal protections against MWBE discrimination are weak, and enforcement almost never occurs. Even in 2015, the shameful “men in skirts” phenomenon of fraudulently registered businesses owned by white males using girlfriends, wives or subordinates to disguise themselves remains rampant. Not good enough!
Successful minority businesses create advancement in communities of color and will help us recover from a recession that disproportionally harmed the Black community. It’s time to amend Local Law 1. That’s why we’re calling on city and state government to raise MWBE requirements to 35 percent, a number that reflects our diverse population.
And we’re calling on Mayor Bill de Blasio’s progressive administration to create a full-time chief diversity officer. Although the current appointee handling minority business is brilliant and accomplished, this issue is too big and too important to be one issue in a crowded portfolio. The state comptroller has this position; the city comptroller has this position. New York City needs a CDO.
We also propose dedicating 1 percent of city and state pension funds to create an MWBE funding pool, which could offer start-up capital to new MWBEs and loans to MWBEs awaiting government payments.
With a thriving minority business sector, the Black community can make real strides towards the financial equality it has been denied for generations. Without it, inequality will continue to worsen. Let’s do what it takes to hold our leaders accountable and not settle for the myth of “Not good enough.”
Led by Bertha Lewis, the Black Institute works to shape intellectual discourse and impact public policy uniquely from a Black perspective.