As the Presidential candidates square off for their first debate, the Gazelle Index staff has three important questions, from the perspective of minority business owners, it would like for the candidates to address.
Background to question #1:
The overall unemployment rate is 8.3%, yet it is and 7.2% for whites. However, minorities face staggering rates of unemployment; African-Americans (2.6 million unemployed workers and 14.1% unemployment rate) and Latinos (2.5 million unemployed workers and 10.2% unemployment rate).
Question #1: History has shown that growing the economy is important, but it is not enough to reduce the high rates of unemployment among blacks and Latinos. Given this fact, what is your prescription for reducing the extraordinarily high rates of unemployment among minorities?
Background to question #2:
Employment data reveals that to create jobs, we must focus on high performing small businesses and new start-up enterprises. For example, during August 2012, the private sector created 201,000 new jobs according to the ADP National Employment Report. The jobs came from the following sectors: firms with 50 to 499 workers accounted for 42.8%; and firms with 1 to 49 workers accounted for 49.2% of new jobs. In comparison, firms with 500 or more workers created only 8.0% of the new jobs.
Both Presidential candidates have argued that small business job creation is the key to our economic recovery. Furthermore, the Obama Administration championed and Congress passed the JOBS Act (Jump Start our Business Start-Ups), which makes more funding available for start-up enterprises. However, minority businesses face unique problems. For example, well documented disadvantages in gaining access to capital, bonding and corporate supply chains.
Question #2: What is your prescription for addressing these unique challenges faced by minority businesses?
Background to question #3:
Government sector contracting is fundamentally important to the success of minority-owned businesses. Minorities represent a larger percentage of government contractors in comparison to their share of all small businesses. They also receive a greater share of their revenue from the government sector than do non-minority owned small businesses. For example, there are 19,237 minority-owned small businesses registered with the federal government in 2008. Of that number, black-owned businesses comprised the largest number, representing 15.3% of all government contractors but only 7.1% of the country’s 27 million small businesses. Latinos comprised 10.8% of all government contractors but only 8.3% of all US small businesses.
Asian and Pacific Americans and Subcontinent Asian Americans represented 10.3% of all government contractors and 7.2% of all small businesses. Finally, Native Americans represented 4.7% of all government contractors and only .9% of all small businesses.
In comparison white-owned businesses comprised 59.3% of all government contractors, but 79% of all small businesses.
During the era of Jim Crow segregation and immediately afterward, discrimination manifested itself in many ways including the exclusion of minorities from bank loans, red lining minority neighborhoods, restrictive and exclusionary licensing and distribution practices, and mortgage lending discrimination. Those practices fostered a predominance of “mom and pop” enterprises in minority communities. Starting in the late 1970s and early 1980s, government affirmative action programs in procurement gave minorities the chance to break out of these constraints and enter fast growing industries such as professional services, technical and engineering services as well as specialized and heavy construction services. This transformed the character of the minority business sector and created employment opportunities for minority workers.
Question #3: Today, affirmative action is under legal assault. What policies do you propose to ensure that minority businesses have equal opportunities and how do you propose to the current disadvantages the face as a result of past injustices?