Stimulus Spending and African American Small Businesses

Conservatives and many business entities oppose the concept of affirmative action set-asides, but the marketplace is a harsh environment for many minority businesses. Set asides are oftentimes the only way a minority business will get any of the business. Just as busing was a bad solution to a bad problem, it was the only way America was going to get any public school integration. Economic discrimination is still alive and well. It is frustrating to experience such bias when a minority business knows it is offering beneficial products and services to a situation and to clients, yet circumstances clearly indicate that numerous corporate and government entitities would rather not develop a beneficial project than partner with or fund minority firms.

According to the Kirwan Institute, which studies race and ethnicity at Ohio State University, small businesses received 34 percent of the $39 billion direct federal contract awards. Of those contracts, 7.6 percent went to firms owned by women, 3.5 percent to firms owned by Hispanics and 2.5 percent to firms owned by African Americans. Approximately 80 percent of the $787 billion stimulus funds have flowed through state and local governments, making them harder to track than direct federal spending becaue state and local laws vary widely in how much government spending must be set aside for minority-owned businesses.

The U.S. Bureau of Labor Statistics reported in October 2009 that the unemployment rate in the African American community was 15.7%, Men, 20 years and over........ 17.1%, Women, 20 years and over....12.4%, and Both Sexes, 16 to 19 years.....41.3%. The general unemployment rate was 10 percent. One would think that minority communities would be directly targeted for mitigation of joblessness and economic degradation because they are in the worst shape. And they are too big to fail. Most jobs are created by small businesses. Yet, it appears once again that recovery subsidies will somehow avoid the Black community. (Wash Post, 1/18/10, Bureau of Labor Statistics, The New York Times Jobless Rate Chart)