There is no small amount of disagreement on the topic of minority business set-aside programs. Some see them as a way to help correct past wrongs that have kept minority- and women-owned businesses from getting a fair piece of the economic action. Others see it as reverse discrimination.
Last week, Denver city officials began a public discussion about the latest incarnation of its set-aside effort, which started in the 1970s. The mayor’s Construction Empowerment Initiative sets new rules for the sharing of city construction business with disadvantaged contractors.
These rules are born of court challenges that took Denver as far as the U.S. Supreme Court, which in 2003 declined to review the city’s program and let stand a lower court ruling affirming the core of the program.
Denver’s proposed retooling of the program would set participation goals of 20-22 percent for women- and minority-owned businesses, said John Huggins, city economic development director. It would also offer all small businesses help in navigating the contract awards system.
In an effort to ward off legal challenges, the city commissioned a consultant’s study that showed women- and minority-owned businesses were paid less, formed businesses at a lower rate than average and were discriminated against in the small business credit market.
Putting the consultant’s report aside, it’s clear that helping these groups would give them a way to help themselves.
U.S. Census Bureau figures show great economic disparities by race and Hispanic background.
Overall, 15 percent of Denver residents live in poverty, according to the 2005 American Community Survey. In Denver, 26 percent of African Americans are below the poverty level, 22 percent of Hispanics and less than 1 percent of non-Hispanic whites. Denver women, across all education levels, made significantly less money than Denver men.
The numbers underscore the need to open a door for people who want to better themselves.
The art of the deal will be in the details.
City officials have said the percentages of work set aside for women- and minority-owned businesses will be flexible based on whether any such firms are available for particular jobs and can offer competitive bids.
The stakes are high as the city prepares to build a $378 million justice center. The set-aside plan should help spread the work around in such a way that will benefit the whole city.
