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Looking inward for Black support


According to figures recently released by the United States Department of Labor, African Americans continue to suffer an unemployment rate significantly higher than the rest of the country.

While the national rate for June is 8.2 percent, unchanged from May, the rate for Blacks has climbed almost a full percentage point from 13.6 to 14.4 percent.

This compares to an 11 percent rate for Hispanics for both months.

The Congressional Black Caucus (CBC) last year held a national jobs tour in order to put a spotlight on the situation. But not much has changed for Blacks.

This year Congresswoman Karen Bass, says the CBC is focusing on what she calls the “voter suppression” voter identification laws, taking back the House of Representatives, maintaining control of the Senate and re-electing President Barack Obama. If all of this done, then a jobs bill that the president proposed could actually have a chance of becoming law.

Since June of 2011, the seasonally adjusted unemployment rate for African Americans has bounced around, hitting 16.2, dropping to 14 and 13 percent, and now climbing back up again.

As Blacks continue to disproportionately bear the brunt of the nation’s economic struggle, the question once again arises: What will it take to turn this situation around?

One answer, according to Thomas Danny Boston, creator of the Atlanta-based Gazelle Index is to look inward.

The Gazelle Index is a quarterly survey of the current conditions, outlook, and future hiring plans of small, minority and women business owners. The index is unique in that it provides time-sensitive information based on a nationally representative sample of businesses owned by African Americans/Blacks, Hispanic/Latinos, non-minorities/Whites, Asian Americans, women and men.

Boston writes in a blog

An economics professor at Georgia Tech and expert on minority and small businesses, Boston bases his conclusion in part on the last government census on small business–the Survey of Business Owners (SOB), conducted in 2007 and a random sampling of 350 African American CEOs the Index conducted that same year.

What the questioning revealed was that 64 percent of the employees in Black firms were African American, and that according to the SOB, the nation’s 1.9 million Black firms employed a total of 921,032 people, and 589,460 were African American.

Boston goes on to conclude that Black companies are capable of employing 23 percent of unemployed African Americans if they receive the support needed.

In a similar piece, “The Job Creating Power of the Black Dollar,” the Gazelle Index creator also points out that, according to the index survey, about 26 percent of revenues in Black firms come from African American consumers and businesses. Additionally, the survey found that Blacks spend about 6 cents of every dollar with a Black company. If that doubled, Boston says more than half a million jobs might be created, and that would reduce Black unemployment by nearly three percentage points.

Boston identified the support needed as improving access to government contracting, being part of the corporate supply chain, and increasing business to business as well as retail transactions.

Aubrey Stone of the California Black Chamber of Commerce agrees with Boston that African American-owned companies could play a big role in reducing unemployment if given support, but he wants to take that solution even further.

“The most obvious (support) is to increase the utilization of Black businesses. But I add one caveat–I think African American chambers have a special obligation of creating more Black businesses.”

Stone detailed some Small Business Administration numbers that delineate the situation. In California, there are in excess of 1 million White women-owned businesses, 860,000 Hispanic, 475,000 Asian and only 125,000 Black firms.

In order to attack the unemployment problem, Stone believes more viable (larger and financially solid) African American businesses must be created and sustained.

This will require a mind-set change by Africans Americans from “I gotta have/get a job” to “I want to start a business to create jobs.”

And these new businesses must be in demand/growth areas like the green economy.

Congresswoman Bass also pegs the healthcare industry as an area where the community must fight for African Americans to get jobs and points to the approval of the Affordable Healthcare Act and the upcoming re-opening of Martin Luther King Hospital as driving forces. But people need to think beyond doctors to all of the many other occupations in the industry.

Tunua Thrash, head of the West Angeles Community Development Corp., also believes that firms controlled by Blacks as well as nonprofits like hers can play a key role in reducing unemployment, and one critical support the firms need is the monitoring of their ability to tap into public contracting opportunities, which will subsequently increase their business revenues.

Prior to 1996, affirmative action programs played a critical part in making sure that there was some equitable distribution of contracting dollars. That changed with the approval of Proposition 209 by state voters, which banned the consideration of race in contracting, college admissions and hiring. It also eliminated the ability to set quotas for how many women, minority or disadvantaged firms would be used in contracting.

Analysis of the impact of this controversial proposition at just one state agency, Caltrans, and detailed on the website,, found that a decade after the ruling was approved by the state supreme court, only one-third of Minority Business Enterprises (MBE) certified with the agency prior to 1996 were still in business. These firms also experienced a greater than 50 percent reduction in total awards and contracts from Caltrans.

Additionally, MBEs owned by African Americans and by women of color experienced the greatest negative impact post Prop. 209.

Thrash contends that no adequate monitoring tools have been put in place of the goals, set-asides and quotas that were built into affirmative action programs. Consequently, it is difficult to accurately determine how many or if any contracts are being awarded to minority businesses.

Stone notes that one crucial challenge is that Prop. 209 eliminated the ability to even discuss race. Now conversations revolve around the term small business.

There is one program that Thrash and others studying the issue hold as a model worth duplicating. The California Public Utilities Commission implemented General Order 156, which requires utilities in the state to meet supplier diversity goals. Each year, the agency publishes a report to submit to the Legislature.

Government contracting is especially vital to minority firms, said Boston, because about 12 percent of their revenue across the board is derived from that source, compared to 6 percent for non-minorities. That is even more the case for African American businesses, added the Georgia Tech economist. For example, 33 percent of revenues of companies in the metro Atlanta area come from government contracting.