Discrimination exists against minorities and women in Missouri Department of Transportation’s market area, according to a disparity study released Dec. 5.
The study, commissioned by MoDOT, examined $4.126 billion worth of prime contracts and subcontracts awarded during 2005 to 2009.
The study found a disparity in how minority- and women-owned businesses (MWBEs) receive contracts in Missouri. These businesses are referred to as disadvantaged business enterprises, or DBEs, in the study.
“The size of the disparities facing minority- and women-owned firms in Missouri is striking,” stated the study, which was conducted by NERA Economic Consulting.
For example, although 2.09 percent of all construction firms in Missouri are owned by African Americans, they earned only 0.85 percent of all sales and receipts. Hispanic-owned construction firms represent 1.17 percent of the total and earn only 0.67 percent of all sales.
For women-owned firms who represent 7.38 percent of construction firms, the disparity was less. They earned 7.43 percent of sales and receipts. Among Missouri’s, non-minority, women-owned firms earned the largest amount of contracting and subcontracting dollars.
In St. Louis, the study found that minority businesses were “available” for 5.01 percent (3.58 percent for African Americans) of construction contract dollars in the “new highway district.” However, only 1.52 percent of those dollars were going to minority businesses overall, and 1.46 to African Americans.
For St. Louis minority consulting businesses, it was the opposite. Of all consulting contract dollars, minorities represented 7.5 percent availability. However, they were awarded 10.21 percent of contract dollars.Â
Overall in St. Louis, the DBE availability for contracts is 21.95 percent in construction and 22.81 percent in consulting in the new highway district. However the contract dollars awarded to DBEs was lower – 14.65 percent in construction and 19.2 in consulting.
The lack of MBE availability is a direct result of an uneven playing field.
“In other words, minorities and women are substantially and significantly less likely to own their own businesses as the result of discrimination than would be expected based upon their observable characteristics, including age, education, geographic location, and industry,” stated the study.
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Wages for blacks 34 percent lower
And whether they work as employees or entrepreneurs, minorities and women on MoDOT projects earn less than white males, the study found. The annual average wages for African-Americans construction workers in 2006–2010 were 34 percent lower in the MoDOT market area than for non-minority males who were otherwise similar in terms of geographic location, industry, age, and education.
For construction business owners’ earnings, the annual earnings for self-employed African Americans in 2006–2010 were 42 percent lower in the MoDOT market area than for non-minority males who were otherwise similar in terms of geographic location, industry, age and education.
Setting DBE goals boosts minority participation
The study also found that it pays off to set minority participation goals, which is not being done on state-funded projects. The DBE participation was much higher on federally-assisted contracts, where the DBE Program operates, than on state-funded contracts, where it does not, the study found.
“It is clear that DBE participation is substantially higher when goals are available for use, particularly in the case of construction,” the study stated.
In NERA’s recommendations, it suggested that MoDOT adopt a DBE program for state-funded contracts and adopt the federal DBE annual goal.
For state-funded construction projects, MoDOT awarded 6.49 percent to DBEs, although the study found that DBEs could handle 20.2 percent. And of the DBE participation, non-minority women accounted for 5.93 percent and Native Americans for the other half percent. No African-American, Asian or Hispanic businesses were awarded contracts for the $251 million of state-funded projects that NERA reviewed.
The report concluded, “The result of the analyses of state-funded contracts makes clear that without use of contract remedies, minorities and women are denied equal access to contracting opportunities.”
During January 2013, MoDOT will host a series of public meetings in St. Louis, Jefferson City, Springfield and Kansas City, Missouri, to collect input on the study.
In a statement to the St. Louis American, Lester Woods, MoDOT’s external civil rights director, said, “We are anxious to use the study’s findings to increase opportunities for DBEs in the heavy highway construction industry.”