The new disparity study in contracting commissioned by the Missouri Department of Transportation and released last week provides further evidence, if any were needed, that minority contractors and workers are not getting anywhere near their fair share of economic opportunity in Missouri. That means this state and region will continue to lag behind our peers as so much of our economic potential remains underdeveloped.
In the study, NERA Economic Consulting examined $4.126 billion worth of prime contracts and subcontracts awarded by MoDOT during 2005 to 2009. It found that while 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. In St. Louis, the study found that black-owned businesses were “available” for 3.58 percent of construction contract dollars in the “new highway district,” yet only 1.46 percent of those dollars were going to black-owned businesses.
This confirms the systematic economic underdevelopment of African Africans in Missouri and St. Louis. “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,” states the study.
The workforce disparity is just as damaging. 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.
What must be done to change this intolerable situation? For one thing, we must set minority participation goals, which currently is not being done on state-funded projects. Minority participation was much higher on federally-assisted contracts, where a minority inclusion program operates, than on state-funded contracts, where it does not, the study found. “It is clear that [minority] 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 Disadvantaged Business Enterprises (DBE) program for state-funded contracts and adopt the federal DBE annual goal. 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.”
This study is valuable ammunition for advocates of minority inclusion, particularly in the construction industry. It shows that when the so-called free market is allowed to operate independently of mandate and oversight for minority inclusion, that minority businesses and workers are in effect discriminated against, receiving much less than their fair proportion of contracts and earning dramatically less than their similarly qualified white coworkers.
MoDOT, it almost goes without saying, should adopt the recommendation to institute a DBE program with DBE goals on state-funded jobs. But action is needed at a more senior level as well. Gov. Jay Nixon no longer has Kelvin Simmons at his right hand to act as his conscience and gadfly on this issue, but it is time for this governor to show real leadership on this issue. The State of Missouri has long dragged its feet on funding its own disparity study, but the NERA report makes clear that discrimination in Missouri’s construction industry is active and ongoing. Gov. Nixon and the Missouri Legislature need to act immediately to establish programs that mitigate this discrimination and help put this state on the path to greater economic inclusion of minorities. Greater inclusion is not only the right thing to do, it also contributes to greater prosperity for all.
