Elizabeth Velez, Carlo A. Scissura
Crains New York
11.09.20
The pandemic has laid bare the vast inequalities in our city, state and country as we once again confront many deep-rooted failures to support communities of color.
Recent data demonstrates that New Yorkers of color are bearing the heaviest burden from the pandemic. As we tackle the long road to recovery from Covid-19, a business-as-usual approach will not suffice if the goal of a stronger, more equitable economy and society is to be met.
Throughout the darkest days of the pandemic—with business closures required statewide—small businesses suffered tremendously. A recent McKinsey and Company study found that of all vulnerable small businesses, minority-owned ones may be most at risk.
Based on the financial stress before the pandemic and the limited access to capital and credit, minority-owned businesses tend to face structural barriers that make it harder to run and scale an enterprise successfully. The difficulties minority entrepreneurs and their businesses face must be met immediately with near-term relief and a commitment to substantial and lasting investment. Minority- and women-owned businesses are often in communities of color and have a workforce reflective of their community. Investments in minority- and women-owned businesses can have a direct impact on the economic foundation of these communities through job creation and support for businesses that create workforce opportunities for people of color.
An imperative step in New York’s recovery is to get people safely back to work. While the country is averaging around 8% unemployment, the city's rate is twice that. Never has there been a more opportune time to invest in the industries, starting with infrastructure and building, that have historically created opportunities for all and carried us through uncertain times.
Significant investment in infrastructure is a proven way to spur economic recovery. Infrastructure across New York and the nation is strained and in dire need of repair—rising to meet this need with an ambitious, comprehensive infrastructure plan will get New Yorkers and people around the country safely back to work, thus fueling the economy, creating jobs and adding billions in economic growth.
But investing in infrastructure is also an investment in minority- and women-owned businesses. The state’s adoption of the Minority- and Women-Owned Business Enterprise Program brought a much-needed focus to prioritizing business procurement from professionals who face a lack of access to capital and opportunities. The building industry has had the greatest demonstrated response to this program—it is responsible for the largest percentage of money paid to MWBE firms by the city and state.
MWBEs won more than $2.93 billion in state contracts during fiscal 2018-19, $1.77 billion, or 60%, of which came from contracts for construction services. In fiscal 2019, the city awarded nearly $1.04 billion to certified MWBE vendors, with $597.9 million for construction services.
Of the 97 state agencies and public authorities, the Metropolitan Transportation Authority ranks first in dollars paid to city-certified MWBEs, disbursing $736 million during fiscal 2018-19. Contracts have continued throughout these challenging months—since March, when the pandemic began locally, the MTA has awarded $73.1 million in contracts to more than 26 state-certified and MTA-certified MWBEs to provide the necessary equipment, supplies and professional services needed to respond to the virus.
As part of the $8 billion redevelopment of LaGuardia Airport, the Port Authority of New York and New Jersey and its private partners, Delta Air Lines and LaGuardia Gateways Partners, already have awarded more than $1.45 billion to MWBEs, meeting Gov. Andrew Cuomo’s 30% participation goal.
Simply put, investing in infrastructure is a commitment to MWBEs, and in the midst of and after the pandemic, assisting these businesses is more critical than ever. The Building Congress is committed to furthering our support for minority- and women-owned businesses in our industry to ensure that economic recovery includes those who are too often overlooked.
That’s how New York can both heal from the pandemic and assist those that have been marginalized for generations, thus becoming a stronger city and state in the process.
Elizabeth Velez is the president of Velez Organization and the chair of New York Building Congress. Carlo A. Scissura is the president and CEO of the Building Congress.
https://www.crainsnewyork.com/op-ed/investment-infrastructure-lifts-minority-and-women-owned-business
