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Pass Prop. 16: A Solution to Modern-Day Redlining for Diverse Businesses
By Tunua Thrash-Ntuk & Miranda Rodriguez
Published October 7, 2020

Tunua Thrash-Ntuk (File Photo)

Although affirmative action has been banned in California since 1996, there has never been a more opportune time to reverse this damaging decision, which has hindered governmental efforts to address racial and gender opportunity gaps. Make no mistake, Proposition 16 is a direct result of repeated calls to action from the Black Lives Matters movement, as our nation reckons with its historical and present-day racial inequities.

In broad terms, Prop. 16 overturns the ban on race- and gender- based affirmative action in California. However, when Proposition 209 was passed 24 years ago, it didn’t just prohibit affirmative action in school admissions, but also “public contracting.” Ward Connerly, a central figure behind Prop. 209 who has faced legal challenges from the ACLU and been called a promoter of “ethnic cleansing,” put it bluntly: “(Affirmative action) is really the enemy of white people who are contractors.”

At Local Initiatives Support Corporation Los Angeles (LISC LA), we work every day to channel financial resources to our communities that need them most. Over the past 33 years, LISC LA has distributed $850 million in grants and loans to support numerous community development initiatives, including small businesses in under-resourced and diverse neighborhoods. We see the inherent racial inequities in public contracting firsthand. The only way to combat this is to pass Prop. 16, ensuring a more inclusive distribution of government contracts to narrow the racial wealth gap.

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The facts demonstrate the bleak effectiveness of Prop. 209. According to a 2006 study, in the decade since the passage of Prop. 209, Minority Business Enterprises (MBEs) saw a more than 50 percent reduction in contracts and awards from Caltrans. In 2019, San Diego city leaders called for a study on city contracts after announcing that “San Diego has historically awarded less than 1 percent of city contracts to companies owned by women and minorities.”

This lies in stark contrast with cities like New York, where such bans on affirmative action do not exist. Recently in FY 2019, New York City awarded over $715 million in prime contracts and approximately $319.6 million in eligible subcontracts to M/WBEs, with the goal of awarding at least 30% of City contract dollars to M/WBEs by 2021.

Miranda Rodriguez (Courtesy Photo)

Prop. 16 is an opportunity to tear down these existing barriers and set concrete goals for providing public contracts to diverse firms. The good news is, a model for this already exists in the work of ASCEND LA, which aims to form a network of leaders to grow the next generation of diverse business owners. Their research-backed, holistic “3-M” Model for Management, Markets, and Money prepares diverse businesses for contract procurement opportunities, and creates a pipeline to attaining them.

These pipelines are crucial in overcoming the barriers that diverse businesses face when accessing contracts. Historically, communities of color have been blocked from capital and resources through redlining—a practice formally dating back to the 1930s wherein loans were made incredibly expensive in racially and ethnically diverse areas.

This institutional discrimination is still in practice today. As The New York Times put it—diverse businesses “often have weaker banking relationships than their white-owned counterparts — one legacy of the practice of redlining, or refusing to lend to people in communities of color.” The results are staggering—the median White-owned firm in America has revenue 1.5 times that of the median Latinx-owned firm and 5 times that of the median African American-owned firm.

As we as a nation reflect on how we can make a more racially just society, one thing is clear: now is the time to pass Prop. 16. Decades from now, we will look back on this time of racial reckoning and ask ourselves, “Did we do enough?” If we fail to pass Prop. 16, thwarting the opportunity to bring back affirmative action in California, the answer will be a resounding “no.”

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Tunua Thrash-Ntuk is Executive Director and Miranda Rodriguez is Program Officer for LISC LA – Local Initiatives Support Corporation. LISC LA’s mission is to work with residents and partners to forge resilient and inclusive communities of opportunity – creating great places to live, work, visit, do business and raise families. www.lisc.org/los_angeles

 

Categories: Opinion | Political
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