Obama Stimulus Criticized for Leaving Out Minority-Owned Firms

The Obama Administration has been accused of not being responsive to the challenges of Black and Hispanic businesses. This criticism was bolstered by recent news that even though Latinos and Blacks own 6.8 and 5.2 percent of all businesses respectively, they are only getting 1.7 and 1.1 percent of the stimulus contracts. The government has issued $46 billion dollars worth of contracts as part of their economic recovery plan. This is only a fraction of the $862 billion being given out in the entire package.

In addition to the money in the federal stimulus bill, billions more has been given to states to give out contracts themselves. There is no central database to record the amount of this money that has been given to minority contractors.

One of the challenges is that minority businesses are often too small to compete for projects and don't have access to the capital and equipment used by larger, more established companies. Also, the push to spend the stimulus money quickly makes it more likely to land in the hands of more established companies.

African Americans and Hispanics are finding that their unemployment rates have skyrocketed as a result of the economic downturn. There is also an inaccurate count of the number of Americans who are either underemployed or have given up looking for work. These numbers are also found to increase faster for minorities than for whites.

The Obama Administration has taken some steps to address the issue of minority exclusion. Transportation Secretary Ray LaHood wrote governors back in December to request that they consider working with disadvantaged businesses. He argued that large contracts could be unbundled to make them more accessible for small companies.

It is my hope and expectation that they do the right thing. Give the administration time and evaluate the results in three months. If the issues have not been corrected by summer, then we've got a serious problem.