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About Portland observer. (Portland, Or.) 1970-current | View Entire Issue (Oct. 5, 1994)
i Volume XXIV Number 40 Serving the community through cultural diversity O c to b e rs , 1994 c SECTION Bureaucracy Versus Economic Development 4 Double Edge Sword D avis-B a co n Finds M in o rity O p p o s itio n by Despite the culture of dependency that plagues much of the African American community, some brave entrepreneurs are taking matters into their own hands, trying to break free of dependence on others by going into business for themselves. n Nov. 9, 1993, five small minority-owned contracting firm s and th re e te n a n t management groups, with the help of the Washington-based Institute for Justice, filed a lawsuit in the U.S. District Court for the D istrict of Columbia with the goal of eliminating one of the la s t re m n a n ts of institutionalized racism: the Davis- Bacon Act. O The act, passed in 19 3 1 with the support of the American Federation of Labor, was designed to prevent migrant black workers from competing with white laborers for scarce jobs during the Depression. By requiring that "prevailing” (usually union) wages be paid on all federal construction projects exceed ing $5,000, the Act shut most black trades man out of many federal construction projects, with jobs going instead to skilled white union workers. The act was amended in 1935, low ering the minimum contract cost to $2,000. Uncovering Davis-Bacon’s legislative history clearly reveals its racist intent. The act was originally drafted by Rep. Robert Bacon of New York in 1927, whose racist views were well known. In that same year, Bacon introduced into the Congressional Record a statement opposing uncontrolled immigration of non-whites that read “We urge the extension of the (immigration) quota system to all countries of North and South America from which we have substantial immigration and in which the population is not predominately of the white race... Only by this method can the large proportion of our population which is descended from the colo nists... have their proper racial representa tion... Congress wisely concluded that only by such a system of proportional representa tion... could the racial status quo be main tained. Bacon first drafted the act after an Ala bama contractor who employed only black laborers won a contract for a federal building in Bacon’s Long Island district. The act was one of many political measures supported by white union workers whose jobs were threat ened by skilled, non-union black workers. Today, Davis-Bacon continues to stifle black economic upward mobility. With roughly a fifth of all construction projects in America funded all or in part by the federal government, the building trades represent excellent opportunities for minority-owned contractors and their workers. Yet, Davis- Bacon puts minority-owned firms, which are usually small and non-union, at a severe competitive disadvantage. By imposing a super-minimum wage, and requiring the use of rigid, union-dictated job classifications, small, minority-owned firms arc forced to deal with artificially inflated labor costs. The Institute for Justice cites a contractor in Se attle forced to pay ditch diggers $40,0(X) a year in salary and benefits while a worker in Boston who hammers a nail must be classi fied as a “carpenter” and paid $60,000 in salary and benefits. Who are the victims of this legislation? Consider Tyronne Dash, a plaintiff in the case challenging Davis-Bacon and entrepre neur who owned and operated T & S Con struction in Seattle, from 1984 to 1990. Mr. Dash, an African-American, hired as many as 25 employees to work on highway jobs in H orace C ooper R onald N ehring and OREGON ARENA PROJECT Affirmative Action Contracting Status J...... -,,IU '— — ------- r DESCRIPTION FIRM BIDS SECURED MBE PARTICIPATION WBE PARTICIPATION ESB PARTICIPATION Private Improvements $77,365,751 82% $13,280,644 17% $6,225,634 8% $8,152,540 11% Public Improvements $15,727,364 71% $3,118,167 20% $2,457,379 16% $2,716,590 17% TOTALS: $93,093,115 80% $16,398.811 18% $8,683,013 9% $10,868,130 12% k CURRENT STATUS MINORITY BUSINESS WOMEN BUSINESS Many of these new entrepreneurs, how ever, are encountering an ominous opponent: onerous and arbitrary government regula tions. Indeed many of the same politicians who complain about ballooning welfare bud gets defend the myriad of ordinances, laws and bureaucracies that deny many their chance at living the American dream. It is an economic reality that tomorrow ' s African-American business leaders often must start at the beginning, building small compa nies that will eventually become large com panies, providing the African-American com munity with a steadily growing level of eco nomic self-sufficiency. Building these small companies, however, requires fresh opportu nities for work in occupations that do not require large amounts of investment capital. The taxicab industry is one example. Consider the case of Leroy Jones, Ani Abong, Rowland Nwankwo and Girma Molalegna. As experienced taxicab drivers in Denver, Colo, these four men, all African- Americans, formed their own company. Quick Cab, Inc., with the intention of providing taxicab service for the people of Denver. Distressingly, Quick Cab suffered the same fate as every other new cab company in Denver since 1947: it was denied an operat ing license. Denver, along with dozens of other cities nationwide, virtually bars entry of new companies into its taxicab market through an insurmountable array of regula tory barriers designed not to protect the pub lic, but rather to protect a small group of companies (in Denver’s case, three) from healthy competition. To operate a taxicab company in Den ver, a company must prove both that ad equate service is not provided and that the existing companies cannot provide such ser vice. Of course, there is not an objective set of criteria that an applicant for a “certificate of public convenience and necessity” can review to see just what constitutes “inad equate served." hence the same three compa nies have dominated the taxicab industry in Denver for over 40 years. Meanwhile, many qualified would-be entrepreneurs are denied the opportunity to earn a living. Ego B row n, a W ashington, D.C. shoeshiner. faced similar obstacles when the District of Columbia government insisted he close down his sidewalk shoe-shining busi ness. For several years, Mr. Brown had oper ated an outdoor shoe-shining business at various locations in Washington. D C .. serv ing the general public, and employing a num ber of homeless men whom he provided with showers, shoeshine Ipts and training In 1985, Mr. Brown’s general operating permit was revoked on the basis that it violated an ob scure regulation that barred anyone from operating a "bootblack" stand on public space. Similar businesses. Irke hot dog vendors, were perfectly legal. Indeed, more than 20years after the civil rights movement had produced a plethora of civil rights legislation, Mr. Brown was facing one of the last vestiges of the Jim Crow area, when laws were enacted to finger, if not 80% Bids Secured ▼ Continued to page C 12 Continued to page C12 Black Market Co-Op Business As Usual For Minority Contractors Tradeswomen Invited To Be Role models Mayor Wants To Improve Diversity The Black Market Co-Op was orga nized Forms To Support Black Busi ness Development. The effect o f mismanagement o f contracting bids on minority contracting programs. The Oregon Tradeswomen Network is helping young women make informed choices fo r their futures... Mayor Vera Katz is inviting applications fo r openings on the c ity ’s 45 boards and commissions. See page C4 M M m MMM m pi See page C 12 See page C2 See page C6