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