In his 69-minute State of the Union Address last week President Obama reset his administration’s agenda with a renewed emphasis on job creation and small business development. He stated: “We cannot afford another so-called ‘economic expansion’ like the one from last decade — what some call the ‘lost decade’ — where jobs grew more slowly than during any prior expansion.†To put more than 15 million Americans back to work, the President proposed, among other items, making use of the $30 billion in TARP funds that major financial institutions repaid to the government to fund small businesses and provide a one-year, $33 billion tax credit to encourage small companies to hire workers. Moreover, he urged Congress to pass a jobs bill — a $174 billion version was passed in the House last December. He is seeking to achieve a delicate balancing act as he unveils his record balancing act, making investments in such areas as education and clean energy while imposing a domestic spending freeze to reduce the trillion-plus deficit.
Against this backdrop, BLACK ENTERPRISE in partnership with Walmart held its own forum to evaluate the economic and financial state of black America. Under the banner, “20/20 Vision: A Look Ahead at Black America in the Next Economic Boom,†the event brought together business leaders, policy makers, economists and entrepreneurs to discuss issues vital to the future of African Americans and the nation as a whole: jobs and workforce readiness; small business and innovation; and financial reform and wealth building.. The dialogue resulted in a series of policy recommendations directed to the Obama Administration as well as strategies for black-owned businesses, trade associations and other organizations shaping future plans. The analysis and recommendations came from a group of the best and brightest including BE Board of Economists members Bernard Anderson and Thomas Boston; BE 100s CEOs Janice Bryant Howroyd of temporary services giant Act-1 Group and Bill Mays of Mays Chemical, financial powerhouses Christopher Williams of Williams Capital Group LP and Eugene Profit of Profit Investment Management. Input was also provided from a cadre of Obama Administration officials: Labor Secretary Hilda Solis, United States Trade Representative Ron Kirk, White House Domestic Policy Council Director Melody Barnes, Commerce Department Senior Advisor Rick Wade, Presidential Economic Advisor Jared Bernstein and National Director, Minority Business Development Agency David Hinson. In reviewing policies in wide-ranging areas such as the green economy, education, global trade, financial reform and capital formation, many of these officials encouraged forum participants to play a role in the policy-making process by offering suggestions and feedback.
Although the Great Recession is officially over — Commerce reported on Friday that US GDP grew by 5.7% in the fourth quarter of 2009 — long-term joblessness continues to persist, especially for African Americans who must contend with the current 17.2% unemployment rate and rates in five states exceeding 20%. “There’s an old saying that when whites catch a cold, blacks get pneumonia. Joblessness is at the foundation of the dysfunction in black communities,†Wade asserted in his remarks.
Economist Anderson underscored Wade’s point. In his presentation as a panelist on the Jobs and Workforce Readiness panel, he maintained that blacks comprise 44% of the long-term unemployed and large numbers have given up finding a job. He further stated that traditional manufacturing and service jobs will not return with the recovery because of structural changes in the US economy. Furthermore, he says green jobs will not be able to make up for a good number of those positions. Act-1’s Howroyd, however, was optimistic in surveying the new business landscape. More individuals, she says, will have to come to grips with the fact that a large segment of the labor
market with be comprised of a “permanent temporary workforce†in which workers will have to become more portable. And the shift to energy and technology sectors will require mass retraining and lifelong education. The upside: She believes opportunities will be bountiful for a new breed of “nimble workers.â€Â Another jobs panelist, United Negro College Fund President & CEO Michael Lomax maintains that historically black colleges and universities will play a vital role in the preparation of African Americans for emerging industries in the near term as well as over the long haul.Entrepreneurship will serve as another driving force for future employment and economic advancement. In an interview session on small business and innovation, Philadelphia Mayor Michael Nutter asserts business growth and employment opportunities can flourish through more expansive public-private collaborations on the local level. In the complementary panel on small business and innovation, MBDA’s Hinson asserts “minority business must enter strategic alliances to compete for larger contracts and gain access to capital. It is important
to remember all minority businesses are not small.†(For more detailed reports, see Black Enterprise Business Report (airing Feb. 6); upcoming video reports on BlackEnterprise.com; and the April 2010 issue of BLACK ENTERPRISE magazine.)Using the dialogue and ideas from forum sessions, BE has developed what could be considered the first draft of an action for black America — a series of initiatives that serve as policy recommendations for the Obama Administration as well as directives for African American business owners, trade associations and civic groups.
RECOMMENDATIONS TO THE OBAMA ADMINISTRATION
-Â Â Â Seek more advice and input from African American CEOs, labor leaders and financial firms in policy-making. For instance, Obama Administration officials should consult with minority business owners before finalizing plans on how it will use TARP funds to make working capital loans available to small companies.
-Â Â Â Create a direct lending facility for businesses. In order to ensure that small and medium-sized businesses receive adequate funding to meet immediate needs, the federal government would develop a body similar to the Federal Emergency Management Agency to provide direct financing to such companies.
-Â Â Â Streamline certification and review rules in the government procurement process and financing criteria. Businesses continue to be hampered by government red tape to gain consideration for contracts and other programs. The emphasis should be place on making government contracts more accessible to minority firms.
-Â Â Â Ensure greater unbundling of government contracts. By doing so, the Obama Administration will create a more diverse pool of small and medium-sized suppliers to handle stimulus infrastructure work and other government contracts. As a result, more employment opportunities will be created.
-Â Â Â Include greater involvement from HBCUs in programs that prepare students for college and skill-based employment. Although community colleges play a valuable role in education and retraining efforts, HBCUs will ensure that African Americans gain four-year degrees to participate in clean energy, information technology, biotechnology and other emerging industries.
-   Establish a new G. I. Bill to provide expanded employment and entrepreneurial opportunities. Based on a concept offered by Philadelphia Mayor Michael Nutter who indicated that “veterans represent 25% of my city’s homeless population.†African American Iraq and Afghanistan war veterans — a number of whom are disabled — continue to be among the hardest hit by the current economic environment and require training and skills development.
-Â Â Â Provide tax credits to incentivize individuals to put money aside for retirement. Even though 401Ks and IRAs are vehicles available to finance retirement, there are too many individuals — especially minorities — that don’t access such programs or use them effectively. Additional incentives will encourage more individuals to participate in investing and other such wealth-building efforts.
-Â Â Â Create early-stage financial literacy and entrepreneurial development programs.
RECOMMENDATIONS TO BLACK BUSINESS
-Â Â Â Become fully involved in gaining information and finding access points for government employment, education and business programs. Whether its Race to the Top education grants, stimulus contracts or programs tied to the green economy, African Americans must be proactive in pursuing services that will help them advance as entrepreneurs, professionals and investors. For instance, Black entrepreneurs should seek contracting opportunities across several agencies including energy, agriculture and transportation. Black business organizations, civic groups and industry trade associations can play a greater role in providing information and direction on how to access programs made available by the Obama Administration.
-    Create partnerships to gain access to capital and larger contracts. A strategy that is staunchly advocated by MBDA’s Hinson, minority businesses will be able to gain greater economies of scale as well as the ability to pursue more lucrative tier 1 corporate contracts and expansive government stimulus work through the formation of joint ventures and, in some cases, serving as investors
-   Develop public-private partnerships. Black businesses must connect with state and local government officials and press for greater inclusion in programs and projects — especially as a growing number of municipalities create “green zones†and other initiatives tied to emerging industries.
-Â Â Â Black businesses should serve as incubators for next generation of entrepreneurs. These companies would provide paid apprenticeships for individuals in a range of growth industries.