Can Obama Pave The Way to New Jobs?

Standing before a union crowd in Milwaukee on Labor Day, President Obama rolled out new economic initiatives that he hopes will help spur the nation’s economy and job growth and send a message to the American public–and his party, which is plummeting in the polls–that he gets it.

The proposals includes $50 billion in funding to rebuild 150,000 miles of highway roads, 4,000 miles of rail, 150 miles of airport runway and modernize the nation’s air traffic control system. In addition, the president is calling for a government-run infrastructure bank that would leverage private, state, and local capital to invest in infrastructure projects.

“This will not only create jobs immediately, it’s also going to make our economy hum over the long haul. It’s a plan that history tells us can and should attract bipartisan support,” Obama said. “It’s a plan that says even in the aftermath of the worst recession in our lifetimes, America can still shape our own destiny.  We can still move this country forward.  We can still leave our children something better.”

As far as the overall economy goes, says Georgia Tech economist Thomas Boston, Obama’s plan is a good idea because it will help the nation, which is part of a global economy, become more competitive.

“The global competition we’re facing now has forced corporations across the board to drastically downsize their workforce and become more lean and mean,” Boston said. “Obama’s proposals would make the entire economy more competitive through investments in transportation and infrastructure that benefit businesses in general.”

But for black businesses, the news is far less optimistic. Boston, who also sits on the BE Board of Economists, predicts that the president’s proposals will have very little impact on those firms. That’s due in large to the fact that only the largest corporations have the capacity to manage many of the types of projects Obama is targeting. In addition, his research has found that the state transportation agencies that issue the associated contracts tend to subcontract to the same small pool of minority firms.

“Only to the extent to which they and the large firms

include minority businesses will there be any kind of participation,” he said. “One of the things some lawmakers are pushing for is to have more transparency, reporting and disclosure on the extent to which prime contractors are subbing to small, medium and large firms. We need to have some accountability so we know what’s happening; otherwise we can’t begin to make an adjustment.”

Richard Copeland, president and CEO of Minneapolis, Minnesota-based Thor Construction (No. 37 on the B.E. Industrial/Service 100 list with $104 million in sales), believes that just as with the stimulus program, a great majority of minority firms will be left out unless Congress specifically stipulates rules for their inclusion. He said that black firms were given some opportunities as an “afterthought” after organizations like the National Association of Minority Contractors aggressively vocalized their discontent.

“This time it’s imperative that the federal government put some stipulations on the money at the point of release, mandating our inclusion in that expenditure,” Copeland said. He and other minority contractors plan to stress that point with lawmakers during next week’s Congressional Black Caucus

legislative conference.

“We’re nervously optimistic that this time we’ll be on the front end of this curve, rather than an afterthought,” he said, adding that it is incumbent upon minority businesses to fight even harder for opportunities. “We believe in this government and this administration wanting to do the right thing, but know what the right thing has been a learning curve for the administration. Shame on us if we don’t make something happen in this round.”

Firms like Copeland’s, that are mid-size and have a good deal more capacity than the typical minority business, often find themselves in a “no man’s land,” as he puts it, between small, disadvantaged businesses and the large firms “that gobble up 90% of the money.” He believes provisions for the inclusion of firms like his would make an enormous difference to the ability of smaller minority firms to participate in this latest initiative by trickling down opportunities.

“We’d make sure that there’d also be the successful inclusion of small contractors. There’s a difference between that and the window dressing that takes place. We know how to do that so those small African American firms can grow and create more companies like ours.”

Whatever happens may be a long time coming, however. Most analysts agree that the president’s proposals may have come too late. When lawmakers physically return to Washington next week, their minds will still be back home and on their local polls. Given how dismal the Democrats’ November prospects are looking, they’ll likely have little to no appetite for anything that will aid Republican efforts to bill them as deficit-increasing builders of big government.

“I don’t know why this didn’t come out a good deal earlier or if it’s going to be a game changer for anybody,” said DePaul University political scientist Michael Mezey. “The Republicans certainly don’t want the game to be changed and I’m not certain Democrats will be helpful. They’re caught between wanting to do something about the economy but don’t want to be labeled big spenders, so they’ll be reluctant to vote on anything.”