Impacted Population:

The New Jersey Disparity Study, released January 23rd, 2024, confirmed that Black-owned businesses in New Jersey have been systemically and intentionally deprived of opportunities to do business with the State of New Jersey for decades, and this practice persists. There are 1.2 million Blacks in New Jersey, and we have the highest poverty rates at 16.3% and an unemployment rate of 8.1% - a direct correlation to our economic stability. Forty-one percent of Black households own their home, compared to 77% of White households in this state. The Black and White homeownership gap is about 35%. The average net worth for Black New Jerseyans is $17,000, and for White New Jerseyans, their net worth is $322,000. All these measures – poverty rates, unemployment rates, home ownership, and net worth – speak to the economic stability of Blacks in New Jersey. Only 3.5% of the 88,000 Black-owned businesses in New Jersey have employees, which infers growth stagnation.

The 5-Year Disparity Study period, State Fiscal Years 2015 – 2020, revealed the following:

• Over one-third of state contracts were awarded to out-of-state businesses.
• Between all industries (construction, professional services, and goods and services), for prime and subcontracts, Black male and female-owned businesses never rose above 1% for the entire five-year study period.
• There were disparities for Hispanics, Asians, and White women, too.
• For at least one industry included in the study (construction, professional services, and goods & services), prime or subcontract dollars, there was no disparity for Asian, Hispanic, and White women. However, there was a disparity for Black men and women in every industry, both prime and subcontract dollars.

Cited in the report findings, the documented evidence supports narrowly tailored, race and gender-conscious remedies for the underutilization of minority and women-owned businesses in New Jersey.

Implications:

Black-owned businesses encompass the Black community in New Jersey. There is no separation because the economic stability of Black-owned businesses and Black employment rates are the nexus between all other determinants for the community – education access and quality, health care access and quality, neighborhood and built environment, and social and community context. The McKinsey Institute for Black Economic Mobility, in their February 2024 report, examined racial gaps over time in eight aspirational categories – standard of living, stable homes, connectivity, stable communities, financial stability, job opportunities, long and healthy lives, and skill development. According to the report, unless progress accelerates, it would take community profiles anywhere from 110 to 320 years to eliminate gaps in outcomes for Black and White residents.

The Fierce Urgency of Now:

• Increase small business set-aside from 25% to 45%
• Racial and Gender Conscious Aspirational Goals
  • 15% to Black-American-owned businesses
  • 20% to Hispanic-American-owned businesses
  • 10% to Asian-American-owned businesses
  • 1% to American-Indian and Alaska-Native-Owned businesses
  • 15% to woman-owned businesses

* The race and ethnic aspirational goals are based on the proportion of the racial/ethnic populations in the State of New Jersey.

• Limit out-of-state contracts to 10% or less
• Other Recommendations
  • Incentives for MWBEs
  • Bid preferences for MWBEs
  • Sheltered bidding process
  • Unbundled contracts
  • Set mandatory participation goals with MWBEs for bidders
  • Access to New Jersey’s approved contractor list
  • Education and capacity building for MWBEs
  • Government data collection, transparent tracking, and monitoring with interventions