A Work in Progress

February 23, 2008
Grand Rapids Press

Life under Proposal 2 has been tough for minority and women contractors looking to do work for the city of Grand Rapids. A preliminary study shows a sharp drop in the number of them getting a piece of city construction jobs. It's an indication that the state's year-old law banning affirmative action programs for governments and schools is working at cross purposes with helping historically disenfranchised people achieve economic success.

That task is now left to the private sector, which can make boardroom decisions that are cognizant of workforce diversity and economic inclusiveness. Those things are important in an increasingly diverse community and consumer base. They don't tend to happen on their own, if the diversity issue isn't forced or incentivized. In California and Washington State, which passed affirmative action bans a decade ago, minority and women contractors are getting much less government work than before the bans took effect.

In Grand Rapids, a year into Prop 2, fewer minority- and women-owned firms are being used as subcontractors on city projects, despite a 45 percent increase in construction spending. The number of minority subcontractors working on city projects fell from 31 in 2006 to 18 last year. Women subcontractors dropped from 18 to just six, a nearly 70 percent decrease. Minority firms received $2.6 million in subcontract work from the city in 2006, but that fell to $1.2 million last year. Subcontract work going to women-owned companies fell from $837,000 to $255,000.

While minorities and women are taking financial hits under Prop 2, business is booming for companies owned by white males. The number of subcontracts the city had with such companies jumped from 56 in 2006 to 147 last year. The dollar value of subcontracts with white
male owned companies soared more than 500 percent, from $6 million in 2006, to more than $30 million last year.

The city's preliminary report notes that some contractors may have stopped reporting subcontracts with minorities and women because they believed it would violate Proposal 2.
Fortunately, more private sector construction jobs have opened up because of diversity programs instituted by Spectrum Health, the Van Andel Institute and Christman Co., which is building the health care complex on the Michigan Street Hill in Grand Rapids. Spectrum has made minority participation part of the bid evaluations for contractors hoping to work on the $92 million Lemmon-Holton Cancer Pavilion, the $250 million Helen DeVos Children's Hospital and a pending $98 million renovation of Blodgett Hospital. That's a welcome development that other companies should emulate.

It's not about favoritism for minorities and women, but about economic progress and inclusion. Often minority- and women-owned companies are smaller, less established firms. They have little chance of outbidding bigger companies for major construction projects, in the public or private sector. They can, however, get a foothold in business by doing work that's subcontracted out on such projects.

Providing capable companies a chance to prove themselves and prosper is beneficial to the economic health of the entire area. A lack of diversity in work opportunities for minority- and women-owned firms is not the image this community wants to project as it tries to retain and recruit businesses and residents.