Transit agencies around the country award millions of dollars in contracts every year, but only a fraction of those dollars go to businesses owned by women or minorities.
As we reported over the weekend, the Washington Metropolitan Area Transit Authority set a goal last year to award 25 percent of its contracts to woman- or minority-owned firms. The agency hit 11 percent and has lowered the goal for this year.
Though Metro’s not the only agency in the country that fell far short of its goals, it is among the worst. The Federal Transit Administration maintains statistics for the 50 transit agencies nationwide that receive the most federal funding, tracking targets and annual performance for the diversity among outside contractors.
For the 2016 federal fiscal year, Metro failed its goal for diverse contracting by 54 percent. Here were the other worst performers, based on the margin by which they failed to meet their target:
The best performers? The Niagara Frontier Transportation Authority in Buffalo, the Tri-County Metropolitan Transportation District of Oregon and the Puerto Rico Highway and Transportation Authority. Other transit agencies in very diverse cities such as Honolulu, Chicago and Miami also made the top-10 list.
All told, 19 of the country’s 50 largest transit agencies fell below their goals for diversity in outside contractors.
Some readers of our original story asked: What’s this a big deal? After all, Metro’s workforce is well-represented by people of color. Of Metro’s 12,514 employees, 74 percent are black, nearly 15 percent are white, almost 6 percent are Hispanic, just over 5 percent Asian or Pacific Islander, and 0.4 percent are American Indian.
But there’s a difference between workforce diversity and diversity among contractors.
It comes down to wealth and assets.
The history of transportation infrastructure is one of lucrative projects that funnel wealth to the people with the most connections and the best institutional knowledge about how to get their company picked for big government contracts. Sure, rank-and-file workers benefit from the jobs and wages that these projects provide. But usually, the biggest beneficiaries of government contracts are people who own the businesses that manage to land these contracts.
And, in the long-term, it makes a difference whether these opportunities are spread around.
Wealth begets wealth. Small companies use modest-sized projects to gain the experience and capital that help them grow and land bigger projects. Once the market fills with larger and more experienced companies in a particular in contract industry, it becomes increasingly difficult for smaller businesses to compete — even if, for decades, there were myriad legal and social hurdles that prevented women and people of color from gaining the years of experience and asset acquisition that would allow them to become big players in the world of government contracting.
What were some of these hurdles? Access to credit. Restrictions on available job opportunities, especially in fields like construction or tech. Urban renewal projects that demolished neighborhoods and bankrupted businesses owned by minorities.
In an October 2016 report called “The Color of Wealth in the Nation’s Capital,” the Urban Institute offered some evidence that these disparities in opportunity have long-term effects:
Although there is a fairly sizable share of Black-owned firms in DC, especially relative to Black-owned firms nationwide, the share of business sales receipts going to Black-owned firms in DC and the nation is much lower than for White-owned firms. Comparable statistics for Latinos and Asians reveal that Latinos, business sale receipts in DC and across the United States are lower, while Asian business sales receipts are on par or higher than what would occur if business sales receipt were racially and ethnically equally distributed.
The report goes on to explain the cycle that keeps wealth out of the hands of the people who have historically had the least access to entrepreneurial opportunities:
There is a tendency to attribute the racial wealth gap to individual character flaws among people without wealth. … history of the structural barriers in local and national policies, Supreme Court rulings, programs, and practices … created wealth for many White families and prevented wealth accumulation or stripped wealth from many Black families.
That’s why, in 2015, Congress decided to strengthen the requirements for transit agencies to increase and document the participation of women and minorities in contract work.
Earlier this month, D.C. Del. Eleanor Holmes Norton (D) argued why she believes this legislative language was necessary — and why agencies like Metro need to work harder to increase the diversity among the ranks of contractors who provide critical services.
“You don’t do it to be nice, but you do it because of the long history of discrimination in the construction trade — as manifested in Metro as well,” Norton said. “We’re still in the process of curing historic discrimination.”
Correction: A previous version of this graphic placed Washington’s Sound Transit at the seventh spot on this list. Due to inaccurate numbers maintained by the Federal Transit Administration, that listing was incorrect: Sound Transit surpassed its DBE goal of 12.4 percent in 2016, spending 14.6 percent of contracting dollars on woman- and minority-owned businesses. The graphic has been updated to remove Sound Transit from the list, and add PATH to the No. 10 spot.