Posted at 8:00 AM
National Association of Minority Contractors
Northern California Chapter - 1st Annual Gala
Good evening! Thank you for that wonderful introduction. I am honored to speak this evening at the FIRST annual gala of the Northern California chapter of the National Association of Minority Contractors (NAMC). NAMC is a strong ally of the Minority Business Development Agency (MBDA) in our shared mission to foster the growth and global competitiveness of minority businesses across the nation.
I would like to thank Mr. Len Turner for inviting me to speak with you this evening, but I would also like to recognize him for the considerable contributions that his company, Turner Construction Group has made to the Northern California economy. Building a company that has created 462 jobs and employed 54 subcontractors is no easy feat and it is something that should be applauded – so let’s give Len a round of applause! To Mayor Quan, Mayor Lee, County Supervisor Carson, Council member Brooks, Judge Thompson and distinguished guests for over 40 years our goal at MBDA has been to create jobs for all Americans by expanding the U.S. economy through that sector of our economy called the minority business community.
This sector represents over $1 trillion in economic output to the nation creating nearly 6 million jobs directly and tens of millions of additional jobs for Americans through its economic activity. But during a time in our nation when a public debate on our values is underway—the values that we as Americans will embrace today and those that our children will embrace in years to come - an important question must be answered: Should our nation place special value on the minority business community? Does it really matter to our success as a nation if the business community within an ethnic subgroup is strong?
I would like to take a moment and address this pivotal question.
I view our nation through the prism of the wealth gap and today the gap between the rich and everyone else has grown to unprecedented levels. According to a recent study, the top one percent of American families has an average annual household income of $1.1 million. The bottom 90 percent of American families have an average annual income of just $31,244. Since 1979, the average income of the top 1% of American families has grown over 120%. During the same 32-year period, the bottom third of American families have seen their income range from no growth to down 30% while the cost of living has continued to skyrocket.
But the gap in net worth between the rich and the rest of us is even more pronounced. According to the Federal Reserve Board, the top 1% of U.S. households own a full 33.8% of all the private wealth in the Nation. The bottom 50% of U.S. households own a scant 2.5% of the private wealth of our nation.
How many people here have stocks, bonds, and mutual funds? The top 1% of U.S. households own 50.9% of all stocks, bonds, and mutual funds. While the bottom 50% of families in America own just 0.5% of all stocks, bonds and mutual funds.
And if you are a single woman of color in your prime working years, your median net worth is only five dollars. Let me say that again: if you are single, a woman of color and in your prime working years your median net worth is only five dollars.
In a nation built on the foundation of private business ownership, communities who do not have strong business communities do not have strong wealth bases, as private business ownership is the key component of a strong wealth base. And communities that do not have strong wealth bases do not have the power to choose their own destiny.
In communities with strong business foundations, public schools function, crime is controlled, books find their way into libraries and children do not fear going to school. But in communities that don’t have strong business foundations it is just the opposite: public school tend not to function, crime is rampant, health care support is challenged and many of the most promising minds fall to the victimization of drugs or violence or loss of hope.
But minority-owned businesses do much more than act as a physical presence, they create good jobs. They create jobs much faster than non-minority-owned businesses and many of these jobs are created in communities with high levels of unemployment. While the national unemployment rate hovers at about 8.8%, the unemployment rate is 11.3% for the Hispanic community and 15.5% for the African American community. Creating a job in an area of high unemployment means that you help stabilize the community, you increase the tax base and you insure a future for that family.
Minority entrepreneurs also are an engine of innovation, directly supporting the competitiveness of our nation.
Every day the Len Turner’s of the world and many of you here this evening create more efficient ways to deliver products, develop new and exciting manufacturing models and create innovative solutions in such industries as bio technology, clean energy, information technology and construction.
From the creation of the legs on the lunar module that landed the first person on the moon, to the creation of the bow-flex exercise equipment—some of the best innovations in our nation have come from minority entrepreneurs and these innovations make America stronger.
Finally, minority-owned businesses are the future of our nation’s economic focus. As we move towards a national economy built on exporting, the competitive advantage that minority-owned businesses have in the global markets will become much more apparent.
Many of you might be surprised to know that minority-owned businesses are twice as likely to export as non-minority owned businesses. If the future of our economy is to be export focused, it will be the minority business community who will be the ultimate driver.
Does it matter that there is a strong and vibrant minority-business community in America? Yes!
Is the minority business community important to the success of our nation? More important than ever before.
The President is committed to helping minority-owned and operated businesses prosper. I would like to take a moment to share with you what our administration has done on behalf of minority-owned businesses:
Since coming into office, we have cut taxes 17 times on small businesses;
We now have zero capital gains taxes on key investments in small businesses and we have instituted new deductions for healthcare for the self employed;
If you purchase machinery or equipment in 2011, you can write off 100 percent of the cost, thanks to our new small business expensing benefit;
We are putting the finishing touches on the Small Business Lending Fund, which will provide over $30 billion in capital to community and small banks to support lending to minority and small businesses;
We have dramatically increased equity capital availability through the expansion of the Small Business Administration’s SBIC (Small Business Investment Companies) program.
And my agency, the Minority Business Development Agency, has increased contracts and capital to minority-owned firms by over 65 percent since our administration took office. This equates to nearly $7 billion in contracts and capital that we helped minority-owned and operated firms obtain. We are working with agencies throughout the government to increase public contracting opportunities for minority-owned firms, both large and small. And to develop stronger policy solutions for the minority business community, Secretary of Commerce Gary Locke launched a Secretary-level advisory board on minority business enterprises. This board is the first of its kind since the 1970’s.
The White House has launched a new initiative called “Startup America”, which is designed to increase the number and scale of new high-growth firms that are fueling development, spurring innovation and creating high-quality jobs. And on the international side, the Department of Commerce is reaching across borders and oceans by launching a series of trade missions, which we are inviting you to join. Historically, minority business owners were not aware that these trade missions even existed, but now the door is wide open for you to participate! Finally, through our 40 business development centers nationwide, MBDA will soon be training minority-owned firms across the country on how to access the global markets. But what else can be done? How can we make minority-owned businesses bigger and stronger and more able to compete in the global arena?
I’d like to conclude my comments by offering a few suggestions.First, we must adopt new growth strategies. We need to grow our businesses more aggressively. In order to do this, we have to change the way we think about growth and consider growth through merger and acquisition, joint venture and strategic partnership. And to do this many of us will have to change the way we evaluate equity ownership. Far too many minority-owned businesses view ownership as an all or nothing proposition – it is better to have 100 percent of something small than 50 percent of something big. We have to change this mentality.
Second, we need to globalize our business models. Ninety-five (95%) percent of consumers live outside of the United States, and with the opportunities that are available to the “Made in America” brand around the world, we have to think more globally. Again, this may necessitate changing the way we evaluate strategic partnering and joint venture arrangements. Finally, we have to work more closely together, trust each other and support each other’s growth.
I want to thank you for allowing me to speak with you this evening. There is no doubt that this nation needs you to be successful and our Administration, the Obama Administration, is here to help. Partner with us and allow us to partner with you. Let your voices be heard in every sector of government. Raise the awareness of the importance of growing minority-owned firms. And together, we can build the type of minority business community that will strengthen the foundation of prosperity for our families, our communities, and our nation.