NYC: Disparity Among Minority and Women Business Enterprises

While New York City presents itself as the City to watch for needed reforms and best practices, it has yet to deliver on its promise to include MWBEs in the economic framework.

New York City has always been plagued by a large disparity in contract procurements between business enterprises owned by women or minorities and those owned by white males. Historically, minority and women owned business enterprises have had difficulties obtaining contracts to work with the City. Even towards the end of 2018, our city still must overcome these great economic inequalities. In 2013, the City recently passed Local Law I to promote initiatives in order to mitigate this divide. While New York has made significant progress to promote equality in the marketplace for city contracts, there is still much work to be done in order to achieve economic equality.

While New York City presents itself as the City to watch for needed reforms and best practices, it has yet to deliver on its promise to include MWBEs in the economic framework.

In 2015, Mayor de Blasio made a goal under the OneNYC plan to award MWBEs $16 billion in contracts, or 30% of total dollars awarded in contracts by 2025. Under the previous legislation, MWBEs have been awarded approximately 16%-20% of the total contracts. Although much progress has been made to reach the goal of 30%, there is still much work to be done.

The NYC MWBE Experience By the Numbers:

Minority and women owned firms involved in the architecture and engineering sectors experience a utility of 4.03% of the market. This entails a 0.11% for African American firms, 2.78% for Asian American firms, 0.31% for Hispanic American firms, 0% for Native American firms, and 1.16% for Women-owned firms.

MWBEs active in the construction industry experience a utility of 19.45% of the market. This means a 3.49% for African American firms, 4.98% for Asian American firms, 3.32% for Hispanic American firms, 0.01% for Native American firms, and 8.64% for Women-owned firms.

MWBEs participating in the professional services industry experience a utility of 8.24% of the market. This provides 0.88% for African American firms, 4.33% for Asian American firms, 0.85% for Hispanic American firms, 0.00% for Native American firms, and 2.92% for Women-owned firms.

MWBEs active in the standardized services industry experience a utility of 7.11% of the market. This entails a 1.02% for African American firms, 1.18% for Asian American firms, 1.11% for Hispanic American firms, less than 0.01% for Native American firms, and 4.46% for Women-owned firms.

MWBEs involved in the goods or commodities industry experience a utility of 9.59% of the market. This means a 0.63% for African American firms, 1.70% for Asian American firms, 1.48% for Hispanic American firms, less than 0.01% for Native American firms, and 6.55% for Women-owned firms.

On top of all the shared issues with the MWBE program, many participants continue to experience discrimination and poor treatment when working with the city. 6.81% of M/WBE firms working as primes claimed to have experienced discrimination working with the City. 6.80% of M/WBE firms working as subcontractors indicated discrimination working with the City’s primes. 11.56% of all M/WBE firms indicated discrimination working in the private sector.

By John Govan, Fellow