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Current status of Black and Brown-owned businesses in Rhode Island? D+



“…RIBBA is looking forward to using the current focus on promoting racial justice to create greater access to capital and more equity in government procurement opportunities in the years and decades to come…”

The Rhode Island Black Business Association (RIBBA), an organization founded in 2011 to support minority business owners recently commissioned a study to survey the current status of Black and Brown-owned businesses in Rhode Island. The findings are not good.

  • Compared to neighboring states (Massachusetts, Connecticut and New York), Rhode Island’s small businesses have the smallest payrolls and are the lowest in total receipts;
  • Black and Brown-owned businesses in Rhode Island are significantly smaller than white-owned small businesses: There are no Black-owned business with 100 or more employees in Rhode Island; and
  • 61% of Black owned and 54% of Brown-owned small businesses in Rhode Island have four or fewer employees. Comparatively, 50% of white owned small businesses employ 4 to 20 workers.

“Governor Raimondo is known for her business acumen,” said Lisa Ranglin, President of the Rhode Island Black Business Association. “However, while she is rightly focused on wooing large companies to Rhode Island, it is equally important that there is an acknowledgment that 64% of our nation’s new jobs are created by small businesses. To that end, the need for robust investment in small businesses needs to be paramount. Small business ownership is important to Rhode Island’s economy. Business ownership is even more important to Black and Brown people who don’t have the same opportunities as white owned small business owners relative to higher education for personal improvement, or access to capital and supply lines when they start their own businesses.”

When Black-owned businesses are doing well, it benefits the state’s tax rolls, boosts the state’s economy, reduces unemployment claims, lowers crime rates, and supports families while reducing hunger, health care needs, and income inequality. Those are only some of the many benefits to be derived from supporting minority businesses.

A RIBBA client, Graig Bustillo, owner of True Quality Construction put the benefits this way:

“…my construction business creates jobs for young men and women, gives them the opportunity to work, to make money, to start a career … and with so much construction money and jobs out there right now, there’s no excuse for Black and Brown contractors and workers to be shut out.”

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“With our supporters, RIBBA is looking forward to using the current focus on promoting racial justice to create greater access to capital and more equity in government procurement opportunities in the years and decades to come,” says Ranglin. To achieve long range goals, Ranglin and the Board of RIBBA are working with Rhode Island Commerce Corporation to develop solutions to support Black and Brown-owned businesses. Among the issues that require a solution is Contract Compliance.

Jhonny Leyva, President of the Rhode Island Black Contractors Association emphasized the need for enforcement, stating, “without enforcement, contract compliance policies, plans and strategies intended to include Black and Brown businesses are useless.”

“While working on long term solutions, businesses need help in the short-term, and they need that help immediately to ensure that businesses that have been closed due to COVID-19 can reopen and stay open,” added Ranglin.

Important on both a short and long term basis, John Cruz, President, the Center for the Advancement of Minority Participation in the Construction Industry advocates, “putting in place a system to ensure prompt payment from city and state agencies to small contractors.” RIBBA and their supporters have identified a number of solutions to the current crisis facing Rhode Island businesses owned by People of Color. Those solutions will be shared at our press event.

They include:

  • Rescind the MBE waiver – currently Prime Contractors are telling Black and Brown contractors that they no longer need to include Minority Business Enterprises (MBEs);
  • Increase the government procurement participation goal for Black and Latino contractors to reflect the increased minority population in Rhode Island;
  • Issue an Executive Order to establish preference in state contracts where Black and Brown people are the predominant group to be served or when contracts are cited within a neighborhood where the population is 20% or more minority;
  • Pledge at least 20% of funding to economic development in Black and Brown communities;
  • Work with organizations led by Black and Latino leaders;
  • Increase loan funds available through Black and Latino organizations;
  • Establish a Contract Compliance office outside of government to monitor and enforce compliance to MBE commitments. The office to conduct compliance will check on awarded contracts to ensure contractors use MBE firms at all levels as committed to the bid and the contract. Included in responsibilities, the Contract Compliance office will investigate complaints of non-compliance and develop corrective action plans as needed;
  • Establish a clear line of authority to the office of the Attorney General or other legal entity to ensure enforcement;
  • Implement a Pay Audit System to be used by Prime Vendors and their Subcontractors to independently report payments from Prime Vendors to the Subcontractors on state contracts; and,
  • Implement Executive Order 13-05 signed by former Governor Lincoln Chafee, to promote greater minority representation in the state workforce to better reflect Rhode Island’s changing demographics.

“As many entities close out their fiscal year and the third quarter of 2020 gets underway, we want to call attention to the urgent fact that we need to act now to ensure that Black and Brown owned businesses withstand the economic downturn brought on by COVID-19 and survive to see 2021,” said Ranglin.