James Lowry is a nationally recognized workforce and supplier diversity expert, Senior Advisor for The Boston Consulting Group and co-author of Minority Business Success: Refocusing on The American Dream (Stanford University Press, 2011). Check the book out here: http://www.sup.org/book.cgi?id=20734
Previously a Senior Vice President at BCG and Global Diversity Director, Lowry led the firm’s workforce diversity, ethnic marketing, and minority business development consulting practice. He is currently a member of the Howard University School of Business board and serves as Chairman for the Howard University Entrepreneurship Center. With the economy stumbling along and blacks struggling more than any other group to find their footing, Lowry addresses five questions with candid answers that might help lift minorities to more solid ground.
We have to redesign our educational system and make it more effective.
- At 15.1% the unemployment rate for blacks remains nearly twice that of whites. What can be done to help address this problem?
Lowry: We need to ask government, “How much money is going to be made available to give training to black unemployed people and how much money is being put into infrastructure to help people get back to work?” What we’re seeing is that those programs and infrastructure investment might not be made. I think it is a very dangerous situation. If we had the best minds working on this problem, we ought to come up with alternative learning programs, business learning, and new educational opportunities. And the same thing for the trades: We need new training modules to affect this kind of underemployed population. [Note: President Obama met November 9 with African American leaders at the White House to discuss black unemployment.]
Over the long term we have to redesign our educational system and make it more effective in training and educating these young kids. The bottom line is they can’t get the jobs that corporate America wants to fill. This recession is different from other recessions. Usually, what lifted people up was construction but [job growth] in construction isn’t up. Most of the jobs are either on the west coast or on the east coast with companies and manufacturing industries that requires the sophistication that too many African Americans are not trained to get. So that is a reality check for us: African Americans need to ask, “How are we going to get these jobs… New Economy jobs?”
Discrimination has not gone away.
- A recent Economic Policy Institute study concluded that labor market discrimination is at the root of underemployment among black males. What do you think causes the employment disparity between white and black males?
Lowry: We’d be naïve to say that discrimination has gone away. It has not gone away. But we should also ask: Are blacks connected to potential job producers quickly enough? Case in point. When the Recovery Act went into effect there was construction work created as part of it. But very few dollars went to African Americans. What’s happening here? There was some communication to say there are construction jobs in Ohio and Mississippi. Same thing happened in South Carolina and Louisiana. But many of the workers that went down there for those jobs were not African Americans. The jobs were going to Latinos. You can only blame the other people so much. Hispanic construction companies and subcontractors had formed relationships with the large [mainstream] contractors offering work. So there was a comfort level that Latinos already had. And they got those jobs. We don’t have any large national or regional construction companies that are well networked with the mainstream contractors. After 60 years why aren’t there more black construction companies? Construction companies are a large part of GDP.
We have to learn to communicate major opportunities throughout the community. The Congressmen representing black communities should be able to tell African Americans about opportunities—not after the money has already left the front door but beforehand, when the opportunities are just coming available.
Today the threat is worse. Jobs are being shipped overseas.
- Why is it important for the overall U.S. economy that the problem of chronic black unemployment be rectified?
Lowry: The only thing the Democrats and Republicans can agree on is we have to create some jobs. In the 1960s when inner cities were burning, the nation realized it had to give these people some jobs and keep them from burning down our cities. Why can’t we learn from the experiences of the 60s? The goal was the same goal and the threat was against all of America. Today the threat probably is worse. Jobs are being shipped overseas. We have to put our minds together to come up with a master plan to deal with nearly16% unemployment among blacks and Hispanics. It won’t be that long before minorities are the majority of American people. If we continue to see them representing large percentages of the unemployed and dropouts, it doesn’t take a tarot card reader to see what might happen. We have to make all citizens producers of wealth and not just consumers of wealth. If we don’t then they will react accordingly. In Chicago there have been examples of minority kids stealing from tourists along the Magnificent Mile. I believe that is symptomatic. The unemployed are going to get money from somewhere.
Large corporations need to get serious about investing in and growing minority partners.
- During the expansion years between 2002 and 2007, black-owned firms outpaced the growth of non-minority firms. Since the recession, what has the entrepreneurial picture looked like for minority businesses?
Lowry: It’s still growing. Black-owned small businesses have the fastest growth rate, according to the Department of Commerce. Still, fewer than 5% of black-owned businesses employ more than five people. The fact is, women and minority businesses grow faster but they are mostly Ma and Pa businesses. About 98% of those businesses are single practitioners. What we don’t see is larger business that employ people. That has been a priority on the part of the Obama administration. But government can only be the catalyst. Most of the growth has to come from the private sector. More sophisticated and progressive [mainstream] corporations should be asking not only how much are we spending with minority-owned supplies and partners, but how many minority businesses are we growing? If large corporations take that approach and get serious about investing in and growing minority partners then over time we will have larger and more robust minority companies to do business with.
There is a disconnect between companies that have the money and the businesses that need the work.
5. Business becomes more global and more competitive every day. What do minority businesses need to do to adapt and thrive in this changing environment?
Lowry: Minorities have not been willing to go over seas to pay the price. We have to think differently. The thing that is shocking to me is that minority businesses don’t talk to each other. There is a real disconnect between companies that have the money and the businesses that need the work. There is real a need to develop an overall communication process so that all the players understand each other and learn from each other and get business from each other. Some of it is generational. There is a real break down between generations. But each generation has a lot to learn from the other. We must learn to talk to each other and partner with each other.