California lawmakers must commit to small, minority-owned businesses

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California has been reeling with multiple crises that have wreaked havoc on our health and economy. 

Communities of color and other marginalized groups have borne the largest burdens. As the leaders of California’s Asian, Hispanic and African American Chambers of Commerce, we are working with small, minority-owned businesses daily as they struggle to make ends meet in an increasingly difficult economic environment.

After nearly a year with a pandemic, historic wildfires, blackouts and the ever-pressing scourge of racism, we are seeing the suffering of minority small-business owners like never before. They aren’t just falling through the cracks; they’re falling off cliffs.

The good news is that California lawmakers can do something to help. This month, Assemblymember David Chiu, a Democrat from San Francisco, introduced the Economic Equity First Act of 2021, Assembly Bill 915. This bill increases access to state procurement opportunities for small-, minority- and women-owned, and disabled veteran-owned businesses. It would codify a 2006 executive order from Gov. Arnold Schwarzenegger that set a 25% procurement goal for small businesses contracting with the state. A worthy goal that could bolster the economic outlook for many California communities.    

The problem with an executive order, as we have all come to learn, is that there is no certainty behind it. These orders can change on a whim. And if they stay on the books, there is little one can do to enforce them. For small-business owners this equates to confusion, constant change and a lack of accountability. 

Small businesses live or die on accountability. AB 915 speaks the language of a business owner. It does two very important things: 1) it puts into statute the expectation that the state will meet its 25% small-business procurement goal and 2) adds the accountability and enforcement that the state will proactively outreach to minority and underserved businesses. This is done through the small business liaisons that already exist within every state agency.

Small businesses make up 99.8% of all California businesses, accounting for 7 million employees across the state. Of California’s 4.1 million small businesses, 1.2 million are minority owned.

The Economic Equity First Act would significantly bolster outcomes for these businesses. More state contracts for local small businesses means more families are fed, more neighbors have jobs and more communities are able to thrive economically. 

No matter who you are, doing business in California is hard. It’s even more difficult for minority businesses which have disproportionate barriers to success. If the state can move the needle to meet its 25% small-business goal, that’s life changing for these businesses and the communities that rely on them. 

Businesses like Printivity, with nearly 75 employees and 40,000 customers –  many of whom are new and small businesses. Founder Lawrence Chou sees AB 915 as an opportunity for him and his customers to thrive. Because the policy would put opportunities front and center for minority-owned businesses that are often overlooked, Lawrence believes this can shift mindsets and encourage more people to compete for larger contract opportunities that bolster economic activity in their communities. 

Our respective Chambers of Commerce have unified to sponsor AB 915. With the economic challenges and ongoing inequitable systems that hold our economy back, it is beyond time to commit to small- and minority-owned businesses. They have been sitting in limbo for 15 years. It’s time for California lawmakers to prove that they mean it when they say: “Small businesses are a priority” and “small businesses are the backbone of our economy.” 

We urge our lawmakers to support the Economic Equity First Act and make a real difference for California’s critical small businesses. 

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Pat Fong Kushida, Edwin A. Lombard III and Julian Canete have also written about how small businesses in California need financial relief.