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Confessions of a "Woman-Owned Business" Owner

How I learned to love quotas.

(Page 2 of 4)

No, I wouldn't. Not with all those set-asides in the offing. Add the 10 percent price bonus the designated oppressed are entitled to charge -- "price evaluation adjustment," in federal procurement�speak -- and the incentive to fudge becomes overwhelming.

Set-asides and "evaluation adjustments" are as pervasive at the big-business end of the private sector as they are in government contracting. Expensive and inefficient these programs may be, but lawsuits are worse. The best defense against discrimination claims, corporate officers are constantly told, is an explicit, detailed, and overarching "affirmative action program" respecting hires, fires, and contracting. Point to this program, and a bevy of bugbears, from disaffected employees to muckraking journalists, will disappear. Besides, it's good P.R., and it allows corporate policy makers to feel good about themselves.

They're entitled to some self-esteem too.

These incentives give rise to preferences of mind-boggling complexity. Consider the "utilization chart" from a bid that came across my desk. It's for $9.5 million worth of work at a laboratory in Princeton, New Jersey. The categories can be sliced and diced indefinitely, creating a dazzling array of permutations. They may specify non-Dominican Caribbeans or non-Korean Asians, disabled people of various stripes, or inhabitants of selected neighborhoods.

The utilization rate for suppliers of "No. 1 Diesel And No. 4 Fuel Oils" adds up to 300 percent, a foot-note explains, because "incumbent supplier is a disadvantaged, women-owned, HUB-Zone small business." (A HUBZone small business is one in a "Historically Underutilized Business Zone.") Try competing with that!

I suppose it's not so different from the old days, when the incumbent supplier was apt to be the project manager's brother-in-law -- but it certainly isn't an improvement.

The old-time project manager wasn't forced to hire his brother-in-law, and he might even have had a chance of exercising some quality control over him. In this new, desperate rush to hire one-eyed Central Asians from south of the railroad tracks, price and quality necessarily weigh second at best.

My investigator congratulated me on passing his tests, apologized for their complexity, and shook my hand. My WOB documentation came through the next day. To my disappointment, it was not the fancy, frameable certificate dripping with ribbons and seals that I believed all my effort and angst -- not to mention my newfound oppressed status -- entitled me to, but just a faxed letter from the New York State Division of Human Rights.

Why'd We Wait?

It's still difficult for me to grasp just what is so hapless about us WOBs and MBEs that we merit entire taxpayer-funded bureaucracies to handhold us through the process of participating in the U.S. economy. According to the U.S. Census Bureau's 1997 Economic Census, the latest for which comprehensive data are available, both women-owned and minority-owned businesses are growing at a rate more than four times the national average. Between 1992 and 1997, the number of MBEs grew by 33 percent and the number of WOBs grew by 37 percent, while the total number of firms grew by only 7 percent.

In 1997 women owned 10.1 million American businesses (up from 6.4 million in 1992), or 46 percent (up from a third) of all domestic firms. They employed more than 18 million people (up from 13 million five years earlier), or one worker in seven, generating $2.3 trillion in revenues (up from $1.6 trillion). Similarly, revenues of the nation's 2.8 million minority-owned firms (up from 2.1 million in 1992) rose 60 percent, to $335.3 billion, while revenues for U.S. firms as a whole -- an aggregate that includes these high achievers -- increased by just 40 percent.

Growth rates during the previous five years were comparable, and nothing suggests that they have slowed down since. Clearly these sectors are dusting the rest of the economy. In fact, these stunning rates of expansion would be even greater if the Census Bureau hadn't decided in 1997 to change the way it defines MBEs and WOBs, omitting entire categories of firms that were previously counted. Publicly traded companies were dropped, along with firms whose successful, qualifying founder gave up equity to raise additional capital for growth.

It's impossible to say how much MBE-WOB growth is driven by "utilization goals" and set-asides. A contrary theory holds that old-fashioned prejudice, glass ceilings, and corporate inflexibility -- the nexus of oppression -- do more to stimulate minority and female entrepreneurship than all the set-asides combined. New business founders are preponderantly impatient refugees from the establishment.

Hopefully not too impatient. My certification trials were not yet over: I had yet to be named to the customer's "Approved M/WBE Vendor List," for which the state certification is only a prerequisite. To this end, the bank summoned me to an interview at its headquarters across town. I asked my assistant to call me a cab. "I'm taking a limo to Park Avenue," I told her, "to get us approved as oppressed persons." She rolled her eyes.

In the bank's burnished conference room I faced a photogenic board of equality facilitators that looked like a magazine ad for Your Friendly Utility Company: three men and three women, one from each of the currently approved minority groups. Big corporations maintain entire departments to monitor employee racial balance and vendor affirmative action compliance, so I wasn't surprised that the bank's don't-call-it-quotas crew reflected those ideals. But they already had all my information: the same financial statements, the same business and personal and bank and insurance references I'd submitted to the state.

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Where Are The Teacher Unions When We Need Them? - EndH1B.com Blog - End H1-B links to this page. Here’s an excerpt:

…guilty to charges of Medi-Cal fraud. A third laboratory owner, Zubair Younis, 42, of Brooklyn, N.Y., is being sought on a felony warrant." UPI is almost certainly a Minority and “ Woman-Owned” Business Enterprise (I say "almost certainly" because I haven't been able to confirm that UPI is registered in a state as such—and that may be because it is being delisted).…

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…after pleading guilty to charges of Medi-Cal fraud. A third laboratory owner, Zubair Younis, 42, of Brooklyn, N.Y., is being sought on a felony warrant.” UPI is almost certainly a Minority and “ Woman-Owned” Business Enterprise (I say “almost certainly” because I haven’t been able to confirm that UPI is registered in a state as such—and that may be because it is being delisted).…

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David Simmons|5.11.11 @ 4:01AM|

All over the world there are concessions for certain groups of people, grants available, help to be found. It's good to see something being done to create opportunities for people who may otherwise hit that glass ceiling. It's a shame they make it so difficult to join though - 8 months, that's a long time to get a certifictae!

Mandy Allen|5.11.11 @ 4:02AM|

It's great to see something being done for women that will benefit them in the long run. Too many times it's a case of 'jobs for the boys'. Grab the advantage while you can.

Jeremiah|9.7.11 @ 10:04PM|

"But WOB isn't just about tangible benefits. It's so much more. I now feel a part of something larger than myself: the great chain of being that tumbles from the well-meaning, through the impractical, to the absurd -- replacing the dismal script of capitalism with a delightfully random set of entitlements and rewards."

I admire how you embrace sexism with such open arms. Women seem to be pretty good at that, as long as it's in their favor. Men, on the other hand, actually naively fought FOR women's rights.

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