The reasons, some say, are as old as racial injustice in America itself.
Kyron Robinson, operator of ProRank Business Solutions, a Harrisburg firm that seeks to help minority-owned businesses navigate the state contracting process, says the disparity has roots in Jim Crow laws that came as a backlash to Reconstruction Era policies, and institutionalized discrimination in hiring, training and access to capital that tended to lock African-Americans out of the field for generations.
Firms that filled the vacuum in the intervening years started with mostly-white workforces, and over the years have relied heavily on kinship and legacies to fill out their crews. Labor scholars have noted that historically, even construction unions workers perpetuated “whites-only” hiring and training practices.
That was then.
But even now, because construction contracting is a business that requires a lot of investment in labor, equipment and supplies — or the financing to get them — you don’t find a lot of Black-owned businesses in this field. Especially businesses scaled up to the size where they can compete for large, new-build projects, as opposed to home repair or renovation.
It has also, at times, been a field where overt prejudice could flourish.
Workers who have crashed through the barriers here say they have felt it.
“When I started with the Sheet Metal Workers (Union), there was almost one hundred people in the local, and when I went in I was only one of three minorities. And the number of minorities has always been down in the single digits with that union,” said James Brown, a 40-year veteran of the construction business in the midstate, who runs his own Brown’s Building Services.
“I heard the ‘N’ word a few times on the job and just had to shut up and bear it,” Brown, now 65, said. “I knew that I was, you know, one of a kind. I have worked on so many big projects and there was only a couple that I would see another minority on, and I’m talking about in all the trades. There was only one, or two, projects where I saw another minority on my trade. That was really a rarity.”
Policy initiatives launched in the wake of America’s Civil Rights era helped to give Black businesses and workers more opportunity: In 1983, Congress passed the first laws creating set-asides for small, minority-owned businesses in federally-funded construction projects; court and regulatory rulings required building trades unions to end discriminatory practices and create training opportunities for Blacks and other minorities.
But progress has been uneven. The U.S. Bureau of Labor Statistics says that while Black people comprise 12% of the workforce, they make up just 6% of the workforce in construction — numbers that have been relatively unchanged for 25 years.
Pennsylvania has not been in the vanguard.
According to U.S. Census Bureau Quarterly Workforce Indicators, the African-American share of the construction workforce statewide — from building homes to hospitals to highways — stood at 4.4 percent last summer. African-Americans make up 10 percent of the state’s overall workforce. People who identify as Hispanic account for another 4.5 percent statewide.
By industry sectors, only farming and mining had a lower Black participation rate.
Central Pennsylvania doesn’t raise the average: Black employment represented 3.0 percent of the construction workforce in the Harrisburg / Carlisle metro region (Dauphin, Cumberland and Perry counties); 2.6 percent in York / Hanover; and 2.4 percent in Lancaster.
It’s even more startling when you consider the number of Black-owned contracting businesses.
A 2018 disparity in contracting study for the state Department of General Services noted that while there are a significant number of small, minority-owned firms, Black-owned firms would probably be “available for” — in other words, capable to bid on — just 0.4 percent of the state’s construction contracts, as measured by dollar value.
This is because bonding, insurance and other requirements often knock them out.
This is not so much about blaming the people in the industry today, Robinson said, as it is the systems the people in power, over time, have built.
“Historically, white people have a tendency to think that: ‘If I’m doing something racist, I have to be a bad person. That makes me bad.’ The reality of it is that, everyone raised in American culture is prejudiced to varying degrees. It’s something called implicit bias that we all have.
“And the short answer is it doesn’t matter why you’re making the decision. It doesn’t matter if you’re doing it consciously or you’re doing it implicitly. The impact is the same.”
The key question for everyone to consider now, Robinson said, is are you committed to changing racist behavior.
”What we have to honestly learn how to do is deconstruct the implicit bias; the bias that’s running in our sub-conscious,” he said. “We have to work hard to identify and single out those behaviors. It’s going to take education, resources and possibly a considerable amount of time to begin to undo this.”
An uneven playing field.
Black contractors say they’re up against an ingrained white establishment that has history, relationships and resources on its side.
Harrisburg attorney Mary Powell, interviewed last week by PennLive, noted that for most Americans, a home is the primary asset collateralized to start a new business.
The median home value for a Black homeowner in Pennsylvania from 2012 through 2016 was $100,000, compared to $168,000 for white homeowners, according to the 2018 study for the state Department of General Services by BBC Research & Consulting.
This means the minority contractor has a harder time not only getting the capital to invest in workers, equipment and supplies, but also the kind of bonding that is required by many construction contracts.
A 2019 small business credit survey from the Federal Reserve Bank of Atlanta found that in 2018, only 31% of Black-owned businesses received all the funding they applied for, compared with 49% of white-owned businesses, 39% of Asian-owned firms and 35% of Latino-owned businesses.
Blacks led the league in total denials, the same report found, with 38% of Black-owned small businesses reporting they did not receive any of the financing they applied for, compared with 33% of Latino-owned businesses, 24% of Asian-owned businesses and 20% of white-owned businesses.
Once in business, there’s this reality:
The established firms, understandably, have a bias to work with the firms that they already know. It may not be intentionally meant to exclude other races, but it effectively does just that, by reinforcing the bonds of “the club” that minority contractors simply haven’t been able to join.
That also flows down to rank-and-file jobs, Powell said.
“Many contractors give all of their hiring opportunities to established relationships – family members, high school friends and church members… This is also a form of de facto racism since that minority worker did not go to your high school, and, likely, will never be a family member or church member.”
Similar barriers can exist in other economic sectors, Powell said, but they can be magnified in construction because it is both capital and deal intensive.
Signs of hope.
Whether it’s a recognition of systemic racism or just a pressing need to grow the workforce, there are steps being taken to try to correct this situation.
Most of them start with training opportunities.
Representatives of both the midstate’s union halls and non-union contractors have pointed to new efforts to try to get more minorities into the four-year apprenticeship pipeline that creates earn-while-you-learn opportunities for new workers, and leads to “journeyperson’s papers,” the tradesman’s equivalent to a college diploma.
Dave Sload, president and CEO of the Associated Builders and Contractors Keystone chapter which covers all of South Central Pennsylvania, said the programs ABC runs in eight different fields ran at 15.7 percent minority participation in the 2019-20 school year. That share has increased in each of the last three years.
It also recently launched pre-apprenticeship programs in the Reading and Lancaster areas, where students can knock off up to one-year of their classroom training while still in high school.
In Berks County, there is also a new re-entry program for interested people coming out of prison.
Robinson, with ProRank, noted Thursday that latter kind of effort is especially important. Construction can be a salvation for ex-cons because it is a field that is largely devoid of statutory bans on ex-felons coming to work.
“This is probably one of the only industries where you can come in with a felony or a record and make forty or fifty dollars an hour,” he said. “There’s a huge population that’s coming in and out of jail. Black and white and Spanish and every color.”
More of these programs are being contemplated for the Harrisburg area, Sload said.
Even further back the pipeline, minority participation appears to be strong at local career and technical schools. Dauphin County Vocational Technical School’s Construction Academy’s enrollment had a total enrollment of 197 in 2019-20, assistant administrative director Frank Flamini told PennLive last week. Forty-one of those students were Black, another 49 were Hispanic.
“Dauphin County is a diverse community, and I think our school reflects that,” Flamini said.
What could still be better?
Several contractors reached for this story said they believe it’s time for the region’s banks to be a little more pro-active when it comes to extending credit to start-up businesses, especially those from predominantly Black neighborhoods.
“There’s definitely talent in the community,” said Tarik Casteel, owner of TLC Construction & Renovations in Harrisburg, “but a lot of time it’s overlooked.”
Two of the area’s more successful Black contractors, Casteel and Jameson Christopher, of Trihanson Development, are case studies in having to make end-runs around the banks to get themselves established.
Trihanson started by establishing direct lines of credit with paint suppliers and other firms, which — as Christopher was getting his commercial painting business established — allowed him to get the materials he needed to do the jobs before the first payments came in.
Casteel said he used equity earned from rehabbing and reselling homes in Harrisburg to build his initial source of capital. He has since been able to use his track record to enter into development partnerships with larger companies for a series of high-profile commercial and residential projects in the city.
Both believe it is still demonstrably harder for many, smaller Black-owned businesses or start-ups based in low-income neighborhoods to get loans or lines of credit from banks. While that didn’t stop them, they believe it discourages many who want to blaze their own trail but have minimal resources.
The bottom line, those interviewed for this story said, is that the nurturing of more Black-owned businesses will do more than anything to bring more Blacks into the job sites.
“if Black-owned contractors had been thriving in construction for the last 100 years, you don’t think there would be a bigger Black workforce?” Robinson asked. “If you had a hundred more Black-owned construction companies, you would have thousands more Black-owned contractors in the labor pool.
“That gap in Black-owned businesses, creates the gap in the contractor workforce.”