The question for New Jersey’s two U.S. senators — Robert Menendez and Cory Booker — was simple. And straight to the point:
New Jersey has one of the most diverse populations in the country, yet studies show business owners from underserved communities (most notably African American and Latino) are underrepresented in the business community — most specially in gaining access to government contracts and obtaining working capital. How do you help change that?
Booker said the problem is complicated, but the solution is simple: money, or access to it.
“If we are serious about an economy that works for all, we have to expand opportunities for black and brown business owners to access government contracts and working capital,” he told ROI-NJ. “My office is partnering with the newly formed New Jersey Office of Diversity & Inclusion to amplify their initiatives to increase the number of minority-, veteran- and women-owned businesses that contract with state and local governments throughout New Jersey.
“On the Senate Small Business Committee, I’ve been fighting for programs that increase access to capital and inform small business owners, especially those in communities too often left behind, about the availability of government contracts and other government funding.”
Another part of Booker’s push for investment capital comes through his signature program, Opportunity Zones, where investors can see significant tax savings if they invest in economically struggling areas. Booker feels the legislation is working.
“The Opportunity Zones program was always geared toward planting the seeds of investment today in order to realize long-term economic growth tomorrow,” he said. “That’s why I was proud to lead the bipartisan effort to get this legislation signed into law, particularly in a divided Congress.
“New Jersey has taken advantage of the program by aligning state incentives and other tools to maximize impact in high-poverty communities. There are great projects taking shape in our state already — creating jobs, boosting affordable housing and driving entrepreneurship. At the same time, we must do more to ensure Opportunity Zones realizes its full potential. I am working with my colleagues in the Senate to add important safeguards and transparency measures to ensure the incentive is benefiting long-term residents and driving investment into projects in highest-need communities.”
Menendez agreed more efforts need to be made to ensure underserved communities have equal opportunity when it comes to become entrepreneurs and small-business owners.
“There’s little doubt more needs to be done to ensure that business owners reflect the diversity of our state and that they have equal access to the resources and capital they need to grow,” he told ROI-NJ. “It is why I’ve made fighting for diversity everywhere from the workplace to the boardroom a priority issue in Washington.
“In 2016, I led efforts to diversify federal advertising contracts when I requested the Government Accountability Office update its 2007 report on federal advertising contracts and subcontracts with minority-owned publications, public relations firms, advertising agencies and media companies. I’ve also fought to make sure that the federal government is ensuring that minority-owned media outlets have fair opportunities to compete for and be awarded federal advertising contracts.”
Recognition is key, he said. In fact, Menendez took exception to the idea that the Hispanic business community needs to do more to reach the mainstream business audience.
“The Hispanic business community is a dynamic, diverse and entrepreneurial powerhouse for our economy,” he said. “There are nearly 60 million people living in the United States who consider themselves Hispanic and, by 2044, more than half the population of the United States will be non-white. The community’s purchasing power is growing exponentially and businesses of all types should take heed.
“Over the past 10 years, the number of Latino business owners grew 34%, compared to only 1% for all business owners in the United States, and the majority of those businesses are in industries that build this country, like manufacturing and construction.
“So, while you ask me how we can do business with a mainstream audience — these numbers demonstrate that we are the mainstream audience.”
Menendez concedes, however, there is still work to be done in regard to inclusion. He feels diversity and inclusion at the highest level is important — and yields results.
“When it comes to having influence and a say in the boardroom, there’s no doubt that there is significant progress to be made,” he said. “That’s why I’ve been focused on increasing transparency and accountability in the corporate suite both through legislation and surveys of Fortune 100 companies. Companies that incorporate minority professionals into every level of their corporate hierarchies will be best positioned to reach an increasingly diverse pool of consumers.
“The fact is, a more diverse board room is more likely to recognize the needs of underserved communities and not only lead to a more diverse workforce, but new ways of reaching new consumers. Last year, I introduced the Improving Governance Through Diversity Act, which would require public companies to annually disclose the gender, race and ethnicity of their boards of directors.”
Both senators agree access to capital is key.
“Throughout my time in the Senate, I have fought to boost access to capital, reduce administrative burdens and accelerate new small business growth,” Booker said. “As a member of the Small Business Committee, one of the first bills I ever introduced was bipartisan legislation to increase the availability of high-quality apprenticeships, because I heard from business owners in New Jersey that they simply couldn’t find enough skilled workers.
“Recognizing that capital and resources for new startups are increasingly concentrated in just a few cities, I introduced the Startup Opportunity Accelerator Act, which makes available essential funding and mentorship opportunities for underserved entrepreneurs. Above all, I’m focused on getting things done; just last year, the Senate passed my bipartisan bill to ensure that disaster victims in New Jersey and across the country continue to have access to Small Business Administration loans soon after a disaster strikes. Along with Opportunity Zones, these initiatives can help drive new investment and small business starts in every corner of New Jersey.”
Menendez said members of underserved communities face different challenges.
“We have to confront the unique challenges facing minority-owned businesses,” he said. “Many Latino-owned business owners rely on personal finances or personal loans from friends and families to start up their ventures. They are disproportionately likely to rely on credit cards and personal bank loans rather than business loans, and use personal guarantees such as cash, real estate and other assets to secure these loans. All of which come at greater risk than traditional avenues to secure capital for new businesses.
“In either case, far too many Latino business owners are at a disadvantage due to difficulty accessing capital through traditional avenues and/or how to use our tax system to their advantage. The issue for these business owners has little to do with reaching a mainstream audience, but much more to do with overcoming these barriers to unleashing their true economic potential.”