The State of Minority- and Women- Owned ... - Cleveland.com

Anecdotal Evidence of Disparities in the City of Cleveland’s Market Area
3. Experiences of Disparate Treatment in Business Dealings
The survey included questions about instances of disparate treatment based on race and/or sex
experienced in various business dealings during the past five years. As shown in the last row of
Table 8.3, 39 percent of M/WBE firms said they had experienced at least one instance of
disparate treatment in one or more areas of business dealings identified on the survey. Reports of
disparate treatment were substantially and statistically significantly higher for minorities and
nonminority women than for nonminority males, casting doubt on claims of widespread “reverse
discrimination.” Reports were highest among African Americans, with an overall rate over 67
percent, and Hispanics, with an overall rate of almost 44 percent. Similar patterns were observed
when the results were disaggregated by procurement category.
The balance of Table 8.3 shows results for each of 14 distinct types of disparate treatment
inquired about in the survey. In all categories, the difference in reported amounts of disparate
treatment between M/WBEs and non-M/WBEs is substantial. In having to perform inappropriate
or extra work not required of non-M/WBEs, M/WBE firms reported disparate treatment more
than seven times as frequently as non-M/WBEs. In hiring workers from union hiring halls, the
ratio was almost five times higher. In applying for commercial loans, 309 applying for surety
bonds, applying for commercial or professional insurance, obtaining price quotes from suppliers,
and having to meet quality, inspection, or performance standards not required of comparable
non-M/WBEs, the ratio was more than three times higher. Even where differences are smallest,
M/WBEs report being discriminated against roughly 1.2 to 2.4 times more frequently as non-
M/WBEs.
Evidence of the impact of public sector M/WBE programs is seen in that the smallest differences
between M/WBEs and non-M/WBEs appear in the categories of working or attempting to work
on public sector prime contracts (1.25 times higher) and subcontracts (1.2 times higher).
Comparable ratios on private sector prime contracts and private sector subcontracts were 2.2
times and 1.9 times higher, respectively.
309 Discrimination in access to commercial credit and capital is the most widely and commonly cited problem facing
minority-owned firms. See Chapter VI for an extensive discussion of the theory and analysis of the evidence
behind this phenomenon.
NERA Economic Consulting 270