May 25, 1972
Page 18950
MINORITY BUSINESSES
Mr. MUSKIE. Mr. President, although the Federal Government, some State governments, and private corporations have become involved in aiding black-operated business, a meaningful program for today's economy has not been developed enabling minorities to compete effectively on a higher economic level. Blacks today make up 12 percent of the population but they control less than 1 percent of the country's economic assets.
The Honorable C. Delores Tucker, secretary of the Commonwealth of Pennsylvania, recently addressed the Chicago Economic Development Corporation Conference on "Space Age Industries' Challenge to Minority Businesses." Mrs. Tucker, a thoughtful spokeswoman of minority economic advancement, describes the problem and describes a necessary ingredient in any meaningful solution: The education and training of black entrepreneurs, technicians, and tradesmen. Her comments are based on sound logic and useful insights, and it would be worthwhile for all of us to read and discuss her views. I ask unanimous consent that her speech be printed in the RECORD.
There being no objection, the address was ordered to be printed in the RECORD, as follows:
ADDRESS BY C. DELORES TUCKER
It's a great honor to address such a distinguished group at this second annual symposium on "the State of the Black Economy."
We hear a lot about that black economic state of ours, that "State of Black Capitalism", but I'm afraid it's still just a state of mind – an imaginary provincial realm, a satellite colony of white corporate America, a gerrymandered whistlestop on the wrong side of the tracks.
Now if we could believe the Nixon administration, we might suppose that a bold new economic torrent of black capital is flooding into the national fiscal mainstream and making great waves in the corporate watersheds of the land, enormous black tributaries pouring into the big-money reservoirs and returning great currents of profit back to the black community.
Well, I've seen a ripple or two, but a couple of ripples don't make a wave. The river of American enterprise flows along untouched. Black capitalism is a myth, and will be for a long, long time. There is only one kind of capitalism in this country and that is American capitalism. If it has any color it's green.
Blacks may make up 12 % of the population but they still control less than 1 % of the country's economic assets. Only one black controlled corporation (Johnson products, a cosmetic firm) is listed on a major stock exchange, and its annual sales are only $10 million (or a fraction of the sales of the top 500 corporations). Black insurance companies, pointed out as shining examples of black economic power, have one two-tenths of 1 percent of the insurance industry's total assets.
The great majority of black businesses make less than $25,000 annually. Less than a third of all minority enterprises are profitable enough to hire workers – two-thirds are sole proprietorships or partnerships. Black-owned firms employ about 40,000 of our 25 million black brothers and sisters, the white/black dollar ratio is an incredible 333 to 1.
In terms of receipts, the most important black-owned firms are filling stations, automobile dealers and mom-and-pop food stores – hardly competition for the multinational white corporate structure!
Yet in terms of income, black America is the 10th largest economy in the world. Over $39 billion a year goes into black pocketbooks. And that $39 billion represents real economic clout.
It could make the difference between profit and loss for most consumer products, and white industry knows it – look at the growing number of black faces turning up in TV ads for the top brand-name products.
The problem is that over $38 and a ½ billion of that $39 billion goes right back out again into the white economy.
They say that money turns over six times in the Jewish community, 5 times in the general white community but only once in the black community. The black consumer market is there and the black gross national product is growing, but less than one percent stays to benefit the community.
And this is one of the roadblocks to successful black enterprise; the lack of support from his own brothers and sisters, who patronize white stores. First and foremost, we need more black unity.
Black business should be the business of everyone in the area, from the minister on down, because it means more jobs, more earnings, more spending, more contributions to churches and neighborhood projects.
The Jewish community is a beautiful example of how valuable group commitment and concern can be.
Too many blacks still seek out the white lawyer or doctor, assuming white means better. White does not mean better.
A white is no better than a black who is trained.
We must insist upon the training to compete with whites on equal terms. A black who provides a first class service or a top-notch product will find that most buyers and investors are not concerned with color.
The white businessman gets all the expert consultation he can. But a false pride often prevents the black businessmen from seeking or accepting outside advice or assistance, despite his need for management skills and knowledge of business techniques. He may lack resources to realistically appraise his situation, or fail to assess his product, market, location or consumer needs. There is prevailing unfamiliarity among black businessmen with the total marketing concept – advertising, sales promotion, merchandising and marketing research.
Let us emulate the strengths of the white corporate structure – not the old private enterprise dog-eat-dog image but cooperation. Actually, successful white business has grown, not by destroying the competition but by merging with it into interlocking directorates and mutually supporting agreements to maximize capital flow, growth and expansion for all.
Black business fails for the lack of enough risk capital and credit to survive the first lean years.... The money is too little, comes too late, and is too expensive to borrow even when available at top interest for short-term loans.
Since limited capital is a major problem for blacks, we have even more need to pool our resources; blacks should set up a joint professional practice in law or medicine:
Establish clinics or cooperatives to share the costs and equipment for maximum dollar effectiveness. Two or three doctors or dentists can give better service cheaper than an individual operation – so can two or three servicemen in one body repair shop or electronics shop.
We must develop our own black financial institutions – savings and loan banks. Or as an alternative, get blacks who are tuned in to black needs and problems into the higher levels of white-run banks, so that the black needs and problems are understood and served.
We must get into the white corporate structure to understand the uses of real economic power decisions so as to share in this power and help make those decisions.
Under the best of conditions, small businesses have a high failure rate: the bankers' rule of thumb is that 50% go under in the first year, and 70% after two years. Blacks have never operated under the best of conditions.
A recession for the country is a depression for the ghetto. The recent economic "downturn" with its resulting unemployment and welfare cuts, sharply reduced the purchasing market available to inner city businesses. To make things worse, tight money conditions cut off funds further just as the new black capitalists needed them most. Fire and theft insurance premiums are exorbitant in cities. Nixon's campaign talk about black capitalism brought high hopes but little else.
In fact, it encouraged some blacks without adequate capital or background preparation to attempt a business career. Every marginal business failure only reinforces the traditional fears of black inadequacy among both blacks and whites.
Dr. Andrew Brimmer has made a very convincing and logical case against the idea of black capitalism surviving in the all-black ghetto areas. Many black businessmen have experienced the truism of Dr. Brimmer's keen insight and had to close their business because they closed their eyes to the economic reality of doing business"as usual."
Yet an extremely large portion of small businessmen continue to try retail business, despite a sharp decline in the number of retail establishments across the nation, the growth of shopping centers, discount department stores and supermarkets made possible by the automobile and consumer mobility, will probably continue at the expense of the small neighborhood retailer. Only the most efficient, best trained and best financed can survive.
The mom-and-pop store in today's world is comparable to the horse and buggy in an era of moon travel. In one way or another, the Federal Government subsidizes all areas of big business – oil, airlines, defense industries, railroads, millionaire farmers, and so on. It has an equal responsibility to subsidize black enterprise. But black enterprise has a responsibility too – to become politically informed so that you can push for legislation favorable to black business interests.
The white businessman has always had political savvy, and used it. Black businessmen can't afford to leave that crucial area to their politicians.
As the first black woman to hold a cabinet post in Pennsylvania, I know how integral a role politics plays in every area. As chairman of our State employe's retirement fund, which invests a billion dollars a year in businesses, I can make sure that the philosophy of those businesses includes blacks. There are thousands of pension funds, retirement funds and other funds across the country. It is to your interest to learn where those billions of dollars are being invested. If it is in racist corporations, work to see that such investments stop. If they are not going into sound black businesses, why not?
There are many other areas where effort should be made. The majority of black people have not had an opportunity to learn enough, or to use what they do learn. Black business should wholeheartedly back all good educational programs.
Training is becoming more available, but we must keep pushing. The unions can and must be made to move more rapidly. The new Vo-Tech schools offer tremendous opportunities for youngsters to learn new skills and get into well-paying occupations that have been traditionally closed to blacks. The days of the unskilled laborer are gone, but the craft skills are in greater demand than ever, and pay more than many white collar jobs.
A good plumber or carpenter or electrician can almost name his own hours and price. Everyone – black and white – seem to be desperate for a reliable auto repairman, TV repairman or painter. How many such craftsmen do we have? It is imperative that we support Vo-Tech schools, the OIC, and all available training programs.
Blacks may lack capital but they have more than their share of artistic talent and imagination. We must encourage the talented young dress designers in this community. Photography is another field where talent means as much or more than capital.
We have very many great chefs and cooks but few top-rate black restaurants. There is no question that whites as well as blacks would support a really excellent, well-run restaurant.
Blacks are famous for their contributions to the entertainment field. Why don't we have more really good black entertainment clubs? More good black motels? More data processing services for small businessmen? Accountant services, auditing, and report-compiling services and advice are very much needed in the black community.
Black businessmen should look closely at consumer services. As consumer incomes increase, more and more of their income goes into services.
Blacks who offer consumer services are not at such a disadvantage as in retailing or manufacturing because their wit and ingenuity will make up for capital.
Black business should unite, not only for its own growth, but against any black exploitation of the black community. We have been oppressed by so many for so long that we cannot tolerate any oppressors among ourselves. The desire to maximize profits at community expense – the white robber baron's "the people be damned" point of view – has no place in our vision of a better black future. Improving the overall economic lot of millions of average black citizens is far more important that the achievement of high corporate standing far a few. No segment of our population can prosper while another lives in hopeless stagnation.
As Parren J. Mitchell said, "let us in black enterprise not wait until a black Ralph Nader starts to run us through the mill before assuming our social responsibilities. Let us recognize the legitimacy and indeed the morality of the union organizing of workers. Let us recognize that if we practice hypocricy, deceit and exploitation against our black brothers we shall be hated as much, if not more, than others who exploited and deceived the less fortunate, the unlettered, the unsophisticated."
Black businessmen must assume the leadership in our perplexed and distressed urban enclaves if they are to survive, and survive they must for quite a while because 80% of black people live in these areas.
Let us follow the example of our white business brethren who have traditionally exercised their influence and played a dominant leadership role in shaping the destiny of their community.
Obviously, this is not to say that they shaped it wisely; many of our basic problems were created by their long years of racist misjudgment and "malignant neglect".
Too long have we played a silent role in shaping the destiny of our communities. Too long have we let pseudo-leaders ... sociologists, false political prophets, certain segments of our ministerial representation, and perennial do-gooders ... wave voluminous proposals, studies and position papers before us, claiming to have the solutions, or make glowing headline speeches about their theoretical concepts without understanding that black people don't suffer from theories – they suffer from a condition.
As Frederick Douglass said, we can only make change possible by becoming a part of the change-making process, through eliminating those racist institutions – political, social and educational – that hold back progress.
Black businessmen particularly have a direct interest in such change in the survival of the cities, for the same conditions which threaten the life of the city threaten the survival of every black business.
Radical changes in our operations and thinking will be required. We must begin to think in terms of mergers and conglomerates, black with black – black with white – in order to centralize the specialized expertise and resources to develop more efficient and competitive economic units of operation. In a period when men are chartering plans to colonize the moon, we cannot afford to practice business by the 1880 concepts of individual proprietorship.
For just as "no man is an island" so no community is an island; entirely unto itself. Every community is a piece of the continent, a part of the whole. Should a clog be washed away by decay, the earth is the less for it. The death of one community diminishes all, for the community is involved in the total society. Therefore, never ask for whom the bell tolls. It tolls for thee.
I am confident that you will seize the awesome challenges and opportunities before you, as you have so gallantly in times past. And I am confident that, working together, you will succeed.