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The Dayton administration is increasing minority contracting and hiring in the wake of a scathing 2016 audit found state government falling short.
For example, spending with African American contractors has risen from $135,000 in 2015 to $1.5 million in 2017. That’s a fraction of the $2.5 billion Minnesota government spends annually with goods-and-service providers.
Overall, state spending with “targeted businesses” represents 5.4 percent all state contracts.
Contracting with Asian American-owned businesses increased 47 percent to $16.3 million over two years, 143 percent to $2.8 million with Hispanic-owned businesses; and 85 percent to $47 million with women-owned businesses. Spending on vets-owned firms rose 275 percent to $6.8 million.
“We are working hard to ensure that state government better reflects the rich diversity of Minnesota, and is accessible to all Minnesotans,” Dayton said in a recent statement.
Commissioner Matt Massman, appointed to head the Department of Administration in 2015, started systematically tracking diversity in state contracting. Massman also simplified the process for minority businesses to get certified as targeted vendors.
A 2016, first-ever outside audit of Minnesota government found that state agencies do not fully comply with equal-opportunity laws, resulting in missed job and contract opportunities for people of color, women and people with disabilities. The audit, ordered by Dayton, concluded that state agencies didn’t follow affirmative action laws to recruit and hire a diverse pool of employees and contractors. For example, minority contractors got only 1 percent of the $2.4 billion in federal transportation dollars administered by the Minnesota Department of Transportation from 2012 to 2014.The 114-page audit also found that the state has dramatically slashed the budget and staff at the Human Rights Department, which has the job of investigating discrimination allegations and reviewing departmental affirmative action plans.
Although the Dayton administration increased its spending with certified businesses owned by people of color from $12.3 million in 2015 to $13.3 million in 2016, that was still less than a fraction of 1 percent of the more than $2.7 billion the department spends each year.
“There is a lot of work that needs to be done,” Minneapolis attorney Michael Fondungallah said last year. “People were…not following the law and not making the effort to recruit protected-class people.”
The report, more or less, supported social justice advocates contention that a lack of opportunity and deep-seated institutional biases play a big role in the state’s previous record of income and educational disparities.
“It’s hard for minorities to get into certain areas, Dwayne Etheridge, president of the regional Association of Minority Contractors, said last year. “If you don’t know someone or have a relationship with someone, it’s not passed down to you.”
In 2016, Dayton announced a goal to increase diversity in state employment to 20 percent. When Dayton took office in 2011, 8 percent of state employees were minorities. That has risen to 12 percent. In 2015, 16 percent of new hires were minorities. In 2017, that increased to 19 percent.
In the Twin Cities, minority employment in many job sectors, including construction, health care and finance, is growing at double the rate of the overall Twin Cities labor force. That reflects the rapid growth of the minority population. Labor experts say the Twin Cities faces a labor shortage thanks to retiring baby boomers and economic growth, without more trained minority-and-immigrant workers.