Why Diverse Construction Businesses are Important to the U.S. Economy
It’s not enough to have economic growth. You have to distribute wealth throughout all of society.
Tabare Vazquez
Demographic trends are changing the construction industry. The U.S. Census Bureau (2015) projects that by 2044 racial minorities will be the majority population in the United States. By 2020, it is projected that 50 percent of businesses entering the construction industry will be minority-owned or female-owned. Hispanic contractors, now representing 17 percent of construction companies, are a major driver of this trend. These facts, and more below, are why we should be paying attention and supporting diverse construction businesses.
Community Stimulus
Community impact is often cited as one of the reasons minority-owned businesses are a key factor in economic growth. As more minority businesses are formed, they are more likely to create jobs and employ workers in minority communities. These neighborhoods also present significant opportunities for development and, with the right partnerships, construction companies can make positive change through facility rehabs and construction of mixed-use developments. A great example is Magic Johnson’s Magic Johnson Enterprises (MJE) that focuses on under-served markets by building entertainment complexes, restaurants, and retail centers within the community.
Social Influence
Minority-owned construction businesses contribute to stimulating economic growth by providing employment opportunities to people who may not be employable by large corporations. Community advocacy organizations in several communities in Illinois have initiated programs to expose underemployed individuals and individuals with non-violent criminal histories to construction pre-apprenticeship programs that prepare them for apprenticeship opportunities. Considering the 800,000 incarcerated individuals in Illinois whose records will be expunged for soon to be legal marijuana, many may be candidates for these types of programs. The $45 billion Rebuild Illinois capital plan contains $25 million for the Illinois Works pre-apprenticeship programs. The expenditure of these funds potentially could have a very good return-on-investment.
Economic Impact
Minority and women-owned businesses create jobs in traditionally marginalized communities, building wealth for their families and, ultimately, boosting the economy through their purchases of goods and services. Economic growth translates to expanding markets and economic buying power in more than under-served markets. Minority-owned and women-owned construction firms alone or with key partners must position themselves to help the U.S. economy grow well into the future.
Is your business prepared for its impending role in boosting the U.S. economy? Coleman and Associates, Inc. would love to help you grow your business for the future. Join us for our free webinar on Oct. 17 to learn more about how your company can take advantage of the $45 billion Rebuild Illinois capital plan and more ways to help you grow your capacity.